Proyecto fin de máster: UP Pilots

Ji

ménez Mensaque,

Mi

guel

Muñoz Mol

i

na,

Fernando

Ovi

edo Romani

ega,

Bel

én

The success and final outcome on this project and this academic year would have not been possible without the support of many people surrounding us. We would like to take this opportunity to express our gratitude to all of them.

Firstly we would like to thank EADS-CASA and Fundación SEPI for giving us de opportunity to participate this recognized Master in the Aerospace Industry and to simultaneously gain working experience at Airbus Military and Airbus Operations. It has supposed a significant effort that we are sure will contribute positively to our personal and career development.

We would like to thank EOI for the continuous support and management of the programme along these eleven months. Especially we would like to highlight Vanesa Sánchez contribution to the proper organization of the course and for her support along this demanding journey. We would not forget to remember Paloma Gómez-Martelo and to all the EOI professors for the knowledge and experience that they have shared with us.

We are very thankful to César Sánchez for his invaluable guidance and keen interest in this business plan all along the completion of our project work. We are grateful for his dedication and support though he had schedule managing company affairs.

We would like to express our gratitude to our manager supervisors for the time that they have dedicated to us and for their understanding about the challenges in balancing working at EADS and taking lectures at EOI.

It is necessary to make special mention to all the people that have accompanied us along this exhausted and time demanding year. In particular to families and friends, thanks you for your patient and support in those stressful moments.

FIGURES

&

TABLES………6

GLOSSARY………14

MISSION

&

VISION……….18

ENVIRONMENT

ANALYSIS

………20

SECTOR

ANALYSIS………..27

INTERNAL

ANALYSIS……….49

MARKETING

PLAN………..59

OPERATIONAL

PLAN………..108

HUMAN

RESOURCES

PLAN………132

LEGAL

PLAN……….151

FINANCIAL

PLAN………177

CONTROL

PLAN……….208

RUNNING

THE

BUSINESS……….213

BIBLIOGRAPHY………..216

FIGURES & TABLES

E

NVIRONMENT ANALYSIS

Figure 1: World GDP growth share (Source: Airbus) ... 22

Figure 2: 2011-2031 real GDP annual growth by region (Source: Airbus) ... 22

Figure 3: Propensity to travel in 2012- India, China and USA (Source: Airbus) ... 23

Figure 4: Reasons to travel-2012 passengers ... 23

Figure 5: Global unemployment trends and projections (Source: OIT) ... 24

S

ECTOR

A

NALYSIS

Figure 2: Competitors geographical distribution... 33

Figure 3 Current Rishworth Aviation’s customers ... 34

Figure 4: Current CAE Parc Aviation’s customers ... 35

Figure 5: Regional airlines profitability outlook (source: IATA) ... 36

Figure 6: Number of passengers carried monthly (Europe, 2012) ... 37

Figure 7: World fleet 2012 & 2032. (Source: Boeing)... 38

Figure 8: New deliveries of Single-Aisle aircraft by region (2012-2021) (Source: Airbus) ... 38

Figure 9: Low Cost-Carriers penetration (2001-2009) (Source: Centre for Asia-Pacific Aviation) ... 39

Figure 10: North America ... 40

Figure 11: Central & South America ... 41

Figure 12: Europe ... 41

Figure 13: Africa ... 41

Figure 14: Middle East ... 42

Figure 15: Asia Pacific ... 42

Figure 16: Location of ranked schools. (Source: Garofali study) ... 45

Figure 17: Five Forces Analysis ... 48

I

NTERNAL

A

NALYSIS

Figure 1: Value Chain ... 53

Table 1: SWOT evaluation ... 53

Table 2: Costs on each Activity of Value Chain ... 55

Table 3: Cost Assessment for Value Chain ... 55

M

ARKETING

P

LAN

Figure 2: World regions (Source: Own elaboration with information from Boeing) ... 64

Figure 3: Market research study steps ... 64

Figure 4: European pilots market accessibility. (Source: Data from air traffic regulation organism of each country) ... 65

Figure 5: Air traffic evolution (2012-2031) (Source: Own elaboration with data from Airbus) ... 66

Figure 6: Total new pilots demand (2012-2031) ... 66

Figure 7: Single Aisle fleet 2012-2032 (Source: data from Boeing) ... 67

Figure 8: Asia-Pacific zones... 68

Figure 9: Total pilot demand (2013-2032) (Source: Own elaboration with data from both Boeing & ICAO) . 69 Figure 10: New pilots demand (2013-2032) (Source: Own elaboration with data from both Boeing and ICAO) ... 70

Figure 11: Low-Cost carriers growth (Source: Own elaboration with data from Airbus) ... 71

Figure 12: UP total, potential and accessible market ... 73

Figure 13: UP Potential market size & distribution ... 75

Figure 14: Total, potential & accessible markets proportions (2015) ... 78

Figure 15: Target segments selection ... 79

Figure 16: UP target segments ... 80

Figure 17: UP services ... 82

Figure 18: A320 Air Europa ... 85

Figure 19: Jet2.com ... 86

Figure 20: New route survival rate ... 87

Figure 21: A320 Wizzair ... 88

Figure 23: UP LinkedIn site ... 91

Figure 24: UP Facebook ... 91

Figure 25: UP Twitter ... 92

Figure 26: UP advertisement sample ... 92

Figure 27: UP job offer sample ... 93

Figure 28: Up stand example ... 94

Figure 29: UP Europe sales evolution ... 101

Figure 30: UP Southeast Asia sales evolution ... 101

Figure 31: UP China sales evolution ... 101

Figure 32: UP total sales evolution (New contracts & ongoing contracts per year) ... 102

Figure 33: RPK annual distribution (Source: IATA) ... 102

Figure 34: UP pilots occupation distribution ... 103

Figure 35: UP potential customers ... 103

Table 1: Factors analysis ... 66

Table 2: Boeing fleet segmentation (Source: global market forecast Boeing) ... 67

Table 3: Pilot per aircraft ICAO estimation (Source: ICAO) ... 68

Table 4: Total pilot’s demand (2013-2021) data ... 69

Table 5: New pilots demand (2013-2021) data ... 69

Table 6: Market segments ... 70

Table 7: LCC & Regular carriers traffic share ... 71

Table 8: LCC & Regular carriers data (Source: Own elaboration with data from UP airlines research) ... 71

Table 9: Outsourcing percentages (Source: Own elaboration) ... 73

Table 10: UP annual potential market size & distribution (Source: Own elaboration) ... 75

Table 11: UP annual accessible market size & distribution (Source: Own elaboration) ... 77

Table 12: Short term events & promotions costs... 94

Table 13: Annual events & promotions costs ... 96

Table 14: UP cockpit crew leasing prices per region, pilot category and contract duration ... 97

Table 15: Captain/First Officer UP ratio distribution... 99

Table 16: Initial market share ... 100

Table 17: UP new customers per year estimation ... 103

Table 18: Europe example of potential customers (2015-2021) ... 104

Table 19: Recruitment for airlines service sales estimation ... 106

Table 21: Commercial T&E costs average per customer obtained ... 107

Table 22: Total travel & expenses commercial costs ... 107

O

PERATIONAL

P

LAN

Figure 2: Airports by passenger traffic in 2012 (Source AENA) ... 110

Figure 3: Areas studied close to the airport in Madrid and Barcelona ... 111

Figure 4: Pool of pilots managing process ... 112

Figure 5: Pool size forecast ... 113

Figure 6: Pool standard management process ... 115

Figure 7: Training department operations ... 115

Figure 8: Initial training processes ... 118

Figure 9: Renewal training processes ... 119

Figure 10: Continuous attention process ... 121

Figure 11: Periodical reporting process ... 122

Figure 12: Contact with training academies process ... 123

Figure 13: Office layout ... 126

Table 1: Valuation of cities for the office. (Several sources, Own elaboration) ... 111

Table 2: Pool efficiency forecast ... 114

Table 3: Variables for pilots classification ... 114

Table 4: Pilot licences for commercial air transport ... 116

Table 5: Pilot ratings & courses for commercial air transport (Source: Own elaboration with data from Cesda, Global Training Aviation, Baltica, FTEJerez, Hubai)... 116

Table 6: Recency requirements (Source: Own elaboration with data from EASA) ... 117

Table 7: Training Processes Duration (Source: Own elaboration with data from Cesda, Global Training Aviation, Baltica, FTEJerez, Hubai) ... 118

Table 8: Renewal training processes (Source: Own elaboration with data from Cesada, Pilote de Ligne, FTEJerez) ... 119

Table 9: Training centres analysis: Type rating price (Source: Data from training academies) ... 123

Table 10: Resources for office spaces ... 127

Table 11: UP facility initial investment ... 128

Table 13: Type rating costs. (Source: Baltica) ... 129

Table 14: Promotion costs ... 129

Table 15: Average transportation cost collection ... 130

Table 16: Pilot support costs ... 131

H

UMAN

R

ESOURCES

P

LAN

Figure 2: Miguel Jiménez ... 134

Figure 3: Luis Sáez ... 134

Figure 4: Fernando Muñoz ... 134

Figure 5: Beatriz Rituerto... 135

Figure 6: Belen Oviedo ... 135

Figure 7: UP pilots ... 138

Figure 8: Recruitment process (Source: Own elaboration) ... 139

Figure 9: Existing gross annual salary waves ... 142

Figure 10: Pilot schools ... 149

Table 1: Forecast staff increase in UP ... 138

Table 2: UP staff category distribution ... 142

Table 3: UP pilots categories ... 145

Table 4: Fixed salary categories ... 145

Table 5: Percentage received of average hour flown price ... 146

Table 6: Total pilot salary in 2015... 146

Table 7: Retention period and penalties ... 148

Table 8: Pilot schools ... 149

L

EGAL

P

LAN

Figure 2: Potential UP customers ... 155

Figure 5: Bali, Indonesia (Source: La Terre vu du ciel) ... 160

Figure 6: Clyde & Co ... 162

Table 1: Cost for incorporation of the company (2015) ... 162

Table 2: Costs per pilot in Asia (2015) ... 162

Table 3: Legal consultancy costs ... 163

F

INANCIAL

P

LAN

Figure 2: Source of projects for angel investors ... 180

Figure 3: Total pilot crew leasing revenues & number of pilots ... 183

Figure 4: Revenue distribution per region ... 184

Figure 5: Revenues distribution per category ... 184

Figure 6: Distribution of pilot pool costs ... 188

Figure 7: Distribution of other costs ... 191

Figure 8: UP costs summary ... 192

Figure 9: Annual revenues breakdown ... 194

Figure 10: Revenues breakdown in 2021 ... 194

Figure 11: Total number of pilots per year according to different scenarios ... 196

Figure 12: Hypothesis in revenues from secondary services ... 196

Figure 13: Total number of UP staff ... 197

Figure 14: Cash needs from January 2015 until December 2016 ... 198

Figure 15: Cash flow from January 2015 until December 2016 with financial needs covered ... 199

Figure 16: Net profit distribution ... 201

Figure 17: P&L resulting of applying previous hypothesis ... 201

Figure 18: Profitability ratio: Return on sales ... 204

Figure 19: Profitability ratio: Return on capital employed ... 205

Figure 20: Liquidity ratio: Operating cash flow ... 205

Figure 21: Debt Ratio ... 205

Figure 22: Free cash flow ... 206

Figure 23: UP dividends ... 207

Table 2: Revenues per category and region ... 183

Table 3: Consultancy and recruitment services revenues ... 185

Table 4: Pilot pool salary cost ... 187

Table 5: Total pilots cost ... 188

Table 6: Overhead Costs ... 189

Table 7: Commercial travel & expenses cost ... 189

Table 8: Secondary services costs ... 190

Table 9: Other costs ... 191

Table 10: Establishment costs ... 193

Table 11: Early investment costs ... 193

Table 12: Initial market share according to the different scenarios ... 195

Table 13: Profit & Losses statement ... 200

Table 14: Cash flow statement ... 202

Table 15: Balance sheet statement and dividends ... 203

Table 16: Financial ratios ... 204

Table 17: Free cash flow ... 206

Table 18: WACC ... 207

Table 19: Proposal for investors ... 207

C

ONTROL

P

LAN

Table 1: Risk assessment ... 209

Table 2: Risks and mitigation ... 210

Table 3: UP milestones gates ... 212

R

UNNING THE

B

USINESS

P

LAN

A

NNEXES

Figure 1: Screen captures from X-Plane simulator during a A320 flight ... 265

Table 1: ECA member countries ... 230

Table 2: Competitors service portfolio identification ... 232

Table 3: Ranking Garofali ... 233

Table 4: Aircraft market sectors (Source: Boeing market forecast) ... 234

Table 5: Airlines study ... 249

Table 6: Type Rating Training Information (1). ... 252

Table 7: Type Rating Training (2) ... 252

Table 8: Type Rating Training Information (3) ... 253

Table 9: MCC Information ... 253

Table 10: IR Training Information ... 254

Table 11: Recency Cost (own Source: Estimation from training Academies information) ... 254

GLOSSARY

ADB Active Dashboard

AENA Aeropuertos Españoles Y Navegación Aérea

AESA Agencia Estatal de Seguridad Aérea

ATO Air Traffic Organization

ATPL Airline Transport Pilot Licence

BOE Boletín Oficial del Estado

CAA Civil Aviation Authority

CARG Compounded Annual Rate Growth

CBT Compulsory Basic Training

CIS Commonwealth of Independent States

COPAC Colegio Oficial de Pilotos de Aviación Comercial

CPL Commercial Pilot Licence

CRM Crew Resource Management

CRM Customer Relationship Management

EASA European Aviation Safety Agency

EBAA European Business Aviation Association

EBACE European Business Aviation Convention & Exhibition

EBAN European Business Angels Network

EBIT Earnings Before Interests and Taxes

ECA European Cockpit Association

ECAC European Civil Aviation Conference

EEC European Economic Community

EFIS Electronic Flight Instrument System

ESBAN Spanish Business Angels Network

EU European Union

F/O First Officer

FFS Full Flight Simulator

FRMS Fatigue Risk Management System

FSTD Flight Simulation Training Devices

FTO Flight Training Organization

GDP Gross Domestic Product

GMF Global Market Forecast

GTA Global Training Aviation

HR Human Resources

IATA International Air Transport Transportation

ICAO International Civil Aviation Organization

ICO Instituto de Crédito Oficial

IFALPA International Federation of Airline Pilot’s Associations

IFR Instrument flight time

IFR Instrument Flight Time

IOS Instructor Operator Station

IR Instrument Rating

IRR Internal Rate of Return

IT Information Technology

JAA Joint Aviation Authority

JV Joint Venture

KDF Key Driver Factor

KPI Key Performance Indicator

KRS Key Realization Steps

LAPL Light Aircraft Pilot Licence

LST Language Skill Test

MBA Master in Business Administration

MCC Multi Crew Cooperation

ME Multi-Engine

MEP Multi Engine Piston Rating

MFTD Maintenance/Flight Training Device

MPL Multi Crew Pilot Licence

MRO Maintenance, Repair and Operations

MRP Material Requirement Prevision

NG Next Generation

NIF Number of Fiscal Identity

NPV Net Present Value

OAA Oxford Aviation Academy

OIP Ibero-American Pilots

PIC Pilot In Command

POH Pilot Operating Handbook

PPL Private Pilot Licence

PyME Pequeña y Mediana Empresa

RGB Red, Green, Blue

RO Representative Office

ROA Return On Assets

ROC Return On Capital

ROCE Return On Capital Employed

ROE Return On Equity

ROS Return On Sales

RPK Revenues Passenger Kilometre

RVSM Reduced Vertical Separation Minimum

SEARIF South East Asia Regional Initiative Forum

SEP Safety and Emergency Procedures

SEPLA Sindicato Español de Pilotos de Líneas Aéreas

SGR Sociedad de Garantía

SL Limited Liability Company

SOPS Standard Operative Procedures

SPCC Single Pilot Cruise Concept

SRO Strategic Roadmap Objectives

SWOT Strengths, Weaknesses, Opportunities and Threats

TCO Total Cost of Ownership

TM Trademark

TR Type Rating

UAS Unmanned Air Systems

UP U-Pilots Company

VAT Value Added Tax

VC Venture Capital

VPT Virtual Procedure Trainer

WACC Weighted Average Rate of Return

WFOE Wholly Foreign Owned Enterprise

MISSION & VISION

BUSINESS IDEA... 19

UP MISSION ... 19

UP VISION ... 19

BUSINESS IDEA

Airlines’ business model is changing to adapt to new tendencies in the market, as are the increase in fuel price, the variability of demand, the increase in competitiveness which forces a decrease of prices in flight tickets and the seasonality work peaks. In order to maintain profitability, airlines have started to outsource part of their services, to gain flexibility and to reduce fixed costs when the demand decreases.

UP is born with the idea of fulfilling the current outsourced cockpit crew needs of airlines, with the aim of covering the increasing demand in the aeronautical sector of external services and the shortage of pilots in regions like Asia. In addition, UP sets a new business model, offering to its pilots’ stability and a career development plan.

UP will hire pilots, will pay their training needs such as licences renewal or new type rating, and then will offer those pilots to airlines for outsourced services. When a contract with one specific customer ends, the pilots remains as part of UP and a new contract with another customer is searched.

UP MISSION

To allow airlines to optimize its operations, reduce costs and offer a better service to their passengers while satisfying airlines requirements in flexibility and safety, by offering integral outsourcing services with recognized quality pilots.

UP VISION

To become a global reference in pilot leasing solutions in Europe and Asia by enhancing UP pilots, partners and customers benefits through stable and trusty long-term relationships.

UP VALUES

The following list of core values reflects what is truly important to UP as an organization:

 Customer satisfaction and quality service as focus of UP organization and core activities.

 Provide stable labour conditions.

 Partnership model based on stable and long-term contracts by building-up intimacy through fluent and honest communication.

ENVIRONMENT ANALYSIS

POLITICAL FACTORS ... 21

ECONOMICAL FACTORS ... 21

SOCIAL FACTORS ... 24

POLITICAL FACTORS

Around the world there are several political scenarios going on and possible decisions that will affect the future performance and growth of the aviation sector. A fast overview in the main aviation markets has been taken:

Regarding North America, USA is focused on domestic problems, the “fiscal cliff”. It can bring new measures to reduce deficit including more airport and fuel taxes to airlines and other measures that can affect airlines profit and operation. To avoid it, IATA (International Air Transport Association) is lobbing every taxation campaign to avoid new taxing policies.

Concerning China, the new Prime Minister could bring a new wave of opening strategies, including a broader deregulation of the domestic market that is still heavily controlled by the government. It will result into an increase of competitiveness in Chinese aviation sector, and a further penetration of foreign companies in this huge market. Regarding India, it is expected to continue growing; only taken into account the domestic flights, traffic passenger is expected to triple within 20 years.

In Europe, the unstable situation due to crisis and the power of Germany could bring changes in medium term in issues regarding regulation, taxation and licenses for airlines. But if tendency keeps on centralizing as expected and economy recovery starts, the cross-border interaction will increase, boosting European flights.

General tendency is to simplify visa policies, with more “Visa on arrival programmes” replacing the traditional procedure. The increase in globalisation has led to the need for more air traffic rights and a greater spread of economic activity and air travel.

The liberalization of air transport has allowed new services and airline business models to rise up, like Low Cost Carriers, which have become one of the key drivers over the last decade. Both liberalization and Low Cost Carriers have played an important role in productivity improvement regarding airline operators and more efficient and capable aircrafts, as well as a ticket price stimulation with an average of 3% yearly decrease per unit of passenger traffic during the last thirty years. However, this liberalization is not equal in all regions; for instance, China does not have a liberated market.

ECONOMICAL FACTORS

E

CONOMIC

G

ROWTH

Over the medium term, the global economy’s performance is expected to improve gradually, thanks mainly to more aggressive business investment. Emerging economies have been, and will continue to be, the single most important engine of the world economic growth. Figure 1 shows the evolution and history of world GDP growth share.

FIGURE 1:WORLD GDP GROWTH SHARE (SOURCE:AIRBUS)

The real GDP average annual growth by region from 2011 to 2031 can be seen in Figure 2. It also shows the fact that emerging regions will drive long term economic growth.

FIGURE 2:2011-2031 REAL GDP ANNUAL GROWTH BY REGION (SOURCE:AIRBUS)

U

RBANIZATION

&

M

IDDLE

C

LASS

G

ROWTHS

According to the United Nations, the worlds population will increase to 8,4 billion people in 2032. Associated with this, two phenomena will occur:

 Strong and rapid urbanization: In 2032, 61% of the world population will live in a city compared to

52% in 2012.

75% 40% 25% 22% 55% 70% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1992-1997 1997-2002 2002-2007 2007-2012 2012-2017 2017-2022 2022-2027 2027-2032 G D P G row th Sha re Emerging economies Developing economies Advanced economies

0,0% 1,0% 2,0% 3,0% 4,0% 5,0% 6,0% 7,0% 8,0% Indian Sub Continent

PRC South America Africa Asia Middle East Central America CIS Pacific North America Europe Japan

 Middle-class growth in emerging countries: Especially in Asia where the global middle class will grow by 60% between 2012 and 2022 and by 134% in 2032.

In parallel, middle-class consumption will grow at the same pace. Growth in number of middle class

consumers directly benefits the aviation industry. Figure 3 shows that a small increase in GDP per capita

results in a large increase in trips per capita in less developed countries (The figure shows the relation in China and India as an example of emerging countries); however, a small increase in GDP results in a small increase in trips in developed countries (USA is used as example).

FIGURE 3:PROPENSITY TO TRAVEL IN 2012-INDIA,CHINA AND USA(SOURCE:AIRBUS)

L

EISURE

T

RAVEL

&

M

IGRATION

Leisure travel is expected to grow at 4,6% per year. The share of leisure travel spending will continue to increase due to the growth of the new middle-class in emerging countries. As a result, in ten years China is expected to become the number one contributor to travel and tourism GDP, overtaking the USA. Business travel is expected to grow at 4,1% per year.

Migration is also an air traffic vector. In general, most migration is within the region. The number of students outside their country of citizenship was around 3,7 million in 2009; according to UNESCO the international student population is expected to be around 7 million in 2020.

A billion passengers travelled outside their country in 2012 and 52% of them made it by air. Figure 4 shows the main reasons to travel of 2012 passengers. Leisure travels represent a 51% of the total share while family and friends travels, directly related with migration, is a 27% of the total travels.

51%

15% 7%

27%

Leasure

Business / Professional Not specified

Visit family & friends / Health

O

UTSOURCING TENDENCY

General tendency on most economic sectors is to outsource the processes that are not core to the companies. Initially, outsourcing was applied in peripheral activities, but nowadays it is even reaching parts of core activities. By doing this, companies can focus on R&D processes and concentrate its resources in the main part of its business.

As example, Spain is the European country where outsourcing will grow the most in 2013, following the trend of last years. It is calculated that outsourced activities in Spain increased a 73% during 2013.

S

UMMARY

Summarizing what has been said:

 Economic growth is a driver for air traffic growth.

 Emerging regions will contribute a 70% of economic growth from 2027 to 2032.

 Economic growth in emerging countries will outstrip the developed countries.

 Increasing urbanization and consumption will drive economic growth and propensity to fly.

 Growth in middle classes is also a key for air traffic growth. Today, 32% world is classified as middle class; in 2032 it will be 62%. Middle class will grow four times in Asia-Pacific.

 Outsourcing tendency keeps growing.

Due to all these factors already analyzed, world annual air traffic growth is expected to be 4,7%.

SOCIAL FACTORS

Social and Employment scenario has several differences among countries and inside each country. For the last three years, most emerging and developing countries have registered positive improvements related with employment.

In some cases developed countries situation is more complex. Some of them have recovered part of the lost job positions due to the crisis in 2008, like Australia, Canada, New Zealand or Korea. In Japan and USA there are also

indicators showing improvements. Europe still has difficulties, but its labour market and social panorama starts showing signs of recovery, as it can be seen in figure 5 where it is shown the global unemployment trend, with data from 2012.

140 150 160 170 180 190 200 210 220 Tot al un e m pl oy m e nt ( m ill ion s)

Total unemployment Downside scenario

P

ILOTS

C

URRENT

S

ITUATION

Social perception of pilots is not how it used to be. Nowadays in Europe few people are interested in becoming a pilot, due to:

 High unemployment rate.

 Reduction of pilot salaries due to crisis.

 High training costs that the pilot has to face when he is not working for an airline.

 Migration as a way to find new opportunities.

Pilots Migration

According to ICAO, 981.000 pilots will be needed in the world in 2030 due to the expected increase of air traffic. Training capacities of each country are not enough to fulfil this need, which would lead to a shortage of available pilots. The strongest increase of need of pilots will be in Asia Pacific, Middle East, and Africa. Only in North America there will be a surplus of pilots.

To compensate the imbalances of pilots identified among regions, the response will probably be the migration of pilots from regions with surpluses towards regions experiencing shortages. Some countries, to attract the desired number of pilots, may tend to lower their standards for granting flying privileges, which could lead to a decrease in safety. This is already happening; pilots are being forced to migrate.

TECHNOLOGICAL FACTORS

S

INGLE

-P

ILOT

F

LIGHT

D

ECK

The aerospace industry is working, throughout technological developments, towards an airline flight deck that can safely be operated by a single pilot. It is called “Single-Pilot Cruise Concept” (SPCC).

A team led by Thales Avionics, consisting of many other high-profile European companies plus Boeing and Jeppesen from the USA, is working toward an

advanced airliner cockpit that can be managed by a single pilot backed up by high quality communications links with ground support.

Although the move from a two-person flight crew to single pilot operation for selected commercial aircraft suggests a major redesign of flight deck procedures, it seems to be the future trend for the following decades1.

U

NMANNED

A

IR

S

YSTEMS

FAA forecasts that the largest near-term growth in civil/commercial unmanned operations will be in the area of Small Unmanned Air Systems (sUAS). The FAA is making a significant effort to develop the necessary regulatory framework for Small Unmanned Air Systems to operate. The regulatory framework will include standards, airworthiness criteria, certification and procedures for sense and avoid systems, as well as protocols to be used for the certification of command control and communication systems in the defined flight environment.

Next step in this technology could be the implantation of the unmanned aircraft system in commercial aviation, in the field of passenger transportation. But for now, this is a far away future.

R

EDUCTION OF

F

UEL

C

ONSUMPTION

Environmental and economical reasons (a small reduction in fuel consumption leads to reduce substantially costs) lead aeronautical companies to be focus on reducing fuel consumption, mainly in four ways:

 Improvements in the aircraft like reduction of drag, improved engines, decrease weight, winglets, etc.

 More efficient operations, regarding efficient air traffic management.

 Infrastructure improvements, linked to reduction of flight period by using routes optimization.

SECTOR ANALYSIS

CIVIL AIR TRAFFIC REGULATION ... 28

COMPETITORS ... 32

POTENTIAL CUSTOMERS ... 36

TRADE UNIONS & ASSOCIATIONS ... 42

CIVIL AIR TRAFFIC REGULATION

Aeronautical activities are regulated by different organisms:

At international level: International Civil Aviation Organization (ICAO). It is a specialized agency of the United Nations, which sets the minimum Standards and Recommended Practices for international civil aviation following the Chicago Convention. Individual States remain responsible for regulating their aviation industries but have to take into account the requirements of the Chicago Convention and the minimum standards established by ICAO.

At European level: European Aviation Safety Agency (EASA). Its laws are immediately applicable in all European Union, being legally binding.

In Asia there is not yet a common regulation, but nowadays there is an ICAO Regional Aviation Safety Group for Asia Pacific and a South East Asia Regional Initiative Forum (SEARIF) in order to develop harmonized regulations for the region. Up to now, the aviation safety is made by following the ICAO’s State Safety Programme.

Apart of Annexes from Chicago Convention (Annexes 1, 2 and 6), the two main documents from EASA

which affect the scope of UP are: EU-OPS 1 (because it is for civil aircrafts) and EASA Regulation for Flight

Crews.

In addition to all previous information, in the document are included the following points:

 All requirements to obtain licenses and titles for first time, as age requirements to get access to

formation, physic and psychic requisites and so on;

 Validity and effectiveness of the titles, licenses;

 Permits and authorizations;

 Legislation for aviation schools and examiners;

 Legislation for medical centres and medical examiners.

P

ILOTS

L

ICENCES AND

R

ATINGS

Commercial Pilot Licences

Airline Transport Pilot Licence (ATPL)

The privileges of the holder of an ATPL are, within the appropriate aircraft category, to:

 Exercise all the privileges of the holder of a Light Aircraft Pilot Licence (LAPL), a Private Pilot Licence (PPL) and a Commercial Pilot Licence (CPL).

 Act as Pilot in Command of aircraft engaged in commercial air transport.

The practice of the privileges granted by a licence should depend on the validity of the ratings contained therein, if applicable, and of the medical certificate.

To be promoted to Captain in an airline, the pilot must hold an ATPL License for which he must meet a number of requirements, including having at least 1.500 flight hours accumulated (with certain characteristics) and performing a skill test.

Commercial Pilot Licence (CPL)

The privileges of the holder of a CPL are, within the appropriate aircraft category, to:

 Exercise all the privileges of the holder of an LAPL and a PPL.

 Act as Pilot in Command or co-pilot of any aircraft engaged in operations other than commercial air transport.

 Act as Pilot in Command in commercial air transport of many single-pilot aircraft.

 Act as co-pilot in commercial air transport.

As in the ATPL licence, the practice of the privileges granted by a licence should depend on the validity of the ratings contained therein, if applicable, and of the medical certificate.

CPL with Frozen ATPL

Pilots can study the CPL training and theory module of the ATPL at the same time. This way, when the pilot achieve 1.500 hours of experience he only needs to attend to the flight training module of ATPL in order to obtain the ATPL licence. Moreover when a pilot has a CPL with frozen ATPL, he does not need to do an extra course to have the instrumental rating (IR) or the Multi Crew Cooperation Course (MCC) because both are included in this training.

Multi Crew Pilot Licence (MPL)

The privileges of the holder of an MPL are to act as Co-Pilot (First Officer) in an airplane required to be operated with a Co-Pilot. The holder of an MPL shall have the privileges of his instrumental rating (IR) limited to airplanes required to be operated with a Co-Pilot.

Commercial Pilot Ratings

Instrument Rating (IR)

Operations under Instrument Flight Time (IFR) on an aircraft should only be conducted by holders of a PPL, CPL, MPL and ATPL with an IR appropriate to the category of aircraft. The privileges of a holder of an IR are to fly aircraft under IFR with a minimum decision height of 60 m.

An IR shall be valid for one year. It should be revalidated within the three months immediately preceding the expiry date of the rating. If the IR has not been revalidated or renewed within the preceding seven years, the holder will be required to pass again the IR theoretical knowledge examination and skill test.

Multi Crew Cooperation Training Course (MCC)

MCC means the functioning of the flight crew as a team of cooperating members led by the pilot-in-command. The MCC training course shall be completed within six months at an ATO (Air Traffic Organization).

Type Rating

To be able to work in an Airline Transport Company, the pilot must take a type rating course (depending on aircraft type operated by the Company) with a Type Rating Instructor and pass a theory test plus a flight check with a Type Rating Examiner. Once the application for license issue has been processed with the competent authority, the type rating can be annotated in the license with the corresponding restriction of “Co-Pilot”.

The privileges of the holder of a class or type rating are to act as pilot on the class or type of aircraft specified in the rating.

An applicant for the first type rating course for a multi-pilot aircraft should be a student pilot currently undergoing training on an MPL training course or comply with the following requirements:

 To have at least 70 hours of flight experience as pilot in command on aircrafts.

 To hold a multi-engine IR.

 To have passed the ATPL theoretical knowledge examinations.

 Except when the type rating course is combined with an MCC course one of these conditions needs to be fulfilled:

o To hold a certificate of satisfactory completion of an MCC course in aircrafts.

o To have at least 500 hours as a pilot in multi-pilot operations on single-pilot multi-engine aircrafts, in commercial air transport in accordance with the applicable air operations requirements.

The period of validity of class and type ratings shall be one year and for the revalidation, the pilot should:

 Pass a proficiency check in the relevant type of airplane or an FSTD (Flight Simulation Training Devices) representing that class or type, within the three months immediately preceding the expiry date of the rating.

 Complete during the period of validity of the rating, at least one of these conditions:

o 10 route sectors as pilot of the relevant class or type of airplane.

 A pilot working for a commercial air transport operator, approved in accordance with the applicable air operations requirements, who has passed the operators proficiency check combined with the proficiency check for the revalidation of the class or type rating, shall be exempted from complying with the requirement above.

Moreover, the revalidation of an IR, if held, may be combined with a proficiency check for the revalidation of a class or type rating.

Commercial Pilots Entry Paths

There are four main entry paths to obtain the necessary training to become a commercial pilot:

 Integrated Course: Integrated courses are offered from an FTO (Flight Training Organisation). These are full time courses that bring pilots from zero to a level where they can apply to an airline for a position as a First Officer. These courses must be completed in full or the pilot won't qualify with any licence. It takes approximately one year.

 Modular Course: This course gives the same qualification as the Integrated Course but it is done on part time basis where students still have the option to work while completing their training. It does take longer than an integrated course, from approximately 18 months to 2 years.

 Airline Sponsor: In the past this was the preferred and most popular way to achieve a career as an Airline Pilot. An Airline would advertise openings for a cadetship and sponsor the student for their training and offer them a job at the end. In recent times, due to the changing economic structure of airlines, this has been phased out.

 Air Corps: Similar to the Airline sponsor, the Defence Forces offered a cadetship for the Air Corps where pilots are trained and contracted for a minimum of ten years. At the end of this time pilots can move onto an airline with flying experience.

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EGULATORY

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RAMEWORK OF

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OBILITY

When a European pilot is going to work for a foreign airline, there are three possible scenarios related with the pilot license:

FIGURE 1:RECOGNITION OF LICENC ES

Fly Foreign Aircraft for a Short Term Period

If the pilot is going to work in a foreign country (different country than his licensing state) for a period shorter than six months, the pilot licence must be validated. This validation is made once the pilot is hired by the airline because the contract with the airline, or a letter from the airline, is a requirement for making

Pilot Licence

Flight Foreign Aircraft

Flight Home Aircraft

Short Term: Validation

Long Term: Conversion

the validation possible. The tests, exams and duration of the process for the validation depend on the country.

Fly Foreign Aircraft for a Long Period

If the pilot is going to work in a foreign country (different country than his licensing state) for a long period, longer than six months, the pilot license must be converted. This conversion is made once the pilot is hired by the airline because the contract with the airline, or a letter from the airline, is a requirement for making the validation possible. The tests, exams and duration of the process for the conversion depend on the country.

Fly Home Aircraft

If the pilot licence is used on an aircraft which is registered in the state where the licence has been issued or validated, the validation of the license is not needed, unless the aviation authority of the country asks explicitly for the validation.

COMPETITORS

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ILOT

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ROKERS

The global market has been analyzed and more than twenty competitors have been identified. All of them offer what is called crew leasing. This service is described as an instant access to highly experienced flight crew, whatever the location or the route.

Main competitors are: Paramont, Recrutair, Tempo Aviation, Sigma Aviation, ContractAir, IAC Global, CAE PARC Aviation, Rishworth Aviation, Baltic Aviation, PAS Aviation, WASINC, among others.

Those companies usually offer more than one kind of service. The service portfolio of those companies is summarized in Annex “Sector Analysis – Competitors Service Portfolio”

Most demanded services to competitors are new routes testing, seasonal needs fulfilling, crews replacing during training or transition, new aircraft type integration, start-ups operation, and ferry and test flights. Their offer tries to cover the recruitment needs resulting from seasonal peaks in operation, fleet expansion or changes, conversion training programmes, or other unexpected growth or change in the market. In addition, crew brokers can also satisfy long term resources, if requested.

Related with the service offered to the crews, leasing companies offer visibility of the job positions available in the market. Usually none of them takes care of pilot training courses or licenses. At most, some companies would provide training support on its office, but always paid by the pilot. Some of them can stand out the rest by offering insurance to the pilot, as Rishworth does.

Next step in the analysis has been to analyze competitors’ operational area. The results are exposed in Figure 2. On it, competitors’ symbol has been placed over their main actuation areas. Rishworth Aviation and CAE Parc Aviation symbols are out of any area because both have global presence.

Most of the job opportunities available on the described company’s website are in Asia. Although the leading leasing companies are based in USA, Europe and New Zealand, all of them have locations in the emerging regions. It seems that some of them have partners in China and India in order to have closer contact with the potential customers.

FIGURE 2:COMPETITORS GEOGRAPHICAL DISTRIBUTION

From all previous companies a brief analysis of two of the biggest ones, Rishworth Aviation and CAE Parc Aviation, is detailed below:

Rishworth Aviation

Rishworth has a global presence; with regional representation in Sweden, New Zealand, Indonesia, China, Japan, India and Vietnam. It is supported by financial institutions from Australia and New Zealand. Its services include: aviation recruitment, crew leasing, crew training, aviation human resource consulting services, and market intelligence. They are specialised in crew leasing, providing short and long term contracts (usually from six months to five years contract).

Their operating way is structured in the following phases:

 Information and education, through the provision of concise information related to the process;

 Pre-screening and selection, through the provision of the information and background of candidates;

 Deployment and logistics services;

 On-contract care (contract personnel), providing global insurance coverage for pilots and supporting them.

Rishworth’s contract terms shows that the Airline is responsible for any local income taxes payable in relation to the fees, for the accommodation costs (base and away from base residences), for transportation costs, and also for visa and travels at the beginning and at the end of the contract.

Customers

Some of their customers are represented below:

FIGURE 3CURRENT RISHWORTH AVIATION’S CUSTOMERS

Crew Experience

Rishworth Aviation offers to flight crew access to insurance options. They have an expatriate medical insurance with a broad range of cover provided, including options of cover for family doctor, dental, optical, US cover, evacuation and repatriation, depending on the package selected. It also can include access to 24/7 global emergency response service, and also access to specialists such as language support, medical specialists and air ambulance providers.

They are quite recognised in helping pilots on their contracts with airlines. They provide interview and screening preparation packs to pilots, as well as medical insurance and personalized support throughout country representatives.

CAE Parc Aviation

CAE Parc Aviation is one of the global market leaders in providing aviation personnel on lease to airlines and aviation support organisations, currently providing over 1.400 Flight Crew & Technical Personnel on assignment with 70 clients, operating 20 different aircraft types in over 40 countries.

Originally a subsidiary of Irish flag carrier Aer Lingus, the ownership of CAE Parc Aviation passed to management following a buyout in 1995. In July 2008, CAE Parc Aviation was acquired by the Oxford Aviation Academy (OAA) group, adding CAE Parc Aviation's flight crew and technical resourcing services to the group's extensive training portfolio.

CAE Parc Aviation offers:

 Flight Crew Resourcing

 Technical Support Services

 Ferry Flight Services

 Executive Search & Selection

In a different sector, CAE Parc provides also Support Services in the fields of Aircraft Leasing, Engineering Services and MRO & Airline Technical Services.

Customers

From the Airline perspective CAE Parc differentiators are: the provision of skilled personnel required to carry out a specific services or functions from a wide variety of activities, the flexibility that their personnel services provide in their daily operations, the diversification of CAE Parc operations, the world wide location in Beijing, Dublin, Shannon, Shanghai and Tokyo with a group network extended to 42 locations across the World. A sample of CAE Parc customers are:

FIGURE 4:CURRENT CAEPARC AVIATION’S CUSTOMERS

Crew Experience

From the personnel point of view, CAE Parc offers security and back-up of a global personnel solutions and aviation training organisation, rewarding remuneration packages including attractive fringe benefits, opportunity to work with some of the world's leading airlines, a wide choice of overseas bases, flexibility of short and long term assignments, full support of an experienced aviation team while on assignment including a 24 hours emergency back-up service, guaranteed on time payment every month, comprehensive personal accident and emergency insurance provided by CAE Parc Aviation, free of charge and access to comprehensive health insurance and loss of licence insurance at discounted group rates.

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EASING

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OMPANIES

POTENTIAL CUSTOMERS

UP main customers will be airlines with need of qualified pilots. According to Boeing Market Forecast (2013), nowadays there are more than 900 airlines in operation around the world.

Main factors impacting on the airline industry are fuel prices, economic growth and development, environmental regulations, infrastructure, market liberalization, aircrafts capabilities, other ways of transport, business models and emerging markets. Each of these forces can have both positive and negative impact on the industry. Fuel is now one of the largest components of an airline’s cost structure. Airlines are trying to obtain both cost reductions and revenues in other areas in order to compensate the higher fuel cost.

Operating statistics suggest that airlines are deploying strategic techniques to cover higher fuel expenses and to increase profitability. Despite the complicated economy, 2012 was one of the best years for airlines since the Great Recession. As it is shown in Figure 5 airlines profitability forecast for the year 2013 is even better than in the year 2012.

FIGURE 5:REGIONAL AIRLINES PRO FITABILITY OUTLOOK (SOURCE:IATA)

In order to reduce costs, all airlines are optimizing resources, including optimization of its pool of pilots. LCC started to use flight crew leasing some years ago, avoiding to have an excess of pilots when the demand is lower and having pilots needed for new routes aperture, fleet growth or temporary routes in periods with higher demand. These temporary routes are opened to face the seasonality of air traffic.

Airlines Seasonality

The total number of passengers carried by air varies from one month to another. As it is shown in Figure 6, during summer period the air traffic is higher. This is related with the important number of leisure travels made in this period of the year.

As an example of this air traffic variation the annual distribution of the number of passengers carried in Europe in 2012 is represented below:

-1% 0% 1% 2% 3% 4% 5%

North America

Europe Asia Middle East

Latin America

Africa 2012

FIGURE 6:NUMBER OF PASSENGERS CARRIED MONTHLY (EUROPE,2012)

Related with the increment of the air traffic during summer time is the fact that many airlines open stationary routes during those summer months to offer more touristic destinations to their customers. Cockpit crew leasing is a good option to cover work peaks of those seasonal routes if the airline does not have enough pilots in their own pool. As an example of airlines using these temporary routes in Table 1 are represented some of the summer routes opened from Spain to other parts of Europe in summer 2013:

Airline 2013 Summer Route

Vueling Spain – Grece

Vueling Spain - Italy

Iberia Spain – Grece

Lufthansa Spain – Grece

Air France Spain - France

Easyjet Spain – France

TABLE 1:SOME SEASONAL ROUTES FROM/TO SPAIN (SUMMER 2013)

Airlines’ Fleet

Since pilot need to be trained to fly a specific type of aircraft, it has been analyzed which are the most used types of aircraft in the market. The classification for aircrafts with more than 100 passengers is usually: Single aisle aircraft, Twin-aisle aircraft and Large aircraft.

Figure 7 represents both the actual and the twenty year fleet forecast of new passenger and freighter aircraft. 0 10000 20000 30000 40000 50000 60000 70000 80000 90000 100000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

FIGURE 7:WORLD FLEET 2012&2032.(SOURCE:BOEING)

As it can be seen, Single Aisle aircraft is the most common aircraft type. In 2013, it represented a 78% of the total commercial airline fleet of aircraft over 100 seats.

Single Aisle Fleet is expected to grow a 3,4% per year. North America and Europe will drive the demand, as they look to replace their aging fleets. These two regions combined will account for 46% of the overall demand for new Single-Aisle aircraft. Asia, with its growing inter-regional and domestic networks and demand will also take a significant share of the market with 34% of Single-Aisle demand. It shows the new deliveries of single-aisle aircraft by region.

FIGURE 8:NEW DELIVERIES OF SINGLE-AISLE AIRCRAFT BY REGION (2012-2021)(SOURCE:AIRBUS)

780 1520 2310

13040

2660 910

3610 5410

29130

2180

Large wide-body Medium wide-body Small wide-body Single aisle Regional jets 2012

2032

36%

21% 21%

8% 8%

3% 3% Asia Pacific

12.820 units

North America 7.250 units Europe

7.250 units Middle East

2.610 units

Latin America 2.900 units

C.I.S 1.170 units

Africa 1.070 units

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IRLINES

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YPE

According to several articles related with the industry, outsourcing is playing a major role in Airline cost reduction policies. Already in the late 90s, the consequences of airline deregulation in the US were stated in a paper titled “Outsourcing as an Airline Strategy”. Although Pilot Crew was considered to be one of the most unlikely services to be outsourced by that time, the evidences had gone beyond expectations pilot outsourcing is becoming a more and more used practice.

Low Cost Carriers

Thanks to economic liberalization, low cost carriers’ entry in the market was easier. Newcomers had the opportunity to take up new market opportunities away from the threat of existing operators. During the initial period, other drivers of LCC entry were: the emergence of new markets, a progressive technological environment, transparent internet distribution, low priced fuels, relatively cheap B737 and A320 aircraft, etc. The regions having the highest LCC market penetration are represented in Figure 9.

FIGURE 9:LOW COST-CARRIERS PENETRATION (2001-2009)(SOURCE:CENTRE FOR ASIA-PACIFIC AVIATION)

Moreover, according to Airbus World, LCC traffic share will increase a 5% in the following twenty years.

LCC are pioneers in the use of outsourced cockpit crew to operate their routes. According to a European commission report “Study on the effects of the implementation of the EU aviation common market on employment and working conditions in the Air Transport Sector over the period 1997/2010” the trend in the aviation industry is to outsource most of the activities traditionally performed by the airlines itself. This

0,7% 1,4% 3,9% 5,7% 7,1% 7,9% 9,9% 15,5% 21,7% 26,7% 27,4% 27,9% 30,7% 32,0% 33,6% 35,2% 36,1% 37,0% 40,2% 46,4%

0,0% 5,0% 10,0% 15,0% 20,0% 25,0% 30,0% 35,0% 40,0% 45,0% 50,0% North Africa

report considers Ryanair a clear example of this trend. Brookfield Aviation is the company which leases most of the flight crew to Ryanair, it is located in the UK and it was founded in 1993.

Nowadays, many LCC are following Ryanair tendency and have started to outsource part of their cockpit crew to cover new routes, peak demands, etc. Due to both the expected growth of those airlines and their willingness to outsource pilots, they could represent a group of potential customers for UP.

Regular Airlines

Considering regular airlines as the ones which are not Low Cost Carriers, the share of World traffic that these airlines covered in 2011 was 85%; in 2031, it is expected to be 80%.

Regular airlines are facing costs increments due to fuel price, high salaries of employees agreed when the company was in a better position, and so on.

The decrease in traffic share due to LCC pressure together with the need of reducing costs, are forcing regular airlines to make changes in order to be competitive in the market. Airlines are starting to follow LCC tendencies, which include the outsourcing of pilots.

Labour agreements in regular airlines have a restricted percentage for outsourcing pilots, sometimes a 0%. But some labour agreements have just finished, or are closed to, which have allowed airlines to start to outsource pilots in order to reduce costs. As an example, Air Europa: its labour agreement ended in July 2013 and it has outsourced pilots for work peaks.

Even with this situation, the percentage of outsourced pilots in regular airlines is not expected to be too high. The outsourcing of pilots is expected to be used mainly for work peaks.

Some examples of regular airlines per region are set below, including the total fleet:

Low Cost Carriers & Regular Carriers

A sample of both LCC and No LCC in each world region with its fleet volume is presented below: (they are airlines which are going to increase their fleet in the following years, what could mean an increase in the need of hired pilots in their pool)

North America

FIGURE 10:NORTH AMERICA

(53)

(50)

(73)

(190) Low Cost Carriers

Regular Carriers

(186)

(734)

Central and South America

FIGURE 11:CENTRAL &SOUTH AMERICA

Europe

FIGURE 12:EUROPE

Africa

FIGURE 13:AFRICA

(23)

(43) (40) Low Cost Carriers

(80)

(310)

(160)

Regular Carriers

(194)

(73)

(45)

(49)

(305) (70) (41)

(133) (55)

Low Cost Carriers Regular Carriers

Low Cost Carriers Regular Carriers

(9) (55)

(32)

Middle East

FIGURE 14:MIDDLE EAST

Asia Pacific

FIGURE 15:ASIA PACIFIC

TRADE UNIONS & ASSOCIATIONS

Pilot trade unions and associations, among others activities that are explained below, they represent and defend pilots’ interests. In the following years, those associations could be an entry barrier for UP because they have a big amount of power among the whole aviation sector and they are not in favour of cockpit crew leasing services.

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SSOCIATIONS

Two main associations have been analyzed, at international level and at national level.

(33)

Low Cost Carriers Regular Carriers

(23)

(13)

(108)

(20)

Low Cost Carriers Regular Carriers

(9)

(16)

(35) (108)

(85)

IFALPA (International Federation of Airline Pilots’ Associations)

At the international level, IFALPA (International Federation of Airline Pilot’s Associations) is the global voice of professional pilots by providing representation, services and support in order to promote the highest level of aviation safety worldwide. IFALPA represents more than 100.000 pilots over 100 countries.

COPAC - Association of Pilots of Commercial Aviation of Spain

The COPAC (Colegio Oficial de Pilotos de la Aviación Comercial) is a corporation with its own legal entity and plenty of capacity for its goals. It cooperates with the Spanish government through the “Ministerio de Fomento”.

The main working areas of COPAC are: Safety; Aircrafts, infrastructures and

environment; Helicopters; Training; General aviation and Aerial works. From all of them, most related working areas regarding to UP business idea, are:

Safety

COPAC works in all matters related to flight safety and human factors that are related with pilot operations. They are also investigating accidents and incidents to find the causes of them and to establish better processes in order to avoid them in the future. COPAC is also involved in issues related with airport safety.

Training

This area is focused on developing the knowledge level of Spanish pilots and bets on the inclusion of this knowledge in the scope of high education. It is taking responsibilities on courses, seminars, etc. focused on increasing the knowledge level among associated components, and on the requirements that they can have.

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NIONS

Trade Unions in Europe

At European level, two main Trade Unions have been analyzed: ECA, which is an association of main trade unions in Europe; and SEPLA, the trade union in Spain.

ECA (European Cockpit Association)

– ECA Members”). ECA was established when the Single European Aviation Market was created, because air transport was no longer a purely national domain.

European policies in all areas of aviation affects pilots in several aspects, such as safety, flight crew licensing, air operations, fair competition, international air traffic agreements, air traffic management, aircraft maintenance, employment conditions, etc. ECA strives to ensure safe and sustainable growth of the air transport industry across Europe.

SEPLA (Sindicato Español de Pilotos de Lineas Aereas)

SEPLA is the Pilot Trade Union in Spain. It is considered a strong lobby that faces all the legislative and corporative decisions against pilot’s interests. It is a professional institution with its own legal personality whose basic aim is

the exercise of trade union freedom referred to in Article 28.1 of the Spanish Constitution.

As it is stated in its website, the core activity of SEPLA is the establishment and maintenance of professional, labour and social environment. Also its development and continuous improvement ensuring flight safety, protection and assistance for all its members, keeping ethics and solidarity amongst themselves and other professionals, members of their own unions and associations, involved in flight activity throughout the world.

Almost half of the associated pilots are from Iberia. They are the most powerful and with more calling power of the union. The other half are working in other commercial airlines and in multiple sectors as cargo, post, aerial works, helicopters, aero taxis, ambulances, corporative jets, training, etc.

SEPLA has permanent contact with international civil aviation and air transportation associations such as IFALPA, ECA and OIP (Ibero-American Pilots). It also collaborates with the Spanish Pilots Association that focuses on the support and development of pilots’ professional interests, who work in a wide variety of sectors.

SEPLA Influence

SEPLA is holding the most complicated relationship between a company and its workers in Spain. That situation can give an idea of the strength of this workers union. During lasts 30 years SEPLA has hold, on average, one strike per year with a duration of about 4 days, that has even increased during the last 10 years, and that has cost to the companies hundreds of millions of Euros.

Future

The doubt that is in the air is how the situation will be after the expiration of many labour agreements. It is still to be seen how much of the actual power of SEPLA and other Trade unions will be kept after this change.

Trade Unions in Asia-Pacific

AVAILABILITY OF PILOTS

Based on the actual situation of the market, UP pilots can be provided by two sources: pilot schools and experienced pilots that are unemployed or looking for a better job. In this section is presented an overview of them.

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ILOTS

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CHOOLS

In Europe, studies to become a pilot are regulated by JAR-FCL, which sets: minimum requirements that all students must meet; requirements that schools have to meet; and the different contents that all courses must include.

According to the Garofali ranking, (Annex “Sector Analysis – Ranking Garofali”) commercial aeronautical training in Europe has had a very positive development, having a very varied and interesting offer. Europe has a good quality and quantity level in aviation schools, so this area will be a good source of pilots in order to fulfil the customer requirements.

FIGURE 16:LOCATION OF RANKED SCHOOLS.(SOURCE:GAROFALI STUDY)