Speech at International Air Transport Association’s (IATA) Global Aviation Human Capital Summit

Mr Hawazi Daipi, Senior Parliamentary Secretary for Manpower and Education, Four Seasons Ballroom

Dr Guido Gianasso, Vice President, Human Capital, IATA

Distinguished Guests

Ladies and Gentlemen

Good morning

Introduction

1. To the delegates that have travelled from afar, a warm welcome to Singapore. It is my pleasure to join all of you today at IATA’s inaugural Global Aviation Human Capital Summit.
2. This Summit is an opportune platform for bringing together industry professionals and practitioners to deliberate on the challenges of human capital in aviation - an industry that carries with it great promise; an industry which helps to fulfil our dreams of exploration and discovery; an industry that epitomizes globalization by continually enabling the transportation of people and goods to all corners of the world.
3. Early this year, we celebrated 100 years of Aviation in Singapore, a national milestone and celebration for all in the aviation industry. It is thus timely that IATA is holding their inaugural global aviation human capital summit here, strengthening Singapore as a centre of dialogue for human capital development and training.
4. Looking back to 16 March 1911 when a British Bristol Boxkite biplane first took off from the old racecourse (or Farrer Park as some of us may be more familiar with), the aviation scene in Singapore has indeed come a long way. Singapore has witnessed a huge change in our aviation industry and just last year alone, Changi Airport handled more than 42 million passengers. Our very own internationally renowned airline, Singapore Airlines, also services 99 destinations in 39 countries today.¹
   
   Growth of aviation and the opportunities within
5. Globally, it has been estimated that by 2050, the aviation industry will fly 16 billion passengers and 400 million tonnes of cargo². The aviation industry’s centre of gravity is also slowly shifting eastwards; with the demand for air travel within Asia increasing together with the rise of the Asian middle class.
6. Closer to home, aviation is and will continue to be a key cornerstone of Singapore’s economy, currently contributing over 3 per cent to our GDP and providing 45,000 jobs³.
   
   Future Challenges of the Aviation Industry
7. As much as the times ahead are exciting, there are also many key challenges that await the aviation industry. First, there are deep underlying challenges facing airline profitability. With a historical average net margin of just 0.1% over the last 40 years, the best year of the last decade – 2010 - saw a profit of just 3.2% that does not cover the 7-8% cost of capital⁴.
8. Second, the industry is growing increasingly saturated. Even as the number of travellers increased tenfold in the last four decades, the real cost of travel has fallen about 60% due to the variety of choices that consumers now face with numerous airline services being offered.
9. Third, airlines have to service a more heterogeneous customer base, geographically, culturally, and demographically, with findings showing that the airline customer is on average older than before. The younger travellers are also becoming more savvy and hence, more demanding in their expectations of flight travel, not just wanting a mere flight but also an enjoyable flight experience. This highlights the need for a change in capabilities and mindsets for those in the aviation industry to better equip themselves to meet the changing needs of the industry.
   
   Singapore’s initiatives to address human capital challenges
10. In order to address all these challenges, it is necessary for aviation companies to develop the best human capital in order to stay ahead. The world expects much more from the talent pool within the global aviation industry and they will have to become more productive, creative, collaborative and culturally sensitive in an increasingly globalised environment.
11. Singapore has embarked on a series of initiatives to address human capital challenges of the aviation industry. A prime example of one such initiative is the IATA’s research collaboration with Nanyang Technological University (NTU) to develop new theories and practices on cultural intelligence and global talent management. This aims to enhance aviation leaders’ cultural intelligence and hence, maximize their performance in the global business environment.
12. Apart from cultural intelligence, I would also like to bring to your attention three other fundamental factors: Talent Attraction, Productivity Improvement and Leadership Development.
13. Singapore has always recognised that we must put in place adequate measures to ensure that we attract the right talent in order to succeed. A recent study commissioned by Singapore’s Ministry of Manpower last year found that factors such as training and development, job opportunities and career advancement are the main drivers for global talent attraction. We should thus enhance these areas to boost talent attraction.
14. The Government also recognises the importance of productivity and has emphasised the need for a culture of lifelong learning in our workforce and enterprises. To this end, we have invested significantly to enhance our Continuing Education and Training system over the next few years to support our drive towards a productivity-driven growth.
15. On leadership development, the Government has focused on the importance of nurturing next generation leaders within organisations through the establishment of the Human Capital Leadership Institute (HCLI). This is a joint enterprise by the Singapore Ministry of Manpower (MOM), Economic Development Board (EDB) and Singapore Management University (SMU). The Institute aims to raise management capabilities through education, pan-Asian research and high-level industry engagement and networking. It is encouraging to note here that IATA is also collaborating with the HCLI for this summit, where it will be sharing best practices on human capital and leadership in emerging markets.
    
    Singapore’s role in aviation human capital development
16. Singapore performs three primary roles in aviation human capital development. First, it helps attract and develop talent. The establishment of the Singapore Aviation Academy as the main training arm of the Civil Aviation Authority of Singapore (or CAAS) bears testament to the importance of human capital development to aviation since the birth of the industry here. Every year, it conducts more than 100 courses for the international aviation community.
17. Second, Singapore ensures that its training faculties constantly keep up with times and stay relevant. The Singapore Aviation Academy works closely with international organisations like International Civil Aviation Organisation (ICAO), IATA and others to ensure the content of their courses remain relevant and are in keeping with international standards.
18. Third, Singapore constantly develops new courses which go far in nurturing the next generation of aviation leaders. A good example of this would be IATA’s collaboration with institutions like Singapore’s Nanyang Technological University (NTU) to develop a joint programme in Advanced Management Programme⁵ in Air Transport and a joint Executive MBA in aviation management⁶.
    
    Conclusion
19. Our gathering here today is therefore symbolic of the increasing role that Singapore sees itself playing in the development of aviation talent regionally and beyond. I believe that through this Summit, we will uncover and celebrate many novel and exemplary human capital practices in aviation which will inspire many organisations.
20. In closing, let me commend IATA for organising this Summit. I wish you a most successful and fruitful sharing over the next few days.
    
    Thank you.