Business Schools






        Aerospace MBA Programs Take Flight As Sector Faces Skills Crunch

        Aviation boom, introduction of fuel efficient aircraft, and falling oil price spur growth in aviation business — opening up new career opportunity.

        The global aerospace industry is set for take-off. A boom in aviation, the introduction of increasingly fuel efficient aircraft, and a falling oil price have combined to set the scene for years of growth for the aviation business.

        The world’s biggest aircraft manufacturers have record orders. The International Air Transport Association projects airlines to generate the strongest profit margins since the mid-1960s.

        And, meanwhile, the Space Foundation says the world’s space economy is growing at 10% a year.

        “For the airline business, 2015 is turning out to be a positive year,” says Tony Tyler, chief executive officer at IATA. “Since the tragic events of September 2001, the global airline industry has transformed itself with major gains in efficiency.”

        The strength of the aerospace sector has spurred a significant increase in career opportunities.

        Dr Christophe Bénaroya, director of the Aerospace MBA at France’s Toulouse Business School, says the recruitment market has been buoyant over the past two decades.

        The rapid growth of new markets such as China, India and the Middle East are shaping and driving the aerospace industry. Growth is also spurred by changes in technology, manufacturing and new consumer expectations.

        As a consequence, need for management has emerged — leadership, cross-cultural, digital marketing, finance, and purchasing skills are all in demand. “A lot of new profiles are now sought by aerospace leaders,” says Christophe.

        Suppliers and services companies are hiring the most, he says, owing to the huge backlog of orders among aircraft manufacturers, such as Boeing and Airbus. The world’s two biggest airliner makers have orders for around a decade of production — fuelling the whole value chain.

        But such rapid demand has raised concerns that manufactures’ long, complex supply chains may not be up to the job. “Many airlines still face huge challenges,” says the IATA’s Tony.

        An intense production tempo is now demanded of even the smallest cogs in the supply chain.  

        This has resulted in a growing need for talented managers to handle global production lines.

        “Supply chains must be managed well in order for companies to remain competitive,” says Sara Williams, career relationships manager at Cass Business School.

        “Companies that have a supply chain which is integral to their operations need the right staff to effectively plan and predict, in order to ensure their supply chain is lean and cost effective,” she says.

        Chris Higgins, assistant director of the Career Development Centre at INSEAD, the business school, says this demands strong analytical and quantitative skills; interpersonal and communication skills; the ability to perform in a multifunctional environment.

        An executive training program on logistics run by Airbus, Europe’s biggest aerospace group, and the OneMBA — run by four business schools including Rotterdam in the Netherlands and Kenan-Flagler in the US — is a sign the industry is tackling the challenge.

        “Airbus has proven they are able to build a plane in parts around Europe by co-ordinating the assemblies,” says Antonio D’Acunto, OneMBA graduate and director of training at the manufacturer Cummins.

        New technologies have aided both the supply chain and the wider aerospace business.

        “It [technology] certainly expedites process and makes knowledge of current demands more readily available,” says Eugene Spiegle, vice chair of the supply chain management department at Rutgers Business School. “But at the same time, [technology] increases some degrees of security risk.”

        Aircraft data — which remain widely unexplored — are generating a wave of excitement across the aviation industries. Aircraft manufactures talk of the possibilities of predictive maintenance, and huge potential cost savings.

        Big data is becoming crucial in maintenance and overhaul, as well as in lean manufacturing, logistics, marketing, and finance,” says Toulouse’s Christophe. “It cannot be considered as an external ingredient anymore.”

        Yet concerns have been aired that there may be a shortage of skilled employees to transmit big data into business solutions.

        “Apart from the general shortage of people with skills in analytics, there is specifically a shortage of team leaders,” says Arne Strauss, associate professor of operational research at Warwick Business School.

        Nonetheless, the effect of the sharp oil price fall since last year, and improved aircraft efficiency have fuelled the industry’s boom. Half the global profit of airlines is expected to be generated by North America. Yet emerging markets are beginning to take flight.

        Dwarkanath Srinivasan, CEO of Airbus India, says the nation is one of the fastest developing countries in the aviation market, and there is a need for the next generation of business leaders to enter the industry.

        “With more passengers flying each year in India, there is an increasing need for expertise in aviation business,” he says.

        Airbus is sponsoring a two-year, part-time degree to develop and nurture local talent in the field of aerospace, offered by the Indian Institute of Management — Bangalore.

        Airbus’ program will compete for aerospace executives with HEC Paris, the French business school, which runs an aviation specialization, and Canada's HEC Montréal, which recently launched an aerospace-focused MBA.

        Jacques Roy, professor with the operations management and logistics department at HEC Montréal, says aerospace managers tend to start with technical backgrounds.

        “An MBA will give them the skills they need to be more comfortable in these roles and speed them along their career paths,” he says.

        Aerospace has not always been a hit with MBAs. But S Raghunath, a professor at IIM Bangalore, says jobs in the sector have become more appealing. “New international markets are growing fast.”

        Aerospace suppliers and fliers are riding high. Yet the next frontier may be the $300 billion space economy. The commercial side — such as satellite navigation equipment providers — is coming of age, buoyed by an upturn in government space budgets.

        “There are huge career opportunities here,” says Richard Bloom, chief academic officer at Embry-Riddle Aeronautical University in the US. “The key will be developing viable options for commercialization, and identifying and resolving not only technical but human challenges.”

        While more is being spent on space, military contractors such as Lockheed Martin, the world’s largest by sales, and BAE Systems are coming under increasing pressure from cuts to government defence budgets.

        “Defence budgets are shrinking and governments continue to be challenged with affordability and competing domestic priorities,” says Angelo Sorrentino, a former sales executive at a leading aerospace company, who is on the MBA at Imperial College Business School in London.

        Meanwhile, the global aviation industry has sought to improve safety after the disasters of Malaysia Airlines’ flight MH370, and Lufthansa’s low-cost airline Germanwings’ flight 9525. “Without adequate safety there is no industry,” says Embry-Riddle’s Richard.

        The aerospace sector is taking off. But managers should view it in perspective: Apple, the iPhone maker, earned $13.6 billion in the second quarter of this year — about half the expected 2015 full-year profit of the entire airline industry.

        “The business of providing global connectivity is still a very tough one,” says the IATA’s Tyler.