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How Will the Aviation Industry Change in 2021?

  • by: Maxime Robert
  • On: 5, Feb 2021
8 min read

Alongside Retail, Entertainment and the Arts, the Aerospace and Aviation sector has suffered significantly since the Covid-19 pandemic. The new challenges of Brexit, legal changes and business turnaround after global lockdowns will join with the existing problems of skills shortages, rising jet fuel prices, airport capacity and balancing climate change targets with rising costs and demand.

The list of problems to tackle will also present new opportunities for innovation, collaboration and unprecedented success in long-neglected business areas. VHR’s Aerospace & Aviation recruitment specialists reveal the main challenges facing the sector in the year ahead, and how business leaders can approach them.

5 Ways the Aviation Landscape Will Change in 2021

1. Covid-19

Unsurprisingly, the coronavirus pandemic will deliver the most significant impact to the Aviation industry this year.

In February 2021, the International Air Transport Association (IATA) reported that the industry has been hit by the worst demand levels in history. Air traffic for 2020 fell by 65.9% compared to 2019, with international traveller numbers 75.6% lower than the previous year. 2020 saw the collapse of airlines such as Flybe and almost 70% of the world aircraft fleet was parked at some point in the year. Manufacturers were also badly affected: overall demand dropped by 30% and 50% for Airbus and Boeing respectively, and MRO spending was at 55% of the previous year’s levels.

Despite the difficulties of the past 12 months, many experts predict a positive era for the sector in the very near future. IATA forecast a 50.4% improvement for the industry in 2021, and air travel is expected to return to 2019 levels in 2023. The potential growth of Aerospace and Aviation will depend more on the containment of the virus and global and national Government responses, such as lockdowns vs track and trace systems, than customer interest. Whilst passengers will become increasingly concerned with sustainability and be more mindful of the cost and environmental impacts of their trips, international travel will thrive in popularity in recent years as individuals prioritise experiences over material items.

2. Brexit

Following the deal arranged in December 2020, the UK’s departure from the EU will affect both British and European trade and manufacturing. Before Brexit, the UK offered the world’s-second largest Aerospace industry and was reliant on international workforces and business partnerships: 4% of the UK’s Aerospace employees are EU nationals, and 5% of EU Aerospace employees are originally from Britain.

The interwoven labour market will further complicate the barriers created by freedom of movement laws, which are yet to be fully determined, and new immigration laws restricting labour access and delaying the migration of skilled European contractors looking to work in Britain. UK citizens no longer have the automatic rights to work in the EU, and new country-specific approaches to granting work permits will difficulties for European nations trying to attract British contractors who are likely to be discouraged and inconvenienced by the new rules.

Brexit will also have consequences for industry production, logistics, product quality, service delivery and financial support. As the CAA will cease to be a member of EASA. Britain’s safety standards and regulatory processes will need to be redefined, and the UK will no longer enjoy the same levels of influence over and collaboration with European Aerospace. Pilots who hold EASA licences issued by the CAA will no longer be able to operate EASA-registered aircraft. The UK and EU Governments have yet to confirm mutual recognition of professional qualifications, which could see hundreds of thousands needing to rapidly upskill to continue working as needed. Trade agreements, tariffs and new negotiations may cause delays to aircraft production and project delivery, as well as making planned projects and programmes unviable given additional restrictions and costs.

However, Brexit will also bring new opportunities for British Aerospace. Many business leaders will experiment with permanent workforces with less reliance on contractors, presenting the chance to prioritise long-term planning with continuous development of a highly-skilled permanent workforce, and benefit from the knowledge and relationships that permanent staff members bring. British Aerospace leaders are in an excellent position to explore globalisation and expand into other continents, creating new partnerships and capitalising on the freedom from EU restrictions.

3. Market Changes


Covid-19 responses and case rates will have a marked impact on the global Aviation market in 2021. Countries leading in vaccine delivery per 100 citizens such as Israel, the UAE, Bahrain and the UK are expecting to see faster recovery than other nations.


Asia will continue to expand in the sector and dominate new growth in market share: Vietnam is one of the fastest-growing Aviation markets in the world and is expected to have the highest average growth rate in Southeast Asia at 17.4%. The country has 22 airports and capacity for 96million passengers annually. China and Qatar are also predicted to enjoy continuous growth in the next year.


Established players in the sector will have expected to benefit from the collapse of smaller or less stable competitors; however, many start-up airlines are planned to take flight in 2021 including:

  • Denmark – New ‘virtual airline’ Airseven from Copenhagen AirTaxi will fly charter contracts and lease planes to individual flights instead of establishing scheduled routes.
  • Norway – Norwegian start-up Flyr has planned for launch in later 2021 after final decisions around fleet providers.
  • Iceland – Start-up airline PLAY rescheduled launch following Covid-19 restrictions and plans to operate across 14 European and American destinations.
  • South Korea – New carrier Aero K plans to operate domestic and international flights to Japan, China, Taiwan and Vietnam.
  • Vietnam – Newly-certified Vietravel Airlines aims to operate across Southeast and Northeast Asia and the Middle East. Start-up Bamboo Airways will launch non-stop flights to the United States before expanding further afield.
  • South Africa – Start-up LIFT is already storming ahead with flights between Cape Town, Johannesburg and George.
  • Brazil – Brazil’s largest bus company Itapemirim is launching a new airline, Ita Linhas Aereas, which will strive to deliver 3,000 flights per month. A second Brazilian airline, Nella Linhas Aéreas, aims to operate at 78 airports.
  • Colombia – Low-cost carrier Ultra Air will operate domestic flights across 29 domestic and 15 international routes, and plans to offer airfares 20% lower than other carriers in Colombia.
  • Ecuador – Domestic carrier Ecuatoriana Airlines ise set to launch in Q1 2021 afetr receiving its permit late last year.
  • New Zealand –Pacifika Air hopes to launch direct services between confirmed ‘travel bubbles’ across cities and islands.

4. IR35

The updates to existing IR35 rules have been confirmed to commence in April 2021. The off-payroll legislation will require all private sector businesses and their entire workforces to become compliant with the new tax rules.

Aerospace and Aviation will be particularly impacted due to its reliance on high volumes of contract workforces. Aviation employers will soon assume full responsibility for determining a worker’s employment status

Aviation leaders will be particularly impacted by:

  • Added Risk – Breaching the rules and being found to be non-compliant – a very real possibility given the confusion surrounding tax status determination – could spell large fines or potential prison charges for CEOs and MDs
  • Greater Costs and Resource Burden – Administrative requirements for recruiting, onboarding and managing each individual contractor will require significant time from HR, finance and legal teams
  • Projects Scaled Back or Delayed – Many companies may need to restructure their workforces to ensure that projects can be delivered on time and in full within legal and cost constraints, and others may be forced to delay new projects due to additional costs and resource management requirements
  • Smaller Graduate/Entry-Level Pipelines – The knock-on effects of the above will reduce the costs and resources available to perform necessary training, and may discourage younger demographics from entering the sector if they are misinformed or confused about how IR35 will affect them and their take-home pay

The sector’s business leaders and hiring managers must focus on compliance and efficient processes in 2021 to limit risk and impact to both employers and contractors, and ensure contractors are protected, productive and satisfied with working arrangements.

5. New Approach to Talent Attraction

The Aviation sector has long suffered a chronic skills shortage: before Covid-19, 2 in 5 industry leaders marked recruiting skilled workers as their most significant business challenge. Boeing had forecasted pilot vacancies to double in the next seven years, with over 70,000 new technicians urgently required to fulfil demand in the same time period.

However, after more than 60,000 UK-based contractors lost their main source of employment in the first half of 2020 and almost 400,000 staff were made redundant in Q3 last year, the search for Aviation talent is set to transform. With over half of those currently employed reporting that they are actively looking for a new job, potential talent pools for previously struggling sectors are rapidly opening up as applicants seek new experiences and new lifestyles in new locations.

For those sectors still experiencing a lack of new applications, business leaders and hiring managers can turn their attention to headhunting experienced individuals who are already in work – albeit with a slightly different skill set. Individuals with expertise in design, production, manufacturing, build and maintenance will often be able to transfer their skill sets to Complementary sectors with the potential to offer relevant talent include Defence, Cyber Security, Infrastructure, Construction, Renewable Energy, Life Sciences, Technology and Healthcare.

Whilst many of these sectors will be experiencing their own skills shortages, the large volumes of permanent staff and contractors who are now reassessing their career path are more open to change than ever before – and an easily transferable skill set will enable a smoother transition and more similar ways of working and take-home pay than other career options. Industries with similar products, processes and environments means your ideal candidate will be well-versed in facing many of the same challenges; for example: globalisation, automation, carbon efficiency targets, customer personalisation demand, supplier management and balancing costs and resources with project requirements.

Recruiting Aerospace & Aviation Positions?

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