A PROFILE OF THE AVIATION SECTOR - ServiceIQ · The New Zealand aviation sector was somewhat insulated from the recession by soaring growth in China and Australia avoiding recession,

A PROFILE OF THE

AVIATION SECTOR

IN NEW ZEALAND

2014

for ServiceIQ

Authorship

This report has been prepared by:

Andrew Whiteford (Senior Analyst), Dirk van Seventer (Senior Economist) and Benje Patterson (Economist) of Infometrics.

All work and services rendered are at the request of, and for the purposes of ServiceIQ only. Neither Infometrics nor any of its employees accepts any responsibility on any grounds whatsoever, including negligence, to any other person or organisation. While every effort is made by Infometrics to ensure that the information, opinions, and forecasts are accurate and reliable, Infometrics shall not be liable for any adverse consequences of the client’s decisions made in reliance of any report provided by Infometrics, nor shall Infometrics be held to have given or implied any warranty as to whether any report provided by Infometrics will assist in the performance of the client’s functions.

This report is one of 11 Sector Profile Reports that ServiceIQ has developed about the 11 sectors in our gazetted coverage area. These reports aim to give an overview of each sector with a focus on economic contribution, characteristics of the workforce, skills and training, opportunities and challenges facing the sector and projections of economic contribution and employment over the next five years. They will be used to inform ServiceIQ’s industry and sector advisory groups and as an input into ServiceIQ’s Service Sector Workforce Development Plan.

The Sector Profile Reports were prepared by Infometrics using data from official sources including the 2006 and 2013 Census, Business Demography, and GDP and modelling based on Infometrics’ Regional Industry Occupation Model. These data sources were supplemented with desk research and qualitative information where available.

These reports should be considered alongside other pieces of work including detailed research on an individual sector, government strategies, and in-depth sector knowledge.

ServiceIQ anticipates updating these profiles on an annual basis and would like to include an increasing amount of sector-specific information as we become aware of it and as more is available.

For further information about the Sector Profile Reports, please contact:

Jenny Connor Industry Skills and Research Manager

Andrew Whiteford Senior Analyst

ServiceIQ [email protected] [email protected]

© ServiceIQ All rights reserved.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form, or by any means including electronic, mechanical, photocopying, recording or otherwise, without the prior permission of ServiceIQ.

Industry profile: Aviation sector

1

Table of contents Key highlights ...................................................................................................... 3

Unique characteristics ......................................................................................... 3

Training ............................................................................................................... 4

Sector outlook ..................................................................................................... 4

1. INTRODUCTION .......................................................... 5

Defining the aviation sector................................................................................. 5

2. SECTOR PROFILE ........................................................ 7

Employment trends to 2012 ................................................................................ 7

Occupations ........................................................................................................ 9

Business units ................................................................................................... 10

Size of businesses ............................................................................................ 12

Geography ........................................................................................................ 12

Economic contribution ....................................................................................... 13

Other indicators: domestic passenger numbers ............................................... 14

3. INDUSTRY OUTLOOK .................................................16

Outlook for the New Zealand economy ............................................................ 16

Outlook for the aviation sector .......................................................................... 17

Sector outlook .......................................................................................... 17

Occupation outlook .................................................................................. 18

4. OPPORTUNITIES AND CHALLENGES ..........................20

Overview of outlook and background ............................................................... 20

Rising domestic passenger numbers to support aviation sector ............. 20

International flights have a smaller effect on local employment .............. 20

New generation aircraft reduce engineering requirements ...................... 20

Oil price rises to be contained .................................................................. 21

Evolving in an online market place .......................................................... 21

5. DEMOGRAPHICS .......................................................22

Age .................................................................................................................... 22

Gender .............................................................................................................. 23

Highest qualification .......................................................................................... 25

Ethnicity............................................................................................................. 27

Country of birth ................................................................................................. 29

Hours worked .................................................................................................... 31

6. TRAINING ..................................................................33

Age .................................................................................................................... 33

Gender .............................................................................................................. 35

Ethnicity............................................................................................................. 36


2

Level of study .................................................................................................... 37

Region ............................................................................................................... 38

Domain .............................................................................................................. 39

Provider-based training ..................................................................................... 39

7. APPENDIX A. METHODOLOGY ...................................40

Definitions of key industries and occupations ................................................... 40

Measuring employment in the aviation sector .................................................. 41

Measuring demographic characteristics of sectors .......................................... 41

Methodology for estimating net demand replacement ...................................... 42

Infometrics Regional Industry Employment Model ........................................... 43

Output and employment forecasts by industry ................................................. 43


3

Executive summary

Key highlights Approximately 18,400 people (or 16,880 FTEs) were employed in the aviation sector in 2012. This was down from a peak of 18,685 in 2011, a decline of 1.6%. The aviation sector performed relatively well during the recession following the Global Financial Crisis. The New Zealand aviation sector was somewhat insulated from the recession by soaring growth in China and Australia avoiding recession, which helped push up international visitors to New Zealand. Domestically, the sector did quite well because of the entry of Jetstar, and the massive boost to capacity and downward pressure on prices on domestic routes.

The aviation sector had nearly 1,300 business units in 2013, up from 1,000 ten years ago. Business growth was faster than in the national economy.

The aviation sector contributed $2,177 million (in 2010 prices) to New Zealand’s gross domestic product in 2012. This amounted to 1.1% of national GDP. Over the ten years to 2012 GDP in the aviation sector increased by 3.7% per annum compared with 2.3% in the national economy. In 2012 GDP per FTE in the aviation sector was about a fifth higher than in the national economy.

Table 1. Summary indicators for aviation sector

Unique characteristics The aviation sector has a lower proportion of both younger (15-24 years) and older (55 years+) workers than the national economy.

Male workers predominate in the aviation sector, accounting for nearly 63% of workers. In the national economy males account for 52% of workers. Over the past seven years, the male to female ratio in the industry has remained relatively unchanged.

Europeans have a higher representation in the aviation sector than in the national economy. They account for 79.3% of workers in the aviation sector compared with 77% in the national economy. Pasifika also have a higher representation,

Aviation New Zealand

Number in 2012 18,391 2,199,074

% growth 2002-2012 2.8% 1.3%

Number in 2012 16,880 1,871,104

% growth 2002-2012 2.7% 1.3%

Number in 2013 1,276 507,908

% growth 2003-2013 2.1% 1.8%

Number in 2012 $2,177 $199,966

% growth 2002-2012 3.7% 2.3%

Number in 2012 $128,983 $106,871

% growth 2002-2012 1.0% 0.9%

Source: Statistics NZ and Infometrics

Jobs

FTEs

Businesses

GDP ($ million)

GDP per FTE


4

accounting for 7.3% in aviation compared with 5% in the national economy. Māori are underrepresented (7.3% and 11.2% respectively).

About two thirds (66.5%) of employees in the aviation sector had post-school qualifications in 2013. This was a significantly higher proportion than in the national economy (56.6%). The number of workers with a degree or higher increased from 13.5% to 16.1% over the seven year period.

In the aviation sector, 72% of workers are employed for between 30 and 50 hours per week, whereas 57% of workers work the same hours across all sectors. A relatively low proportion of workers have part-time or very long hours in the aviation sector.

Training ServiceIQ had 2,094 aviation sector trainees at some point in 2013, which accounted for 9.7% of all ServiceIQ trainees.

The majority (56.1%), of trainees in the aviation sector are studying towards level 4 qualifications. By contrast, 13.0% of trainees across the whole of ServiceIQ are studying for level 4 qualifications. More than 70% of trainees in the aviation sector are studying at level 4 and above.

Māori comprise 4.9% and Pasifika 7.0% of trainees in the aviation sector.

Sector outlook Employment in the aviation sector is forecast to rise moderately over the forecast horizon, from current levels of around 18,000 to just over 20,000 by 2017. Driving this lift in employment will be a rising volume of international and domestic flight movements.

The largest benefactors from increased flight movements will be aeroplane pilots and flight attendants. Higher passenger numbers will also place additional demand on baggage handlers and ground crew, while there will also likely to be a lift in the number of air traffic controllers employed.

However, even with these rising levels of aviation activity, there will still be some aspects of aviation employment that may not fare as well. For example, employment levels of travel consultants are less certain as a range of booking channels, particularly online, continue to grow strongly. While this may reduce the number of travel agents, it also means airlines will need people who have the skills to move between different channels and make more complex travel arrangements.

While there is a potential for the demand for aviation engineers to decrease due to changing fleets, retirements coupled with need to maintain services from a geographical location means that overall the demand is likely to remain fairly stage. With the new technology, a greater focus will be towards multi skilled engineers with a blurring of the traditional borders between Avionics and mechanical task. We are likely to also see a greater focus on the integration of back of house support services and technical personal thought the use of mobile or digital technology. This means the recruitment and training programmes will need to look for different skill sets to what they have in the past.


5

1. INTRODUCTION

This report presents a profile of the aviation sector. It describes trends in employment, the basic characteristics of the sector and its employees, and the characteristics of its trainees and learners. It also provides an insight into the future and presents forecasts of employment growth.

Unless otherwise stated this report presents data for calendar years.

Defining the aviation sector Official employment data sources are typically divided by either industry or occupation, but by themselves, neither is satisfactory for defining the ServiceIQ sectors. For example, if we defined the aviation sector purely in terms of aviation related industries such as air transport services we may not capture pilots who work in the agricultural support services doing aerial spraying. We have consequently used a combination of industries and occupations to define each of the ServiceIQ sectors.

Further details of this approach are provided in the appendix.

In this study we have defined the aviation sector as follows:

1. Persons employed in all occupations in the following industries:

Aircraft Manufacturing and Repair Services (code C239400 in the 2006

Australia New Zealand Standard Industrial Classification)

Air and Space Transport (I490000)

Airport Operations and Other Air Transport Support Services (I522000)

2. Persons employed in all industries in the following occupations:

Aeroplane Pilot (code 231111 in the Australia New Zealand Standard

Classification of Occupations)

Air Traffic Controller (231112)

Flying Instructor (231113)

Helicopter Pilot (231114)

Air Transport Professionals n.e.c. (231199)

Aircraft Maintenance Engineer, Avionics (323111)

Aircraft Maintenance Engineer, Mechanical (323112)

Aircraft Maintenance Engineer, Structures (323113)

Flight Attendant (451711)

Definitions of these occupations and industries are provided in the Appendix.

This definition has been chosen as it is the group of industries and occupations that most closely align with the ServiceIQ gazetted coverage of the aviation sector. The


6

gazetted coverage of the aviation sector includes: “aeronautical engineering; aircraft operation - including pilots, cabin crew, and aircrew; safety management; air traffic services; airline and airport operations; customer check-in; air cargo; and aviation ground support operations.”


7

2. SECTOR PROFILE

Employment trends to 2012 Approximately 18,400 people were employed in the aviation sector in 2012. This was down from a peak of 18,685 in 2011, a decline of 1.6%. The sector performed relatively well during the recession following the Global Financial Crisis. The sector was somewhat insulated from the recession by soaring growth in China and Australia avoiding recession, which helped push up international visitors to New Zealand. Domestically, the sector did quite well because of the entry of Jetstar, and the massive boost to capacity and domestic passenger numbers by both Jetstar and Air New Zealand on domestic routes.

Air New Zealand was one of the best performing airlines during the recession. The company adjusted global capacity globally quickly and streamlined themselves to maintain profitability. As a consequence they did not incur many job losses.

An outlook for the sector is provided in the section Outlook for the aviation sector on page 17.

Table 2. Total employment in the aviation sector, 2001-2012

FTEs Jobs Change Jobs Change

2001 12,682 13,682 1,862,895

2002 12,978 14,017 2.4% 1,923,798 3.3%

2003 13,639 14,744 5.2% 1,979,437 2.9%

2004 14,324 15,493 5.1% 2,039,390 3.0%

2005 15,190 16,430 6.1% 2,108,155 3.4%

2006 15,240 16,504 0.4% 2,142,486 1.6%

2007 15,475 16,777 1.7% 2,184,802 2.0%

2008 16,272 17,658 5.3% 2,219,403 1.6%

2009 17,008 18,478 4.6% 2,167,989 -2.3%

2010 16,895 18,375 -0.6% 2,160,647 -0.3%

2011 17,167 18,685 1.7% 2,180,241 0.9%

2012 16,880 18,391 -1.6% 2,199,074 0.9%

2002-2012 2.8% 1.3% Source: Statistics NZ and Infometrics

New ZealandYear

Aviation


8

Figure 1. Total employment in the aviation sector, 2001 to 2012


0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

New Zealand Aviation


9

Occupations This section examines the growth in occupations in the aviation sector. By drawing on data from the population census it is possible to split out employment in the sector to approximately 1,000 detailed occupational categories. In this section we report on an aggregation of those categories into eight broad categories as well as the numerically largest detailed occupations.

Table 3 shows employment by broad occupations. Professionals are the largest occupational category in the aviation sector, accounting for almost 30% of employment in 2012. Over the ten years to 2012, there has been a lift across all broad occupation categories in the aviation sector. In absolute terms the professional category experienced the largest increase in employment.

Table 3. Employment by broad occupation1

Figure 2. Employment by broad occupation, 2002 and 2012

1 This table shows change in employment between 2002 and 2012. Change is measured in per annum terms. The change in number of jobs per annum between 2002 and 2012 is equal to the difference between the value in 2012 and 2002 divided by 10.

% of total

2002 2012 Jobs % 2012

Managers 1,009 1,922 91 6.7% 10.4%

Professionals 3,522 5,375 185 4.3% 29.2%

Technicians & Trades Workers 3,558 3,749 19 0.5% 20.4%

Community & Personal Service Workers 2,471 3,090 62 2.3% 16.8%

Clerical & Administrative Workers 1,234 1,427 19 1.5% 7.8%

Sales Workers 1,097 1,452 36 2.9% 7.9%

Machinery Operators & Drivers 787 929 14 1.7% 5.1%

Labourers 339 448 11 2.8% 2.4%

Total 14,017 18,391 437 2.8% 100.0%


Employment Change 2002 - 2012 paOccupation


0 2000 4000 6000

Labourers

Machinery Operators & Drivers

Sales Workers

Clerical & Administrative…

Community & Personal Service…

Technicians & Trades Workers

Professionals

Managers

2002

2012


10

Table 4 shows employment in the 20 numerically largest occupations in the sector. The largest occupations are aircraft maintenance engineer (mechanical) and flight attendant which account for 14.8% and 9.5% of employment in the sector, respectively. Collectively the top 20 occupations account for 57.3% of total employment in the sector.

Table 4. Employment of top 20 occupations in aviation sector

Business units There were almost 1,300 business units in the aviation sector in 2013. Figure 3 shows that the number of business units in the sector grew rapidly between 2002 and 2008 and then levelled off in 2009 before declining to a stable level in 2010. The number of business units in the aviation sector grew more quickly (2.1%) over the 10 years to 2013 than those in the national economy (1.8%), which is in line with the overall performance of the sector.

During tough economic times there is usually a consolidation of businesses as those struggling get absorbed by stronger businesses. As the economy gains momentum over the next few years we expect new enterprises to emerge in the aviation sector as individuals are prepared to make new investments in a recovering industry.

2002 2012 Number %

Aircraft Maintenance Engineer (Mechanical) 2,730 2,497 14.8% -23 -0.9%

Flight Attendant 1,739 2,255 9.5% 52 2.6%

Aeroplane Pilot 1,561 2,340 8.5% 78 4.1%

Ticket Seller 571 371 3.1% -20 -4.2%

Air Traffic Controller 455 528 2.5% 7 1.5%

Travel Consultant 444 379 2.4% -6 -1.6%

Sales Representatives nec 431 886 2.3% 45 7.5%

Aircraft Baggage Handler and Airline Ground Crew 425 545 2.3% 12 2.5%

General Clerk 303 270 1.6% -3 -1.1%

Flying Instructor 288 476 1.6% 19 5.1%

Helicopter Pilot 251 389 1.4% 14 4.5%

Air Transport Professionals nec 221 351 1.2% 13 4.8%

Aircraft Maintenance Engineer (Avionics) 186 557 1.0% 37 11.6%

Aeronautical Engineer 150 208 0.8% 6 3.3%

Transport Company Manager 148 196 0.8% 5 2.9%

Storeperson 142 162 0.8% 2 1.3%

Electronic Engineering Technician 141 31 0.8% -11 -13.9%

Corporate General Manager 134 221 0.7% 9 5.1%

Mechanical Engineering Technician 112 89 0.6% -2 -2.3%

Accounts Clerk 98 100 0.5% 0 0.2%

Top 20 occupations 10,531 12,853 57.3% 232 2.0%


OccupationEmployment Change 2002 - 2012 pa% of total

employment,

2012


11

Figure 3. Number of business units in the aviation sector, 2000-2013

Table 5. Number of business units (as at February)

Source: Statistics NZ

0

200

400

600

800

1,000

1,200

1,400

1,600

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

2003 2013 Number %

Aviation 1,039 1,276 24 2.1%

New Zealand 426,829 507,908 8,108 1.8% Source: Statistics NZ

Change 02-12 pa


12

Size of businesses On average business units in the aviation sector are larger than in the national economy. Approximately 2.3% of business units in the sector had 100 or more employees in 2013, compared with 0.5% in the national economy. Airlines and national airports would account for the higher prevalence of large businesses. Employers with more than 100 employees account for about 72% of employment in the sector.

Table 6. Number of business units by number of employees

Geography Auckland is the region with the highest number of employees, accounting for 52.6% of employment in the aviation sector in 2012. This was followed by Canterbury (21.5%) and Wellington (7.0%). Over the 10 years to 2012, fastest growth was measured in Bay of Plenty (3.9%), Wellington (3.8%), and Northland (3.6%).

Table 7. Number of employees by region

Employment

Aviation New Zealand Aviation New Zealand Aviation

0-5 1,009 442,363 79.1% 87.1% 1,210

6 to 9 90 26,403 7.0% 5.2% 627

10 to 19 68 21,254 5.3% 4.2% 812

20 to 49 61 11,832 4.8% 2.3% 1,535

50 to 99 19 3,657 1.5% 0.7% 1,019

100 and Over 30 2,399 2.3% 0.5% 13,187

Total 1,276 507,908 100.0% 100.0% 18,391

Source: Statistics NZ

% of totalNumber

% of total FTE

Region 2002 2012 2012 2012 Number %

Auckland 7,017 9,674 52.6% 8,879 266 3.3%

Canterbury 2,950 3,962 21.5% 3,637 101 3.0%

Wellington 893 1,293 7.0% 1,187 40 3.8%

Tas-Nel-Marl 973 801 4.4% 735 -17 -1.9%

Waikato 527 630 3.4% 579 10 1.8%

Manawatu-Wanganui 430 525 2.9% 482 9 2.0%

Otago 391 454 2.5% 417 6 1.5%

Bay of Plenty 237 348 1.9% 319 11 3.9%

Gis-Hawke's Bay 239 269 1.5% 247 3 1.2%

Southland 117 139 0.8% 128 2 1.8%

Taranaki 104 131 0.7% 120 3 2.3%

Northland 71 101 0.6% 93 3 3.6%

West Coast 68 63 0.3% 58 0 -0.7%

New Zealand 14,017 18,391 100.0% 16,880 437 2.8%


Number Change 2002-2012 pa


13

Economic contribution The aviation sector contributed $2,177 million ($2.18 billion) to the New Zealand economy in 2012 (measured in 2010 prices2). This level is 2.2% higher than pre-Global Financial Crisis levels, which were at $1,284 million in 2007. Over the ten years to 2012, gross domestic product (GDP) in the sector grew by 3.7%pa compared with 2.3% in the economy as a whole. The sector accounted for 1.1% of national GDP in 2012.

Table 8. Contribution to GDP by the aviation sector (2001-2013)

2 In this profile, we present all GDP estimates in constant 2010 prices. GDP presented in constant prices is sometimes referred to as real GDP. By using constant prices we remove the distractionary effect of inflation. It enables us to meaningfully compare GDP from one year to the next. Our GDP estimates differ from those published by Statistics New Zealand which are at 1995/6 prices.

$ mill ion Change $ mill ion Change

2001 1,413 152,045

2002 1,510 6.9% 159,473 4.9%

2003 1,589 5.2% 166,488 4.4%

2004 1,775 11.7% 173,781 4.4%

2005 1,989 12.0% 178,428 2.7%

2006 1,932 -2.9% 182,439 2.2%

2007 2,129 10.2% 188,639 3.4%

2008 1,975 -7.2% 187,362 -0.7%

2009 1,858 -6.0% 188,588 0.7%

2010 2,077 11.8% 192,015 1.8%

2011 2,166 4.3% 194,322 1.2%

2012 2,177 0.5% 199,966 2.9%

2002-2012 3.7% 2.3% Source: Statistics NZ and Infometrics

YearAviation

New Zealand


14

Figure 4. Aviation sector GDP ($m)

Other indicators: domestic passenger numbers Annual domestic passenger numbers increased by 4.1% over the year to December 2013. Passenger numbers have grown rapidly over recent years, as domestic ticket prices have been contained by intense competition between the two domestic carriers, while flight availability has also improved.

Over the year to June 2010, there were around 9.2 million domestic passenger movements in New Zealand – 1.2 million of these movements were on Jetstar flights, while 8.0 million were on Air New Zealand flights. However, by December 2013, the annual running total of domestic passenger movements had reached 10.7 million.

This 16% growth in annual domestic passenger movements over the past 3.5 years was driven by a huge 57% growth in Jetstar passenger numbers, while the number flying with Air New Zealand rose a healthy 9.9% over the same period. Jetstar’s injection of competition into the New Zealand domestic air travel market has increased passenger movements and regional air connectivity by bringing affordable air travel within the budgets of a wider range of businesses and households.

Quantifying the economic effects of this improving air connectivity is difficult, but indicators of regional domestic spending behaviour do show that regions surrounding main-trunk airports (where Jetstar and Air New Zealand compete head-to-head 3) have seen rapid growth in retail, accommodation, and hospitality spending. According to MBIE’s regional tourism estimates, annual spending by domestic travellers (both business and leisure) rose rapidly in Auckland region, Wellington region, Canterbury, and Otago over the four years to March 2013 (up 6.0%, 20%, 9.6%, and 15% respectively). In comparison, spending by domestic visitors to other regions rose by a more sedate 4.2% over the same period. Data on domestic guest nights tells a similar story. Although regional connectivity may not

3 Main-trunk airports where both Jetstar and Air New Zealand operate domestic services are Auckland, Wellington, Christchurch, Dunedin, and Queenstown.


0

500

1,000

1,500

2,000

2,500

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012


15

have been the only factor driving these spending and aviation trends, the figures are at least consistent with the assertion that the tourism industry across regional New Zealand is a benefactor of the increased number of passenger movements.

Figure 5. Annual growth in domestic traveller spending by area

Source: Ministry of Business, Innovation and Employment

Figure 6. Domestic traveller spending by area

Source: Ministry of Business, Innovation and Employment

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Auckland Wellington Canterbuy Otago Non-main trunkroutes

2009

2013

-6.00%

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

2010 2011 2012 2013

Auckland Wellington Canterbury/Otago Non-main trunk routes


16

3. INDUSTRY OUTLOOK

Outlook for the New Zealand economy Economic growth in New Zealand is forecast to average 4.2% per annum (pa) over the two years to March 2016, as activity is supported by strong export incomes, rising construction activity, and healthy domestic confidence. Chinese and Australian economic growth rates are moderating, but demand for our primary exports will remain strong as household spending continues to grow in China. New Zealand’s strong economic performance over the next 2-3 years will be accompanied by:

higher net migration – climbing above 30,000pa by mid-2014 and remaining over 20,000pa as we head into 2015

good employment growth, driving the unemployment rate down to 5.0% by the end of 2015

accelerating wage growth, lifting to 3.5%pa by March 2016

rising interest rates, with the official cash rate reaching 5.00% by the beginning of 2016

the return of inflation over 2%pa, due to the strengthening domestic economy, costs associated with the Christchurch rebuild, and a gradual lift in import prices.

Economic growth is forecast to peak at 4.4%pa in March 2015, with growth moderating over the following two years as the stimulus from high export incomes fades, rebuilding activity in Canterbury reaches its peak level, and growth in the housing market and domestic economy slow in response to the rise in interest rates that has taken place.

Figure 7. New Zealand GDP growth forecast to 2017


1.8%

1.2%

2.9%2.7%

4.2%4.0%

3.6%

1.9%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

2010 2011 2012 2013 2014 2015 2016 2017

Forecast


17

Outlook for the aviation sector

Sector outlook

Employment in the aviation sector is forecast to rise moderately over the forecast horizon, with sector employment rising from current levels of around 18,000 to just over 20,000 by 2017. Driving this lift in employment will be a rising volume of international and domestic flight movements.

The largest benefactors from increased flight movements will be aeroplane pilots and flight attendants. Higher passenger numbers will also place additional demand on baggage handlers and ground crew, while there will also likely be a lift in the number of air traffic controllers employed.

However, even with these rising levels of aviation activity, there will still be some aspects of aviation employment that do not fare so well. For example, employment levels among ticket sellers and travel consultants will ease as online booking channels continue to grow strongly, particularly in the arena of smart phones.

Demand for mechanical aircraft maintenance engineers is expected to fall significantly over the forecast horizon, with the number employed in this occupation easing by an average of 2.0%pa over the five years to 2017. A key factor behind this fall is that airlines are introducing new aircraft into their fleets which require less frequent maintenance.

Table 9. Total employment in the aviation sector, 2012-2017

Level Change pa

2012 18,391 -1.6%

2013 18,111 -1.5%

2014 18,644 2.9%

2015 19,121 2.6%

2016 19,484 1.9%

2017 20,032 2.8%

2012-2017 1.7%


YearAviation


18

Figure 8. Total employment in the aviation sector, 2001-2017


Forecast

0

5,000

10,000

15,000

20,000

25,000Forecast

Occupation outlook

The tables below show forecast of employment by broad occupation and the 20 numerically largest detailed occupations in the aviation sector. In addition to new positions being created, positions will need filling due to replacement of existing staff as staff enter and leave occupations. The table below shows new jobs opening due to growth in employment, net positions opening due to replacement and total positions opening.

Net replacement demand is a method for estimating job openings by occupation arising from individuals leaving an occupation net of jobs taken by individuals re-entering the occupation. By netting out individuals re-entering an occupation, net replacement rates measures are a subset of more commonly cited labour turnover rates. Net replacement demand is the relevant measure for providing advice on education and training needs. Details about the method used to measure future net replacement demand are provided in the appendix.

Table 10. Forecast of employment by broad occupation, 2012-2017

2012 2017 New jobs %

Managers 1,922 2,267 69 3.4% 50 119

Professionals 5,375 6,096 144 2.5% 175 320

Technicians & Trades Workers 3,749 3,886 27 0.7% 151 179

Community & Personal Service Workers 3,090 3,211 24 0.8% 64 88

Clerical & Administrative Workers 1,427 1,555 26 1.7% 27 53

Sales Workers 1,452 1,456 1 0.0% 29 30

Machinery Operators & Drivers 929 1,043 23 2.4% 19 42

Labourers 448 517 14 2.9% 11 24

Total 18,391 20,032 328 1.7% 527 855


OccupationEmployment Change 2012 - 2017 pa Replace-

ment pa

Total

positions


19

Table 11. Forecast of employment for top 20 occupations.

The occupations with the largest number of positions opening over the five years to 2017 are aeroplane pilot (262 per year), flight attendant (164 per year) and aircraft maintenance engineer (avionics) (155 per year).

2012 2017 Jobs %

Aircraft Maintenance Engineer (Mechanical) 2,730 2,462 -54 -2.0% 79 25

Flight Attendant 1,739 2,349 122 6.2% 42 164

Aeroplane Pilot 1,561 2,578 203 10.6% 59 262

Ticket Seller 571 303 -54 -11.9% 13 -41

Air Traffic Controller 455 628 35 6.7% 36 71

Travel Consultant 444 352 -18 -4.5% 9 -9

Sales Representatives nec 431 933 101 16.7% 1 101

Aircraft Baggage Handler and Airline Ground Crew 425 614 38 7.6% 9 46

General Clerk 303 247 -11 -4.0% 4 -7

Flying Instructor 288 553 53 13.9% 9 62

Helicopter Pilot 251 441 38 11.9% 22 60

Air Transport Professionals nec 221 404 37 12.8% 4 40

Aircraft Maintenance Engineer (Avionics) 186 694 102 30.1% 53 155

Aeronautical Engineer 150 233 17 9.2% 15 32

Transport Company Manager 148 229 16 9.1% 9 25

Storeperson 142 177 7 4.4% 7 14

Electronic Engineering Technician 141 25 -23 -29.2% 1 -22

Corporate General Manager 134 261 25 14.2% 5 30

Mechanical Engineering Technician 112 80 -6 -6.5% 3 -3

Accounts Clerk 98 105 1 1.3% 1 3


OccupationEmployment Change 2012 - 2017 pa Net

replace-

ment pa

Total net

positions

opening pa


20

4. OPPORTUNITIES AND CHALLENGES

Overview of outlook and background Activity levels in the New Zealand aviation sector are expected to grow strongly over the coming decade. Not only will healthy economic growth and improving domestic air connectivity push up domestic flight movements, but rising inbound and outbound international tourism will lift international flight numbers. In this environment, there will be significant employment opportunities for operational-type roles. However, challenges for some parts of the industry will still exist as new generation aircraft enter the fleet and booking channels continue to evolve.

Rising domestic passenger numbers to support aviation sector

Annual domestic passenger numbers increased by 16% over the 3.5 years to December 2013, as intense competition between Air New Zealand and Jetstar kept flight prices subdued. Although passenger numbers are unlikely to grow at such a rapid rate over the coming decade, we still expect willingness to fly domestically to increase moderately, as domestic economic conditions continue to improve. Furthermore, the introduction of efficient new Airbus A320 and Aerospatiale ATR72 aircraft into Air New Zealand’s fleet, coupled with ongoing competition between the two major domestic airlines will ensure prices remain subdued. In this environment, demand for pilots, flight attendants, and support staff will be healthy.

Although our central view is that domestic competition will remain contained to main-trunk routes, there is always the potential of Jetstar (or another entrant) investing in turboprop capacity to compete on regional routes.

International flights have a smaller effect on local employment

International flight movements will grow significantly over the coming decade. Not only will increasing numbers of New Zealanders take holidays abroad, but the number of international visitors to New Zealand is also expected to continue climbing. Driving this uplift in international visitor numbers will be further growth in arrivals from China, South East Asia, and Australia, as well as a significant recovery to arrivals from North America, Europe, and Japan.

Rising numbers of international flight movements present more of an opportunity for New Zealand airports and support services, rather than for New Zealand-based pilots and flight attendants. The reason being that foreign airlines will be a key driver of the increasing flight numbers and these airlines will typically hire cheaper overseas-based flight staff. Nevertheless, Air New Zealand’s expansion to its long-haul fleet will still provide opportunities for New Zealand-based crew.

New generation aircraft reduce engineering requirements

During 2013, there were significant numbers of redundancies of aircraft engineers. The reason for these redundancies is the expectations that the introduction of new generation aircraft by Air New Zealand and other airlines will reduce maintenance requirements. Furthermore, the elevated New Zealand dollar is also undermining the competitiveness of New Zealand-based engineering facilities against cheaper options in Asia. These trends are likely to ensure that employment in the sector remains subdued over the coming decade. Nevertheless, advancements to avionics still provide opportunities for highly skilled avionic engineers.


21

Oil price rises to be contained

Oil prices are a significant input cost into the airline industry. However, the risk of a significant oil price shock over the coming decade is contained at present. Not only are new generation aircraft increasingly fuel efficient, but rising world oil production is likely to contain the upside to underlying fuel prices. The US Energy Information Administration has estimated that in the United States alone, annual crude oil production is expected to increase by around 50% between now and 2016, mainly due to the rising prevalence of fracking extraction techniques.

Evolving in an online market place

A key challenge for the airline industry will be ensuring that it continues to keep pace with the evolving nature of online travel sales. Although airlines have long offered online bookings, a significant proportion of bookings and interaction with passengers will shift to smart phone aps over the coming years. Supporting these services will be increasing numbers of IT professionals, management and marketing staff, while demand for sales staff and travel consultants is likely to ease.


22

5. DEMOGRAPHICS

This chapter describes the demographic characteristics of employees in the aviation sector. It draws heavily on the 2006 and 2013 population census.

Age The aviation sector has lower proportions of younger (15-24 years) and older (65 years +) workers than the national economy. The lower proportion of very young workers would be explained by the higher qualification requirements of aviation occupations. Many of the aviation occupations such as aircraft maintenance engineers and flight attendants are physically demanding and would be less appealing to older workers.

Table 12. Employment by 5-year age group in the aviation sector

Figure 9. Proportion of total employment by 5-year age group,


0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65+

Aviation

New Zealand

NZ % of Total

2006 2013 2006 2013 2013

15-19 352 252 2.1% 1.4% 4.8%

20-24 1,327 1,513 8.0% 8.3% 9.1%

25-29 1,663 1,752 10.0% 9.6% 9.1%

30-34 2,133 1,814 12.8% 10.0% 9.2%

35-39 2,193 1,990 13.2% 10.9% 9.9%

40-44 2,373 2,364 14.2% 13.0% 11.7%

45-49 2,233 2,287 13.4% 12.6% 11.8%

50-54 1,736 2,393 10.4% 13.2% 11.6%

55-59 1,501 1,714 9.0% 9.4% 9.5%

60-64 786 1,312 4.7% 7.2% 7.4%

65+ 372 789 2.2% 4.3% 5.9%

Total 16,669 18,181 100.0% 100.0% 100.0% Source: Statistics NZ and Infometrics

Employment % of TotalAge Group


23

The number of young employees aged between 15 and 19 almost halved between 2006 and 2013, which indicates that the sector took in fewer young recruits during the harder economic years between the censuses. On the other hand the number of older workers (aged 55 +) increased, suggesting that older workers held onto their jobs longer and took later retirement.

Figure 10. Employment by 5-year age group in the aviation sector


0

500

1,000

1,500

2,000

2,500

3,000

15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65+

2006

2013

Gender There were fewer female than male workers in the sector in 2013. Females accounted for only 32.7% of total employment. The share of female workers increased marginally from 32.5% to 32.7% between March 2006 and March 2013.

Table 13. Employment by gender in the aviation sector

NZ% of Total

2006 2013 2006 2013 2013

Female 5,419 5,937 32.5% 32.7% 47.1%

Male 11,251 12,244 67.5% 67.3% 52.9%


Gender Employment % of Total


24

Figure 11. Proportion of total employment by gender, 2013

Figure 12. Employment by gender, 2006 and 2013


0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

Female Male



0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Female Male

2006

2013


25

Highest qualification About two thirds (66.5%) of employees in the aviation sector had post-school qualifications in 2013. This was a significantly higher proportion than in the national economy (56.6%).

Average training levels increased between 2006 and 2013 with the number of workers without a qualification falling from 40.4% to 33.5%. At the other end of the spectrum the number of workers with a degree or higher increased from 13.5% to 16.1% over the seven year period.

Table 14. Employment by highest qualification in the aviation sector

Figure 13. Employment by highest qualification, 2013

NZ% of Total

2006 2013 2006 2013 2013

No Post-school Qualification 6,733 6,086 40.4% 33.5% 43.4%

Level 1, 2 or 3 Certificate 1,032 824 6.2% 4.5% 3.5%

Level 4 Certificate 2,799 2,924 16.8% 16.1% 11.2%

Level 5 and 6 diploma 3,613 4,025 21.7% 22.1% 10.0%

Degrees, level 7 quals and higher 2,251 2,919 13.5% 16.1% 23.9%

Not Elsewhere Included 241 1,402 1.4% 7.7% 7.9%


% of TotalHighest qualification

Employment


0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

No Qual Level 1-3 Level 4 Level 5&6 Degree & higher NE



26

Figure 14. Employment by highest qualification in the aviation sector


0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

No Qual Level 1-3 Level 4 Level 5&6 Degree & higher NE

2006

2013


27

Ethnicity The majority (79.3%) of employees in the aviation sector in 2013 were of European ethnicity. This was up from 70.7% in 2006. The second largest ethnic group was Asian, who accounted for 9.6% of employment in 2013, up from 6.4% in 2006. Māori accounted for 7.3% of employees in 2013, up from 6.9% in 2006 while Pasifika accounted for 7.3%, up from 5.7% in 2006.

The decrease in employment of workers in the ‘Other’ category would have been influenced by the substantial decrease in the number of individuals who identified themselves as ‘New Zealanders’ in the 2013 census compared with the 2006 census.

Table 15. Employment by ethnicity, 2006 and 2013

Figure 15. Employment by ethnicity, aviation sector and New Zealand, 2013


0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

European Māori Pasifika Asian Other


NZ% of Total

2006 2013 2006 2013 2013

European 11,786 14,414 70.7% 79.3% 77.0%

Māori 1,143 1,335 6.9% 7.3% 11.2%

Pasifika 944 1,328 5.7% 7.3% 5.0%

Asian 1,067 1,749 6.4% 9.6% 11.1%

Other 3,000 634 18.0% 3.5% 3.4%


Ethnic Employment % of Total


28

Figure 16. Employment by ethnicity, 2006 and 2013


0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

European Māori Pasifika Asian Other

2006

2013


29

Country of birth In 2013, New Zealand-born workers represented 70.7% of the workforce in the aviation sector. This is 3.1% less than in 2006. The share of workers born in Asia increased by 1.6% to 6.3% over the same period while the share of workers born in Europe decreased by 0.6% to 10.5%.

The aviation sector employed relatively fewer New Zealand-born workers compared to all industries in 2013. This group comprised 71.7% of all workers in all industries while they represented 70.7% in the aviation sector. There are relatively less workers born in Asia working in the aviation sector than in all industries.

Table 16. Employment by country of birth, 2006 and 2013

Figure 17. Employment by country of birth, aviation sector and New Zealand, 2013


0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%


NZ% of Total

2006 2013 2006 2013 2013

New Zealand 12,313 12,860 73.9% 70.7% 71.7%

Australia 387 337 2.3% 1.9% 1.6%

Oceania 659 986 4.0% 5.4% 3.8%

Asia 781 1,145 4.7% 6.3% 8.6%

Europe 1,849 1,905 11.1% 10.5% 9.4%

North Africa & Middle East 59 60 0.4% 0.3% 0.4%

Sub Saharan Africa 325 533 2.0% 2.9% 2.3%

Americas 209 245 1.3% 1.3% 1.3%

Other 88 110 0.5% 0.6% 0.9%


Country of Birth Employment % of Total


30

Figure 18. Employment by country of birth in the aviation sector, 2006 and 2013


0

2,000

4,000

6,000

8,000

10,000

12,000

14,0002006

2013


31

Hours worked Those working 40-49 hours per week account for the highest share (55.8%) of employees in the aviation sector in 2013. This share has increased since 2006 by 3.3%. Workers doing less than 30 hours represent 12.0% of the sector which rose from 10.4% in 2006. The share of very high hours worked (50 and more) decreased from 17.8% in 2006 to 14.4% in 2013.

Table 17. Employment by hours worked, 2006 and 2013

Due to the amount of specialist training required for most aviation occupations, the aviation sector has a higher full -time employment rate than other industries. The proportion of workers working very long hours (more than 50) is lower than in the national economy. Long hours are probably discouraged in a sector in which safety is of critical importance.

Figure 19. Employment by number of hours worked, aviation sector and New Zealand, 2013

NZ% of Total

2006 2013 2006 2013 2013

1-9 249 299 1.5% 1.6% 5.0%

10-19 304 352 1.8% 1.9% 7.0%

20-29 1,177 1,524 7.1% 8.4% 9.1%

30-39 2,426 2,899 14.6% 15.9% 13.8%

40-49 8,749 10,145 52.5% 55.8% 43.0%

50-59 1,788 1,605 10.7% 8.8% 11.1%

60 + 1,173 1,007 7.0% 5.5% 8.2%

Not specified 803 350 4.8% 1.9% 2.8%


Hours Worked Employment % of Total


0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

1-9 10-19 20-29 30-39 40-49 50-59 60 + Not specified



32

Figure 20. Employment by number of hours worked per week, 2006 and 2013


0

2,000

4,000

6,000

8,000

10,000

12,000

1-9 10-19 20-29 30-39 40-49 50-59 60 + Not specified

2006

2013


33

6. TRAINING

This chapter describes the characteristics of individuals being trained by ServiceIQ in 2013. The data includes all individuals who were registered at some point during 2013. The last section in the chapter describes enrolments and completions in provider-based qualifications of relevance to the aviation sector.

Aviation sector trainees accounted for 5.2% of total ServiceIQ trainees.

Age

Table 18. Number of trainees by 5-year age group

With an average age of 35 years, trainees in the aviation sector are on average older than in the ServiceIQ sector as a whole. The average age of all trainees in the ServiceIQ sector is 27. Approximately 77.1% of aviation trainees are 25 years and over, compared with 53.3% in the ServiceIQ sector as a whole.

There are significant differences between the age profile of aviation sector trainees and the persons employed in the sector. While 48% of trainees are under 30-years of age only 19% of employees in the sector are under 30.

Number of trainees Employment

Aviation ServiceIQ Aviation ServiceIQ Aviation

15-19 23 3,091 1.1% 14.3% 1.4%

20-24 456 6,997 21.8% 32.4% 8.3%

25-29 362 3,827 17.3% 17.7% 9.6%

30-34 225 2,084 10.7% 9.7% 10.0%

35-39 195 1,425 9.3% 6.6% 10.9%

40-44 233 1,214 11.1% 5.6% 13.0%

45-49 186 993 8.9% 4.6% 12.6%

50-54 192 873 9.2% 4.0% 13.2%

55-59 117 606 5.6% 2.8% 9.4%

60+ 105 479 5.0% 2.2% 11.6%

Total 2,094 21,589 100.0% 100.0% 100.0%

Source: ServiceIQ

% of total

Age group


34

Figure 21. Proportion of trainees by 5-year age group

Source: ServiceIQ

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0%

60+

55-59

50-54

45-49

40-44

35-39

30-34

25-29

20-24

15-19

Aviation ServiceIQ


35

Gender Females account for a higher proportion of trainees in the sector than males. Approximately 66.8% of aviation sector trainees are female, compared with 46.2% in the ServiceIQ sector as a whole.

The gender profile of trainees in the aviation sector is quite different to the employment profile, with males accounting for the majority of employees (67%).

Table 19. Number of trainees by gender

Figure 22. Proportion of trainees by gender

% of total Employment


Male 693 11,560 33.1% 53.5% 67.3%

Female 1,399 9,984 66.8% 46.2% 32.7%

Unknown 2 45 0.1% 0.2%

Total 2,094 21,589 100% 100% 100%

Source: ServiceIQ

Gender

Number of trainees

Source: ServiceIQ

0% 20% 40% 60% 80%

Unknown

Female

Male

Aviation ServiceIQ


36

Ethnicity European is the largest ethnic group among trainees in the aviation sector, accounting for 72.8% of trainees. This is a higher percentage than in ServiceIQ as a whole, in which they account for 50.9% of trainees. Within the aviation sector the Asian group accounts for 8.9% of trainees and Pasifika, 7.0%.

Table 20. Number of trainees by ethnicity

Figure 23. Proportion of trainees by ethnicity

Source: ServiceIQ

0.0% 20.0% 40.0% 60.0% 80.0%

Unknown

Other

Asian

Pasifika

Māori

European

Aviation ServiceIQ

Aviation ServiceIQ Aviation ServiceIQ

European 1,525 10,991 72.8% 50.9%

Māori 103 2,716 4.9% 12.6%

Pasifika 146 1,629 7.0% 7.5%

Asian 186 5,381 8.9% 24.9%

Other 79 687 3.8% 3.2%

Unknown 55 185 2.6% 0.9%

Total 2,094 21,589 100.0% 100.0%

Source: ServiceIQ

Ethnicity

Number of trainees % of total


37

Level of study The majority (56.1%), of trainees in the aviation sector are studying towards Level 4 qualifications. By contrast, 13.0% of trainees across the whole of ServiceIQ are studying for Level 4 qualifications. More than 70% of trainees in the aviation sector are studying at Level 4 and above. One of Government’s Better Public Service targets is to get 55 percent of 25-34 year olds with Level 4 qualifications and above by 2017.

Table 21. Number of trainees by level of study

Figure 24. Proportion of trainees by level of study

% of total

Aviation ServiceIQ Aviation ServiceIQ

2 0 13,615 0.0% 63.1%

3 594 4,669 28.4% 21.6%

4 1,175 2,796 56.1% 13.0%

5 10 194 0.5% 0.9%

6 285 285 13.6% 1.3%

7 30 30 1.4% 0.1%

Total 2,094 21,589 100.0% 100.0%

Level

Number of trainees

Source: ServiceIQ

0% 10% 20% 30% 40% 50% 60% 70%

7

6

5

4

3

2

Aviation ServiceIQ


38

Region A high proportion of aviation sector trainees are located in Auckland (54.4%) which compares with 40.5% for all ServiceIQ trainees. The next highest concentrations are in Nelson-Tasman-Marl (24.4%) and Canterbury (9.8%) respectively. The high proportion of trainees in Auckland reflects a similar proportion of employees in the aviation sector. Canterbury has a low rate of training relative to its share of employees whereas the reverse is true for Nelson-Tasman-Marlborough.

Table 22. Number of trainees by region

Figure 25. Proportion of trainees by region

Employment


Northland 3 628 0.1% 2.9% 0.6%

Auckland 1,139 8,748 54.4% 40.5% 52.6%

Waikato 40 1,719 1.9% 8.0% 3.4%

Bay of Plenty 22 1,548 1.1% 7.2% 1.9%

Gisborne-Hawke's Bay 94 743 4.5% 3.4% 1.5%

Taranaki 0 415 0.0% 1.9% 0.7%

Manawatu-Wanganui 21 1,077 1.0% 5.0% 2.9%

Wellington 28 1,990 1.3% 9.2% 7.0%

West Coast 0 104 0.0% 0.5% 0.3%

Canterbury 205 2,306 9.8% 10.7% 21.5%

Otago 30 963 1.4% 4.5% 2.5%

Southland 1 341 0.0% 1.6% 0.8%

Nelson-Tasman-Marl 511 1,007 24.4% 4.7% 4.4%

Total 2,094 21,589 100% 100% 100%

Source: ServiceIQ

Region

% of totalNumber of trainees

Gisborne-Hawke's Bay

Source: ServiceIQ

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%

West Coast

Taranaki

Southland

Northland

Manawatu-Wanganui

Bay of Plenty

Wellington

Otago

Waikato

Gisborne-Hawke's Bay

Canterbury

Nelson-Tasman-Marl

Auckland

Aviation ServiceIQ


39

Domain Domain is the lowest order of classification within the NZ Qualifications Framework and represents a cohesive cluster of similar unit standards.

The highest proportion of the aviation sector's trainees is studying for qualifications in the flight attendants domain (29%). The next highest concentrations are in the aeronautical engineering (24%) and airport operations (18%) domains.

Table 23. Number of trainees by domain

Provider-based training This section shows enrolments and completions in provider-based qualifications of relevance to the aviation sector. It includes all fields of studies of relevance to the aviation sector. This means that some fields may be of relevance to other ServiceIQ sectors and are included in the statistics provided for those sectors.

Fields of study included in the above statistics are:

Aerospace Engineering

Aircraft and Maintenance Engineering

Aircraft Operation

Air Traffic Control

Table 24 shows that the number of learners enrolled for provider-based qualifications considerably outnumbers those enrolled in ServiceIQ qualifications for aviation.

Table 24. Enrolments and completions at provider-based training, 2012

Domain Number of trainees % of total

Flight Attendants 601 28.7%

Aeronautical Engineering 504 24.1%

Airport Operations 348 16.6%

Aeronautical Maintenance Certification 268 12.8%

Tourism Māori 105 5.0%

Travel 89 4.3%

Air Traffic Services 85 4.1%

Aiport Opertions 27 1.3%

Aircraft Operation 27 1.3%

Aeronautical Storekeeping 21 1.0%

Business 17 0.8%

Aviation 1 0.0%

Total 2,093 100.0%

Source: ServiceIQ


40

7. APPENDIX A. METHODOLOGY

Definitions of key industries and occupations Industries

Aircraft Manufacturing and Repair Services (code C239400 in the 2006 Australia New Zealand Standard Industrial Classification) consists of units mainly engaged in manufacturing or repairing aircraft, aircraft engines and frames, as well as specialist aircraft repair services not elsewhere classified.

Air and Space Transport (I490000) consists of units mainly engaged in operating aircraft for the transportation of freight and passengers.

Airport Operations and Other Air Transport Support Services (I522000) consists of units mainly engaged in operating international, national or civil airports. Also included are units mainly engaged in providing other services to air transport such as airport terminals, runways, air traffic control services, aerospace navigation or baggage handling services.

Occupations

Aeroplane Pilot (code 231111 in the Australia New Zealand Standard Classification of Occupations) flies aeroplanes to transport passengers, mail and freight, or provide agricultural, aerial surveillance or other aviation services. Registration or licensing is required.

Air Traffic Controller (231112) ensures the safe and efficient movement of aircraft in controlled airspace and aerodromes by directing aircraft movements. Registration or licensing is required.

Flying Instructor (231113) teaches the theory and practical skills of flying aircraft. Registration or licensing is required.

Helicopter Pilot (231114) flies helicopters to transport passengers, mail or freight, or provide agricultural, aviation or aerial surveillance services. Registration or licensing is required.

Air Transport Professionals nec (231199) this occupation group covers Air Transport Professionals not elsewhere classified. Registration or licensing is required. Occupations in this group include: aircraft navigator, airworthiness inspector, balloonist, flight engineer inspector.

Aircraft Maintenance Engineer, Avionics (323111) inspects, tests, aligns, repairs and installs aircraft electrical and avionic system components. Registration or licensing may be required.

Aircraft Maintenance Engineer, Mechanical (323112) inspects, tests, repairs and installs aircraft hydromechanical and flight system components and aircraft engines, subassemblies and components. Registration or licensing may be required.

Aircraft Maintenance Engineer, Structures (323113) inspects, dismantles and reassembles aircraft structures, and repairs and replaces components of aircraft frames. Works with both metal and carbon fibre composite materials. Registration or licensing may be required.

Flight Attendant (451711) provides services for the safety and comfort of aircraft passengers.


41

Measuring employment in the aviation sector Infometrics uses a time series of industry-occupation employment matrices for New Zealand in order to define and measure total employment in the ServiceIQ sectors. Table 25 shows a hypothetical industry-occupation employment matrix. A total of 216 people are employed in this hypothetical economy. The matrix divides those people across four industries and five occupations. For example 59 people are employed in Industry 1 and 6 of those 59 people are employed in occupation A.

Table 25. Hypothetical industry-occupation employment matrix

In the above example we have defined a hypothetical ITO sector (the shaded cells) as consisting of Industry 2 and Occupations C and D. Total employment in the sector-is calculated as 50+43+29=122. Total employment in each of the ServiceIQ sectors is calculated using actual industry-occupation matrices for New Zealand.

Infometrics has compiled a time series (2000-2013) of industry-occupation matrices for the New Zealand economy using 490 industries (level 5 industries of the ANZSIC06 industrial classification) and 1000 occupations (level 5 of the ANZSCO occupational classification) which were used for the estimation of employment in the ServiceIQ sectors.

The following data sources were used to construct the matrices:

Infometrics Industry Occupation Model. This model provides a quarterly time series of total employment in 500 industries by region and territorial authority. The model provides more comprehensive, up-to-date and statistically robust estimates of employment than other data sources such as Business Demography. The model draws heavily on LEED quarterly data series which is the most robust source of industry employment data. The quarterly LEED series only measures employees. To account for self-employed the quarterly LEED series is adjusted upwards using industry specific self-employment rates from the annual LEED series.

Population census 1996, 2001, 2006, 2013. These censuses provide a time series of changes in the occupational composition of employment in each industry over time as well as a benchmark of total employment in each occupation in the census years.

Various industry studies conducted by Infometrics. New information obtained in industry studies regarding the occupational composition of employment in industries and how that changed over time is incorporated into our industry-occupation matrices.

Measuring demographic characteristics of sectors Employment in the aviation sector is defined in terms of both industry and occupations using an industry-occupation employment matrix. After defining the

Industry 1 Industry 2 Industry 3 Industry 4 Total

Occupation A 6 12 16 10 44

Occupation B 13 14 6 3 36

Occupation C 19 5 17 2 43

Occupation D 5 2 12 10 29

Occupation E 16 17 19 12 64

Total 59 50 70 37 216


42

sector on the matrix we sum employment across all occupations in each industry to arrive at employment by 500 industries. We can measure the demographic characteristics of employees in these industries using data from the 2006 and 2013 population census and aggregate across industries to arrive at estimate for the sector as a whole.

Methodology for estimating net demand replacement The cohort-component method developed by Shah and Burke4 has been used to estimate net replacement rates. The cohort-component method uses estimates of employment by occupation and age category at two different points in time, to establish the inflows and the outflows in each occupation in each age-cohort. Shah and Burke used annual data, however due to the lack of annual data for New Zealand, data from the 2001 and 2006 Census was used in this study, together with national level forecasts from the Department of Labour.

The net flow from an occupation was estimated as the sum of the change in the size of each age cohorts between 2001 and 2006. If the size of the cohort decreased then there has been an outflow, whereas if the cohort increased the net outflow is equal to zero. This is true if the number of people employed in an occupation is expanding. However, if employment is decreasing then the net outflow is equal to sum of outflows less the size of the employment decline. Total net outflow from an occupation is estimated by summing the net outflow from each age cohort. The five year net demand replacement rate is estimated by dividing the total net outflow by employment in the occupation in 2001. This rate is converted to an annual rate.

The above method provides historical estimates of net replacement demand rates for each occupation over the period 2001 to 2006. In order to estimate the total number of job openings in future we have drawn on trends in national level forecasts estimated by the Department of Labour.

4 Shah C and Burke G. 2001. ‘Occupational replacement demand in Australia’. International Journal of

Manpower, Vol. 22, No. 7, pp. 648-663. Centre for the Economics of Education and Training, Monash University.


43

Infometrics Regional Industry Employment Model This study draws heavily on the Infometrics Regional Industry Occupation Model (RIOM) which provides more robust and up-to-date information than Business Demography statistics, the source used by many economic analysts for estimates of industry and regional employment. The RIOM is built on quarterly and annual LEED data extracted by special request from Statistics New Zealand at the territorial authority level. Quarterly LEED provides the number of employees in each industry for each quarter. Annual LEED provides the number of self-employed in each industry which are quarterised and added to the number of employees to arrive at total employment. The occupational dimension is added to the model using industry-occupation employment share matrices developed from successive population censuses.

The model estimates employment in recent quarters for which LEED is not available by using time series analysis. The model draws on the relationships between industry performance at the territorial authority level and national level and recent trends in industry performance.

The RIOM provides estimates of the number of people employed in 480 industries in each region and territorial authority for each quarter since March 1999.

Data from the RIOM has the following advantages over data from Business Demography.

The RIOM includes self-employment whereas it is excluded from Business Demography. The exclusion of self-employment leads to a significant undercount of employment in certain industries such as agriculture and construction. Infometrics utilises annual LEED to provide estimates of self-employment by industry.

The RIOM is benchmarked on industry employment totals from LEED, which is statistically more robust than Business Demography. LEED is designed to measure employment whereas Business Demography is designed to measure the number of establishments etc. and only measures employment as a spin off.

The RIOM measures employment in each quarter of the year whereas Business Demography provides only a single snapshot (February) each year. Providing only a single snapshot is inadequate for industries such as horticulture and hospitality which are highly seasonal.

Output and employment forecasts by industry The Infometrics Industry Model produces forecasts of output and employment for 54 industries using a mix of principle component and regression techniques to link macroeconomic key indicators (e.g., inflation, interest rates, unemployment, the exchange rate, business profitability etc.) to prospects for each industry. A key aspect of this approach is that it produces an outlook for an industry that takes into account the recent performance of that industry, the impact of key influences on business performance in that industry, and is also constrained to ensure that the sum of production in all industries equals our forecasts of overall economic activity. That is, an industry can only grow faster than overall economic growth if past industrial performance and business conditions indicate that it will increase its share of national output.


44

The main applications of principle component or factor analytic techniques are: (1) to reduce the number of variables and (2) to detect structure in the relationships between variables, that is to classify variables. Therefore, factor analysis is applied as a data reduction or structure detection method.

In the current context, principle component analysis is used to separate a panel of data into its principal cross-sectional components and their associated time domain components. For example, one might have a panel of quarterly industrial production data that has been converted into measures of each industry’s share of GDP, i.e the share for the i-th industry in quarter t can be presented as:

∑ .

Thus, one can forecast industrial production ( ) by applying forecasts of industrial shares ( ) to forecasts of total GDP (∑ ). The question then becomes one of forecasting the ’s. Principle component approaches are about reducing the scope of the forecast problem from forecasting, say, 20 inter-dependent ’s to one of diagnosing the interrelationship between each of the ’s and forecasting three or four independent time components.

Without going into the detailed mathematics, the aim of the approach is to use Eigen Values and Eigen Vectors to decompose the matrix of ’s into i independent (orthogonal) cross-sectional (I x 1) factor vectors ( ( )) each with an associated (1 x T) time-varying parameter-vector { }. If ( ) is the original (I x T) matrix of data, one can reproduce the matrix by simple matrix multiplication:

( ) ( ) ∑ ( )

The critical issues here are that each of the factor vectors ( )are orthogonal and that one can often explain most of the variation in the matrix with a small subset of the factor vectors, eg greater than 90% of the variation might be explained by 3-4 of the factor vectors. This means that once we have undertaken the principle component analysis we can obtain reasonable forecasts by concentrating on just the 3-4 key factors and conducting independent forecasts of their associated time-varying parameter-vectors{ }.

ServiceIQLevel 14Plimmer Towers2–6 Gilmer TerraceWellington 6011

E:T:W:

[email protected] 863 693ServiceIQ.org.nz

InfometricsLevel 20Plimmer Towers2–6 Gilmer TerraceWellington 6011

E:T:W:

[email protected](04) 473 0630infometrics.co.nz

Documents

A PROFILE OF THE AVIATION SECTOR - ServiceIQ · The New Zealand aviation sector was somewhat insulated from the recession by soaring growth in China and Australia avoiding recession,