Asia’s aviation sector is poised for strong growth but faces many challenges; strong leadership is essential in the coming years to not only ensure short-term growth but to develop a strong long-term capability.

1. Asian Aviation: Big Growth, Big Challenges
Asia’s aviation sector is poised for strong growth but faces many
challenges; strong leadership is essential in the coming years.
Presentation To: World Private Jet Industry Conference 2009
By: Torbjorn Karlsson
Managing Partner Aerospace, Defense and Aviation Practice; Asia-Pacific
January 21, 2009
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2. Introduction to Heidrick & Struggles
Heidrick & Struggles’ Overview We Help Clients Build Winning Leadership Teams
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60 locations in principal cities of the world and emerging markets
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► A range of services to help them build and retain effective
presence in China and other emerging markets
leadership teams
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3. Big Growth, Big Challenges
► Bangkok’s new Suvarnabhumi Airport is a potent symbol of where things are
going well in Asia’s commercial aviation sector
► On the other hand, bureaucratic meddling has plagued Suvarnabhumi from
its inception, and it was opened years behind schedule
► On the surface, the opportunities available to commercial aviation in Asia are
the same as those for other sectors: rising wealth, booming economies, and
increasingly mobile populations.
► But the skies ahead are not entirely clear. Asia
is far from being a single, homogenous place
► In just 20 years, Asian aviation has gone from
being a staid, cozy sector to a dynamic,
innovative business where there is fierce
competition for passengers, routes, and
financing
► Strong leadership is essential for coping
with the challenges facing the sector
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4. Asia has the potential to be the world’s biggest aviation markets,
but…
► China’s airport infrastructure is good, but it has yet to liberalize its aviation
sector. Only through greater competition will the quality of service available
in China improve.
► India has the opposite problem. Its infrastructure urgently needs expansion
and upgrading, but its deregulated domestic aviation market has resulted in
a dogfight.
► In Southeast Asia one finds the full spectrum of what is good
and bad in the Asian aviation business.
► Japan’s aviation sector is making slow progress
toward liberalization, but obstacles still remain.
► Australia remains unique among the world’s aviation
markets, remote from Asia’s main flight paths,
making bilateral air travel agreements difficult to
negotiate and hat’s more, Australia is fiercely protective
So why does this matter to you?
So why does this matter to you?
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5. MRO Survey – A Proxy for Market & Talent
► There is a strong belief in continued globalization
Globalisation
and consolidation in the MRO industry. 88% of
the respondents feel the industry will be more
globalized in the next three years.
Less
► There is also strong belief in continued globalized
consolidation, 79% of respondents believe in Remain the 2%
more consolidation vs. the 21% that believe a same
plateau has been reached.
10%
► This globalization and consolidation will be
impacted negatively by a shortage in human
capital.
► That shortage is considered the single most
important issue facing the respondents’
More
companies and the industry at large.
globalized
► Over one-third (37%) of all MRO organizations 88%
do not believe their organization has the right
management in place to deal with expected
growth and changes.
► Looking forward, the search to fill such positions will
increasingly lead companies to other regions of the
world especially for developing regions. It appears
that upper level employees will continue to be imported
from overseas, but this will not necessarily correct their
shortage for operational level employees which are
less likely to be sourced to foreigners.
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6. But The War for Talent is Also A Global Issue
All over the world we are facing a shortage of talented people who have the transferable
technical skills to compete in global business
► Today, only 20% of Americans have passports, yet American companies are looking to aggressively
expand into Europe and Asia
► Meanwhile European businesses are searching for footholds in Asia and also further expansion in
North America
► The Japanese, for the first time in 15 years, given their economic upturn, are looking to expand
outside of their borders yet are finding they don’t have the senior management to get them there
► Chinese companies are following this trend and are increasingly committed to gaining a place on
the international stage. In particular, Chinese organizations which were once state owned want to
know if they have the same talent to compete against a General Electric, a Pepsi Cola, a Dell
► Indian companies are rapidly going global and as seen in their airlines,
among other industries, are rapidly tapping into the global talent pool
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7. The War for Talent – Going Forward
In industrial nations the shortage of talent will worsen
► Japan alone will lose up to 60 million people over the next 30 years
► In 30 years there will be 70-80 million fewer Europeans
than there are today
► 50% of the top people in US companies will leave in the
next 3 years
We know the situation in China and India is different.
Yet, in spite of the population wealth, the talent problem in
China is just as pressing
► The talent pool in China is shallow
► Exacerbated by the Cultural Revolution which affected a large group of individuals who would be in
management position now
► In China, just as in the rest of the world, there is a severe shortage in globally experienced senior
management
► A recent report by Business Week showed there is shortage of 70,000 globally experienced Chinese
managers and by 2010, McKinsey predicts India will face a shortfall of 500,000 staff capable of
doing work for multinationals
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8. Excellence Through Business
Planning and Acquisition Process
Acquisition Target is Identified
Acquisition target is identified in
marketplace.
Due diligence starts.
Business Planning Cycle Heidrick & Struggles
1
Heidrick & Struggles engaged early The company has engaged Heidrick
in business planning cycle to discuss & Struggles to consider talent
marketplace activity, talent and options for deal
The company has
2
potential deals. identified a target
Heidrick & Heidrick &
Client
Struggles Struggles
engaged
Deal is completed
Deal is announced to public markets
Deal is
and executive team is already completed
engaged.
5
Successful integration and value
Assessing
creation starts.
talent
3
Human Capital Solution Assessing talent
Heidrick & Struggles provides H&S assesses talent throughout
Human Capital
human capital solution before deal is acquisition process/due diligence
Solution in place
even announced (this makes advising every step of the way.
integration easier and the deal more
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successful from the onset)
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9. Conclusion
Embrace Globalization - But be ►Asia-Pacific is the future, now more than ever, but it clearly lags
mindful in infrastructure and has greater diversity than anywhere else.
►But its worth staying the course. According to a survey of 1,410
CEOs in 45 countries globalization is having a positive impact on
APAC is the future but the
their organizations (Pricewaterhouse Coopers)
challenges, especially in the
►However, the factors that led to increased internal business
Business Aircraft Segment are not
complexity (i.e. risk) for CEO’s to a large or very large extent
to be underestimated!
included expanding their operations into new territories (65%)
engaging in mergers or acquisitions (65%) and launching new
products and services (58%). All key strategies in penetrating the
emerging business aircraft market.
►Externally, complexity was driven to a large extent by
international, national or industry-specific regulations, laws,
standards and reporting requirements as well as by competitor's
actions. Challenges this industry only knows to well!!
To navigate this “obstacle course” you need Human Capital, the oil of
►
tomorrow.
Human Capital is the oil of
tomorrow - it’s in high demand Industry pay has only recently started to become attractive but still lags
►
and is often hard to find alternative professions like legal, medical and finance.
That means making a decision to send high potential individuals abroad
►
where they can gain the technical skill sets, organizational know-how
Like oil you also need analysis,
and experience that will help your company grow, long term
prospecting, investments and
nurturing to capitalize on its It’s a long term investment – you need to operate a talent pipeline with
►
benefits! employees continually being sent abroad, to return a few years later
If you want to look like heroes, if not to your board, but potentially to
►
your successor, you have to invest in human capital
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10. Torbjorn Karlsson
Managing Partner, Industrial and Aerospace, Aviation and Defence Practices, Singapore
Professional Profile
Torbjörn Karlsson leads the Aviation, Aerospace and Defense practice in Europe, Middle East
Africa and Asia. He is also involved in the transportation and supply chain sectors. Prior to
joining Heidrick & Struggles, Torbjörn was Vice President, Commercial, Asia Pacific for
Honeywell Aerospace. He is a seasoned marketing and sales professional with over 18 years
experience in Asia Pacific based in Jakarta, Bangkok, Hong Kong and Singapore, promoting
aviation-related products (including aircraft) and services for large aerospace companies
such as Saab Aircraft, Rockwell Collins and Cathay Pacific.
Torbjörn has a wealth of experience across the aviation sector. He has managed and
designed logistics and sales management processes, identified and closed gaps in opportunities, developed sales
campaigns that have returned significant value, and devised asset management strategies.
Torbjörn has spent many years in the consulting, airport, aviation electronics and regional aircraft markets. His
accomplishments include the management of European and American supplier relationships to develop new markets
and identify new business opportunities and markets. He has managed Asian client relationships to grow business for
multidisciplinary product ranges including hardware, software and integrated solutions, refocusing emphasis to match
changed market environments-increased competition and revised purchasing criteria. In addition to handling all
marketing and sales activities for commuter aircraft in China, Taiwan, Southeast Asia and Indochina leading to an
increase in fleet of 100% over three years, Torbjörn also laid the foundation for consulting and hardware contracts
increasing sales at major regional airports.
Education
Torbjörn studied Mechanical Engineering at the Royal Institute of Technology in Stockholm, Sweden and earned an
MBA from European University in Jakarta and Brussels, Belgium. He also is a certified Six Sigma Black Belt.
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11. #20-01 Suntec Tower One
7 Temasek Boulevard
Singapore 038987
+65-6332 5001
tkarlsson@heidrick.com
www.heidrick.com
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