Ochre Insider
21st Dec 2005, 07:25
Recently, for a variety of reasons (one of which is undoubtedly that I have no life), I have been paying attention to various media pronouncements and other anecdotal evidence in relation to the ageing population. Depending on how you view such matters, I have gleaned several very interesting facts.
First, it was recently reported that the number of school and university leavers enterning the workforce in 2006 was around 180,000. On current projections, by the year 2020, that will decline to less than 15,000! I encourage you to read that again, and digest it, slowly.
Second, I was also recently in a discussion with a friend whose employment is largely dependent on the nature of such demographics. He informed me that whilst there is still mild growth in the 15-19 year old demographic for the next 4 years, the drop off in the 4 years following is extraordinary. We're talking about a decline of about 40%. And this is not a problem that can be solved quickly.
So what are the implications for the economy? This week the Reserve Bank has stated upward pressure on interest rates are beginning to occur because labour market shortages are placing upward pressure on wages. In short, there are not enough nurses, not enough suitable candidates for the military, not enough doctors, not enough mining industry employees, not enough tradespeople, etc. It seems virtually every occupation is feeling the pinch. In fact, one of this week's editions of the Fin Review had a front page headline that screamed "Millionaire Tradesman". The message is that these formerly unheralded occupations are now reaping the rewards of supply falling far short of demand.
And how about our industry? It is no secret that pilot shortages are acute worldwide, with the notable exception of certain Western Democracies. The USA is flush with pilots. So too, it is suggested, is Australia. But there is increasing evidence that the Australian airlines have vast distinction between candidates and SUITABLE candidates, and this is dramatically affecting the supply side imbalance.
The current decline in pilot training numbers is not exactly a surprise. Quite frankly, who is going to fork out tens of thousands of dollars for a qualification that in many cases has you less rewarded than a train driver, or of course a tradesman? Rumours are circulating that Qantas are concerned at this development, and the word is the hitherto strict entry requirements will soon be lowered in order to allow supply to meet demand. Further, it is rumoured Jetstar are concerned their recruiting net is no longer throwing up the number of suitable candidates required to satisfy their expansion. And in the case of the regionals there can be no doubt - last week Rex had to advertise for pilots in The Australian.
This week we've had the Eastern Pilots reject an EBA, despite management scare tactics. We've also had the Jetstar Pilot Group walk away from Jetstar International negotiations, again despite management scare tactics. We're led to believe that large numbers of Australian pilots are waiting to return home to work for substandard pay and conditions. Ask yourself, if that were the case why would they bother negotiating with the current Jetstar, Qantas or any other pilots for that matter? Emirates plan to double their fleet by 2012, and their fleet expansion includes 45 A380's. Can you really see them letting a large bunch of experienced Aussies walk without a fight? The cost of pilots is nothing compared to shiny new aircraft parked up against a fence.
My point is that things are starting to work in our favour. Jetstar have ordered the 787 so there is no group of endorsed and experienced pilots ready to step into the pointy end. A 2008 delivery target means they need to settle the crewing of the airline and commence the project fast. To Jetstar pilots, please do not sell yourself short on Jetstar International. Do not fall for the scare tactics. Management do not really have a credible cut price option. Hold out for something decent and the threat of aircraft arriving with nobody qualified to crew them will ensure they eventually come to the party.
You had no choice last time, and nobody could blame you for yielding. They threatened your jobs, your family and your livelihood. But the tide has turned. As I said, if they really had another option they wouldn't even bother negotiating. Don't fall for the scare tactics. You now hold the aces. Use them wisely.
OI
First, it was recently reported that the number of school and university leavers enterning the workforce in 2006 was around 180,000. On current projections, by the year 2020, that will decline to less than 15,000! I encourage you to read that again, and digest it, slowly.
Second, I was also recently in a discussion with a friend whose employment is largely dependent on the nature of such demographics. He informed me that whilst there is still mild growth in the 15-19 year old demographic for the next 4 years, the drop off in the 4 years following is extraordinary. We're talking about a decline of about 40%. And this is not a problem that can be solved quickly.
So what are the implications for the economy? This week the Reserve Bank has stated upward pressure on interest rates are beginning to occur because labour market shortages are placing upward pressure on wages. In short, there are not enough nurses, not enough suitable candidates for the military, not enough doctors, not enough mining industry employees, not enough tradespeople, etc. It seems virtually every occupation is feeling the pinch. In fact, one of this week's editions of the Fin Review had a front page headline that screamed "Millionaire Tradesman". The message is that these formerly unheralded occupations are now reaping the rewards of supply falling far short of demand.
And how about our industry? It is no secret that pilot shortages are acute worldwide, with the notable exception of certain Western Democracies. The USA is flush with pilots. So too, it is suggested, is Australia. But there is increasing evidence that the Australian airlines have vast distinction between candidates and SUITABLE candidates, and this is dramatically affecting the supply side imbalance.
The current decline in pilot training numbers is not exactly a surprise. Quite frankly, who is going to fork out tens of thousands of dollars for a qualification that in many cases has you less rewarded than a train driver, or of course a tradesman? Rumours are circulating that Qantas are concerned at this development, and the word is the hitherto strict entry requirements will soon be lowered in order to allow supply to meet demand. Further, it is rumoured Jetstar are concerned their recruiting net is no longer throwing up the number of suitable candidates required to satisfy their expansion. And in the case of the regionals there can be no doubt - last week Rex had to advertise for pilots in The Australian.
This week we've had the Eastern Pilots reject an EBA, despite management scare tactics. We've also had the Jetstar Pilot Group walk away from Jetstar International negotiations, again despite management scare tactics. We're led to believe that large numbers of Australian pilots are waiting to return home to work for substandard pay and conditions. Ask yourself, if that were the case why would they bother negotiating with the current Jetstar, Qantas or any other pilots for that matter? Emirates plan to double their fleet by 2012, and their fleet expansion includes 45 A380's. Can you really see them letting a large bunch of experienced Aussies walk without a fight? The cost of pilots is nothing compared to shiny new aircraft parked up against a fence.
My point is that things are starting to work in our favour. Jetstar have ordered the 787 so there is no group of endorsed and experienced pilots ready to step into the pointy end. A 2008 delivery target means they need to settle the crewing of the airline and commence the project fast. To Jetstar pilots, please do not sell yourself short on Jetstar International. Do not fall for the scare tactics. Management do not really have a credible cut price option. Hold out for something decent and the threat of aircraft arriving with nobody qualified to crew them will ensure they eventually come to the party.
You had no choice last time, and nobody could blame you for yielding. They threatened your jobs, your family and your livelihood. But the tide has turned. As I said, if they really had another option they wouldn't even bother negotiating. Don't fall for the scare tactics. You now hold the aces. Use them wisely.
OI