Economists in Aviation
Practical career advice for young economists considering joining the industry
Fourteen years ago I boarded Qatar Airways flight 76 from Gatwick to Doha, leaving at 11am and arriving about seven hours later at 9pm local time. The plane A7-AEI (pictured) was a shiny Airbus 330 and I remember a smooth ride with a rather decent rogan josh for lunch. And for some reason the moving map was not working. That was the day I began my career in aviation. Here is a picture of me at the airport, ready to go!
In today’s article I am pleased to present three things I have learned since that might be helpful to young economists considering joining the industry.
Aviation has many good jobs for economists
There are all sorts of things that you can do with an economics background in aviation, including:
· Macroeconomic forecasting: Covering growth, employment, trade flows and technological development, if this is your area of interest you might be better off looking at IATA, ICAO and industry-level bodies, or a government, than an airline
· Microeconomic forecasting: Covering competition, special events and pricing, if this is what you fancy check out an airline’s revenue management department, who figure out how many seats to make available at each price point on the basis that seats should not be sold for a lower price today when they can be sold for a higher price tomorrow
· Setting prices: You might be surprised how much effort goes into pricing as it is certainly people, rather than the market, who set the fares – if you are interested in game theory and industrial organisation the pricing team may be the best place for you
· Asset management: Aircraft and airports are valuable assets that need to be used efficiently and effectively, so if you enjoy modelling financial performance you can’t do better than scheduling or network planning, who figure out where and when the aircraft should be sent
· Sales: Even if you do not fancy a long-term sales career, learning sales skills like pitching and account management is always helpful and an airline’s sales team will be a good place to learn how to do this
Plan to work at more than one company
Airlines have lots of jobs, but not many top jobs. This is the typical career path:
· Analyst: Years 1 to 2
· Senior Analyst: Years 3 to 5
· Manager: Years 6 to 9 & beyond – limited availability
· Director: Years 10 to 14 & beyond
· Vice President & higher: Years 15 & beyond – only one or two people in a cohort get here
Promotion from Analyst to Senior Analyst is usually guaranteed in effect if not in principle. But unlike a career in consulting, finance or the law where you can expect either promotion or the sack, airlines will happily leave you as there forever as there are many more Senior Analysts than there are Manager jobs.
Unfortunately pay at the Senior Analyst grade will not support either a nice house or what you need to raise a family comfortably so about four or five years into your career most people will need to look to another airline for your promotion and pay rise. Promotion from Senior Analyst to Manager is the first hurdle to overcome.
Once you are a Manager it is not too hard to get promoted to Director as you are already taking responsibility for the delivery of projects and the running of teams. Directors just do things on a slightly bigger scale so the promotion often comes naturally after a few years.
The second hurdle is Director to Vice President. Not everybody is cut out to be a VP – you have to take responsibility not just for delivery but also for success, and there are rarely clear answers regarding the right paths to take. As with Senior Analyst to Manager, there are many fewer jobs at the senior rather than the intermediate level. But at least the pay as a Manager/Director is acceptable for a reasonable quality of life over the long term so you do not need to be a VP to live and retire comfortably.
For those who want to go all the way, be aware that promotion to VP is sometimes a false step in your career. If you take the promotion and fail there is no going back and no other airline will have you as a VP either. I would happily move airline two, three or four times to reach Director rank, but would recommend waiting for a Vice Presidency at the right airline rather than joining the wrong airline too early. Be particularly cautious about going to the middle east to achieve this promotion – for many people it does not work out.
Don’t forget exciting opportunities in the supply chain
There will be great potential in your career to take your airline experience and apply it with other aviation operators like aircraft manufacturers, OEMs and technology startups/scaleups, many of whom lack direct understanding of how airline managers who buy their products and services really think. My journey at Qatar Airways took me to Senior Analyst after 18 months and after five years I left to start my consulting company rather than seeking a management position elsewhere, in which I found a lot of demand for people who understand airlines to help suppliers achieve their goals.
If you would like some career advice, please do not hesitate to get in touch.
oliver AT ransonpricing DOT com