Aviation CEO Insights Part 1: “Compare 550 knots with 15 knots”, Espen Høiby, CEO, AAP Aviaton)
Aviation CEO Insights Part 1: “Compare 550 knots with 15 knots”, Espen Høiby, CEO AAP Aviation
Espen Høiby, the CEO of AAP Aviation in a recent interview with Alumni Global, shared his reflections on the successes, challenges, and leadership priorities shaping the sector. From operational transformation to talent cultivation, his insights offer a perspective on sustainable growth in a volatile industry. Can the aviation industry be a model for navigating the fast pace of change we see in our world today?
What were your main successes and challenges in 2024?
The year 2024 was a year of both successes and challenges. Our success stemmed from assembling an exceptional team. 2024 was a turning point for AAP Aviation, marked by a return to profitability and the establishment of 7 new legal entities for forthcoming crew management operations for new and existing clients, including Austria, Philippines, Ireland, and Thailand. We recruited more than 1000 cabin crew and pilots for various clients around the world. We are also expanding into providing European narrow-body services under long-term capacity provider agreements. The groundwork is in place for an Aircraft Operation Certificate (AOC) in Norway, and we are now looking to secure a launch customer for the operation.
What are the major bottlenecks for growth in the aviation industry, and how should the sector reinvent/ disrupt to address them?
Key bottlenecks include recruitment challenges of securing qualified personnel and capacity constraints due to the large OEMs, Boeing and Airbus, and massive delays in aircraft deliveries. In addition, the GTF engine crisis is a pressing issue in itself, with some three thousand engines out of operation, potentially impacting the sector until 2030. Beyond technical challenges, there is a need to revitalize the industry's image, making aviation an attractive career path for younger generations.
What tough decisions will airline CEOs need to make in the coming year to build a more predictable cost structure with enhanced flexibility?
CEOs will need to make some bold and transformative decisions. One of the key shifts I advocate for is moving away from outdated operational models and embracing advancements in business models and technology. Specifically, I propose a shift towards a brand-centric model, where airlines focus on defining their routes and sales strategies while outsourcing part of the crew and fleet capacity to external providers.
This model is already seeing success in the U.S., and I believe it could offer European airlines the same benefits—greater flexibility and more predictable costs. However, this isn’t just about adopting a new model; it requires strong leadership willing to challenge set practices. By adopting these new operational approaches, airlines can not only improve cost efficiency but also enhance safety standards. It’s a tough road, but one that promises significant long-term gains.
What’s your view on succession planning in the context of the complexity and attractiveness of the airline industry?
First of all, flexible employment models are important to attract young professionals, outdated paradigms no longer resonate with modern talent. We need a model where leaders dare to challenge the status quo while fostering collaboration with unions to develop win-win solutions.
A serious look at how we cultivate leadership within organisations across the industry is needed. Instead of too often relying on getting competence for top positions from the outside of the industry, a clearer career path model within many aviation organisations, where internal talents are better incentivised, coached and guided to top positions I believe is beneficial. When it comes to career growth, there can be a perception that there’s a glass ceiling where you can only go so far within the organisation, and if you want to climb higher, you must leave the company. This is a risk we cannot afford. As an industry, we need to attract and retain talented employees and there are some quite easy fixes.
What are the quick fixes?
I think business and leadership coaching, particularly through advisory boards, and one-to-one coaching for existing talent can be more effective than an external hire, which often requires a period of onboarding. Coaching provides incentives for employees to stay, when they feel that they are being provided with opportunities to develop. Needless to say, at times an external hire is needed to bring invaluable expertise and bring new perspectives to help the organisation grow.
What are your top three wishes for 2025?
I hope that leaders in our industry dare to do what is necessary to effectively take on the big challenges. If we can reform the operational side of aviation, I believe we can make the industry more attractive to future talent, improve profit margins, and shareholder value.
Stay tuned for our next Aviation CEO Insights Part 2 in February 2025.
If you would like to discuss this further, or have a dialogue around talent management needs then please do get in touch with us at Alumni Global.