Strategic workforce planning and skills management in the aviation industry

In 2024, the aviation industry showed a strong recovery from the downturns experienced during the COVID-19 pandemic, with global passenger traffic returning to pre-pandemic levels and airlines achieving significant profitability.

The International Air Transport Association (IATA) reported that as of February 2024, earned passenger kilometers (RPKs) were on par with 2019, with an expected 11.6% increase in total RPKs and a 10.4% increase in global passenger numbers for the year. Airlines are expected to generate over $25.7 billion in net profits in 2025, on a historically high revenue of $964 billion.

The expectations are very promising, but has the aviation labor market changed? Let’s find out.

Significant labor market challenges have accompanied the aviation industry’s recovery. The pandemic has led to significant workforce reductions: the aviation industry has lost more than 2.3 million jobs since 2019, a 21% decline from pre-pandemic levels. As demand has recovered, airlines and airports have faced severe labor shortages, leading to flight cancellations and disruptions. The shortages span a variety of roles, including pilots, cabin crew, ground staff, and technicians.

Our 2022 research indicated that the aviation industry is experiencing significant labor shortages, especially in positions such as pilots, cabin crew, and ground staff.

In 2024, the industry is seeing a surge in labor strikes and demands for better compensation. For example, in November 2024, Alaska Airlines flight attendants rejected a contract that offered a 32% pay increase over three years, demanding more substantial improvements, including boarding pay. Similarly, in September 2024, Boeing faced a major labor strike, leading to the announcement of 17,000 job cuts and delays in aircraft deliveries.

This labor shortage has also affected aircraft production. Despite a record number of orders, Airbus has been unable to meet its delivery targets due to supply chain disruptions, engine delivery delays, and labor shortages.

The maintenance, repair, and overhaul (MRO) sector has been similarly affected, struggling with labor and materials cost inflation and supply chain issues, with costs expected to reach a record $104 billion in 2024.

Once a reliable source of commercial pilots, ex-military personnel are less available today due to the military’s increasing reliance on drones. According to the Aviation Job Search, critical positions such as airworthiness engineers and other engineering roles are also in high demand. Moreover, airlines need help recruiting cabin crew to support growing passenger loads.

Why this shortage is affecting the aviation industry

As passenger traffic grows up 6% year-over-year in the U.S. as of May 2024, there are too many planes and insufficient people to fly or maintain them. China’s airline industry expansion, fueled by domestic manufacturer COMAC’s new aircraft, the C919, adds to the demand for skilled aviation professionals. The competition for talent is heating up, creating a global movement of pilots, engineers, and ground staff between regions.

The world will need 585,000 new pilots by 2041, but the supply needs to catch up. In the U.S. alone, the aviation sector is short of 24,000 workers, and this gap will probably grow. Moreover, the aviation industry faces significant financial challenges, particularly in workforce training. In the USA, FAA-certified maintenance training costs around $40,000; in the UK, becoming a pilot costs £70,000–£130,000—far exceeding the £27,750 cost of a typical university degree.

To tackle this, initiatives like Boeing’s $950,000 fund for flight training scholarships in 2023 and Delta Airlines’ financial aid for disadvantaged candidates made training more accessible. Governments, such as the U.S. Congress, are also contributing, with $13.5 million recently allocated to aviation training schools.

Among the main automation challenges are:

• Reskilling the workforce. Training programs should focus on preparing a versatile workforce to adapt to rapidly changing technologies.
• Workforce transformation through organizational modeling. There is a need for agile models that ensure efficiency and are manageable for their teams.

Demand for air travel has reached unprecedented heights, with 2.7 billion passengers expected to fly in 2025 (Airports Council International). Air freight, already accounting for 35% of world trade by value, is projected to rise to 5% by 2027 as e-commerce expands and maritime disruptions persist. The pressure is on both in the skies and on the ground.

Automation has emerged as the aviation industry’s compass to navigate this surge. From next-generation AI chips to radiopharmaceuticals, high-value goods increasingly rely on air freight. Meanwhile, according to Airbus, 42,000 new planes will be in demand in the next 20 years to meet growth. However, workforce shortages threaten to clip these ambitions.

Boeing forecasts a need for 2.3 million new aviation workforce over the next two decades, a daunting figure when the U.S. alone faces a deficit of 24,000 workers.

In the aviation industry, ensuring the right people are available at the right time is as essential as maintaining the aircraft itself. Strategic workforce planning enables airlines to anticipate and manage workforce needs, ensuring smooth operations and an exceptional customer experience. Using the examples of Lufthansa and Southwest Airlines, let’s explore the practical strategies and technologies that make them possible.

Airlines operate in a dynamic environment where workforce needs can change rapidly due to fleet expansion, market shifts, or unexpected disruptions. Workforce modeling provides a data-driven foundation for:

• Simulating workforce demand. Analyze cabin crew and technician needs in sync with your fleet development plans. For instance, if a new fleet is expected to be operational within two years, simulations can project the exact number of technicians and crew required to maintain efficiency.
• Identifying shortages. Understand where talent gaps will emerge and proactively design sourcing strategies. Lufthansa, for example, uses labor market insights and competitor analysis to address critical shortages before they disrupt operations.
• Locating talent hubs. Use data to determine optimal locations for sourcing and establishing workforce hubs, such as IT development centers or cabin crew recruitment sites. Southwest Airlines, a pioneer in talent location flexibility, successfully uses these insights to source critical skills in diverse geographies.

Efficiency gains are crucial for cost control in aviation. Strategic planning incorporates:

• Automation potential analysis

Identify roles where automation can supplement workforce efforts, allowing talent to focus on high-value tasks. For example, Southwest Airlines successfully analyzed the potential of automation to enhance airport operations and customer service.

• Adjacent skills analysis

When critical roles are hard to fill, adjacent skills strategies explore alternative talent sources. For instance, cabin crew with customer service backgrounds in hospitality can be upskilled for aviation roles.

Workforce simulations, market insights, and automation potential can be core factors for airlines to address workforce shortages, improve efficiency, and ensure their planes and businesses keep soaring.

The importance of STEM-skills

From predictive maintenance to flight optimization, the industry requires aerospace engineers, data analysts, software developers, and cybersecurity experts. These professionals are critical for designing, managing, and protecting the digital infrastructure driving aviation’s future.

The STEM skills shortage poses a serious challenge as the supply of skilled talent needs to catch up with growing demand. Addressing this gap can ensure that the industry can keep up with technological advances, improve efficiency, and remain competitive in a global marketplace increasingly dependent on automation and innovation.

Let’s expand the use case with location a bit more because whether you’re establishing an IT hub or sourcing talent for in-flight services, data-driven location planning is the key to success.

Smart location decisions means using detailed labor market data and interpreting it into strategies. By aligning skills availability, operational costs, and competitor activity, you can refine your strategy and position your organization for long-term success.

Core benefits of strategic location planning

• Reveal where skills are most prevalent to meet your hiring needs
• Identify low-cost regions for maximizing operational efficiency
• Understand competitor activity to seize opportunities in emerging markets.

TalentNeuron offers workforce insights by analyzing job demand, workforce supply, and salaries through real-time data and country-specific models. It categorizes remote work, tracks diversity where permitted, and provides higher education demographics. Additionally, it evaluates Employee Value Proposition (EVP) across work settings, growth, rewards, culture, and people using data from over a million daily job postings.

Competitor benchmarking is the key to identifying gaps, leveraging opportunities, and aligning strategies with market demands.

Benchmarking technologies, skills, and employer branding

For example, Siemens benchmarked their workforce strategies against competitors to uncover future trends and adapt to shifting market demands. Same you, using market intelligence tools, businesses can analyze competitors’ technology adoption, skills requirements, and employer branding strategies to position themselves more effectively.

If you’re wondering whether:

• You are leading in future skills, geographic footprint, and cost footprint against competitors
• How to build a future job architecture with state-of-the-art jobs and the latest skills
• How to improve hiring efficiency by knowing the best location for availability and cost
• How to save money by hiring in the right locations and paying adequately.

Marketing intelligence, with which you gain a deep understanding of your organization’s competitive position.

Managing skills effectively helps your organization ensure workforce readiness for future business requirements. According to HRForecast’s report on skills management challenges and solutions, organizations often struggle to identify skill gaps, align employee development with business goals, and adapt to rapidly changing requirements. A robust skills management strategy can address these challenges while unlocking innovation and boosting operational safety.

Among the strategies to excel in skills management, we’d mention:

• Transparency and upskilling opportunities

Achieving visibility into workforce skills is essential. For example, skills transparency highlights how companies can match current competencies to future requirements. This transparency enables targeted upskilling initiatives, driving both individual and organizational growth.

The development of comprehensive skills taxonomies is revolutionizing workforce planning. With over 40,000 skills identified, TalentNeuron’s skills taxonomy sets a new standard for organizations striving to align workforce capabilities with future demands.

• Adopt a skills-based approach

Shifting to a skills-first mindset is essential for competitive advantage. HRForecast’s guide to a skills-based approach emphasizes the importance of aligning hiring, training, and compensation with skills rather than roles, allowing for flexibility and adaptability.

For example, Lufthansa underscored the power of a structured skills management platform. Using its CanDo platform, the company implemented a skills-first approach to engage employees and identify development opportunities. This initiative enhanced operational safety and positioned Lufthansa for sustainable innovation.

• Utilize AI-powered assessments

The Detecon case study showcases how AI-driven assessments can identify critical skills gaps while minimizing bias. This scalable solution supports data-driven decision-making and accelerates workforce transformation.