Hobart is looking for widebody aircraft to ply routes between the Apple Isle and (it hopes) Asia, after it spent $130 million upgrading its runway. There could be a problem, however, and it’s a problem that is completely out of the control of Hobart Airport.
The aviation industry is currently going through some significant shortages in two key areas, according to data shared by Simon Elsegood, Head of Research at CAPA – Centre for Aviation.
Elsegood presented the State of the Industry session at the CAPA Airline Leader Summit last week. In amongst what seemed like 1,278 slides (all killer, no filler, genuinely), he shared some slightly concerning data around the industry.
Aviation is currently going through a significant talent shortage. While this is sadly not an unusual situation for the travel industry, the aviation sector is particularly struggling.
An employment gap of around 8-10,000 workers has emerged. That’s not a gap that can be overcome with any sort of speed.
More alarming for the travel industry, the shortage is mainly on the technical side. Alarming because we have had more than one incident in the sector recently – we need more people, talented people, and we need them fast.
“When we break this down, about 80% of the workforce is with airlines and 20% of the workforce is with airports and other specialists, but a gap has emerged, and it’s a gap of about 8-10,000 workers, and it’s pretty much all on the airport and maintenance side,” Elsegood said.
“Technical staff are difficult to come across; there are long lead times for training, they are expensive – it is a familiar reprise.”
Using data from Skills Australia, Elsegood was able to show that at the end of 2021, there was an increase in vacancies, and it peaked around 270%. At the end of 2024 it started to come down, but it is a difficult and persistent problem.
There is another challenge – “we have an aging workforce”, Elsegood shared.
Nothing wrong with being older, the challenge is that those workers have a limited time left before retirement, and who is set to replace them?
“The average age in the transport sector as a whole is 39 years old, [and] the average age in the air transport sector is higher than that, about 42. We are recruiting fewer young people, so that means our workforce is only going to age.”
The other issue was the abundance of opportunity for Australian-trained professions to serve overseas. There are great opportunities for them in Asia and the Middle East in particular, on high pay with big brands, and they are taking them.
Slightly startling was the assertion from Elsegood that there was “no guarantee” that the gap will close and the problem will be solved, so we’re going to “have to learn to do more with less”.
I’m not sure about you, but doing more with less in industries like aviation is not something that fills me with confidence.
Is there a silver lining? Perhaps, in a very weird way.
Queue next slide: “Ongoing aircraft supply issues are a major constraint on growth.” Well, if nothing else, that is at least going to assist with the fact that we can’t find staff fast enough to help keep the current operational environment ticking along smoothly.
We’re in the midst of what Elsegood called a “generational” update in domestic aviation. Virgin Australia is progressively moving from Boeing 737-800s to 737-8 MAX planes, while Qantas Group has just started to take delivery of 40 Airbus A321 XLRs, with 12 of those assigned to budget offshoot Jetstar.
There are actually around 200 new aircraft due for delivery to Australian airlines out to 2030, provided that OEMs are able to keep their delivery timelines.
While that sounds impressive, Elsegood shared that if global aircraft production had stayed level at 2018 levels, we would be looking at an additional 3,000 planes globally.
If production had continued at the previous 10-year growth rate of about 3.5%, then around an additional 5,400 aircraft would have been delivered over that period.
So back to Hobart – in my very humble opinion, one of the nicest small cities in the world, let alone Australia, and the gateway to one of the most beautiful destinations in the world in Tasmania.
If I had to move out of Sydney, Hobart would be my second choice, aside from one issue – air connection. It’s not easy to get on and off the island.
While Hobart Airport is aiming to make that easier, and putting its money where its mouth is, the above data suggests that this could be trickier than anyone would like to believe.
If COVID hadn’t happened and aircraft delivery had remained at that 10-year growth rate, it would be sensible to suggest that there may be more than a few international widebodies providing service to Hobart already.
But it did and there aren’t, and the aviation industry has a few challenges ahead that could make that road quite bumpy.
I used to tell editorial teams that I worked with not to bring up problems unless they had a solution… I feel it would have been rude to stick my neck out and say that to Elsegood at CAPA after such an interesting presentation.
Perhaps Bill Astling, who was at the conference, has a solution. As the CEO of an airline that aims to exist in the near future, he’s going to need a few good ideas. We haven’t heard much, lately, but that’s another story.
And now for the rest of the week with Travel Daily Editor Adam Bishop…
This week we heard some candid views from the founder of new expedition cruise player Terra Nova Expeditions, Greg Carter.
My colleague Myles Stedman had an insightful chat with Carter about how he plans to make waves in the Australian market, and as many entrepreneurs tend to, he shot from the hip about what he feels are negative trends impacting the expedition space.
Carter’s key observation is that Antarctic specialists and wholesalers in Australia have been feeling “frustrated” by what he labelled a negative trend toward larger vessel deployment in the region.
He also pointed out that bigger cruise lines have a very different retail model to the traditional Antarctic operators, which is consequently squeezing specialists with great knowledge out of the segment.
Regardless of whether one agrees with the view or not, Carter is clearly a free thinker with plenty of earned confidence in the cruise sector. While he indicated that Terra Nova is not out “to launch 1,000 ships”, Carter is confident of growing the local appetite for his Antarctic expeditions organically on the back of a niche for budget expedition sailings.
Read the complete interview full steam ahead HERE.
To aviation, as Damian mentioned earlier, we heard again from the mysterious Koala Airlines boss Bill Astling – this time with a launch date. Yes, the operation that is yet to reveal where it will source its planes from – and, as far as we can tell, has not made a formal move to gain an Air Operator Certificate – is eyeing debut flights from late next year.
That is a rather short runway (excuse the pun) to get things moving if many large parts of the business are yet to be put in place. Nonetheless, Astling is adamant the lack of current detail around Koala’s operations is simply attributable to a cunning plan to keep rivals Qantas and Virgin Australia in the dark.
The only problem is, it also keeps everyone else in the travel sector and consumers searching for the light switch as well.
On the bright side though, the idea of Koala is clearly striking a chord with many stakeholders desperate to see Australia introduce a genuine third player in domestic aviation – which as we all know, if successful would likely bring the price of airfares down and improve the quality of services.
Big Red Group CEO John Boris, for instance, believes Koala will breathe “fresh air into a stagnant market”.
“For too long, travellers have paid the price – quite literally – with limited domestic options, and an uncertain market which led to sky-high fares that curbed visitor numbers to regions that rely on tourist dollars,” he argued.
Let’s hope that despite the clandestine nature of Koala, it is – to lean on more iconic Aussie vernacular with this one – fair dinkum.
Across the Tasman, comments made by NZ Prime Minister Christopher Luxon raised a few eyebrows this week when he lamented tourists are enjoying too many of its attractions for free.
The reason for some flummoxed reactions in Australia is because NZ has earned itself – whether it is self aware enough to know this or not – a reputation for being one of the more expensive destinations in the world to visit.
New Zealand has been in the business of hiking visitor fees for consumers and businesses for a few years now, notably discouraging cruise ship visitation.
So, when PM Christopher Luxon said he had friends from overseas “in shock” that they can visit Kiwi attractions for free, and that it was “only fair” that foreign visitors make an additional contribution, the collective sound of chins hitting the floor echoed ominously across Australia.
If NZ pulls the trigger on the idea, as much as A$37 could be added to tourist bills if they want to see iconic attractions such as Milford Track, Mount Cook, and Cathedral Cove.
