Thursday, June 13, 2024

The Future-Ready Aviation

By Inderjit Singh

Inderjit Singh, ICAO Aviation Consultant

As we strive for sustainable and inclusive growth in aviation, I have in this write-up attempted to take an overview of global aviation’s performance in the aftermath of the three major disasters in the recent years namely the 9/11 of 2001, the economic downturn of 2008 and the more recent global COVID-19 pandemic 2019-2022; that have impacted aviation as never before. It may sound like a yet another buzzword but being ‘future-ready’ is the need of the hour for organizations across industries for growth and sustainability. Being future-ready, is having the preparedness in dealing with future disruptions; more significantly for the aviation sector.

In this context, it is important to highlight here that aviation is not a self-serving industry but a catalyst to several industries like tourism, hospitality, trade, and commerce sectors. It is further gratifying to share that, amongst the 17 Sustainable Development Goals (SDG) of the United Nations to be accomplished by 2030 for a better world; it is official that 14 of them depend on aviation as an indispensable support system – a very high proportion of reliance. This underscores the value of aviation in global priorities.

Assessment

The world’s airports, airlines, and aircraft manufacturers are reeling under the unprecedented revenue collapse and historic loses caused by the three consecutive incidents in the last two decade and a half – a severe economic shock to the aviation industry. The industry leaders with a clear vision and determination for its future societal and economic role are fighting for its financial stability and revival.  

Many industries were hit hard by the economic downturn of 2008 – aviation being one of them, but it can be argued that air travel suffered one of the most catastrophic blows after the global pandemic of 2019.

Unlike the 2008 global financial crisis, which was purely economic and weakened spending power, 9/11 and the pandemic has changed consumer behaviour, and particularly the airline sector irrevocably.
What followed 9/11, was the formulation of comprehensive legislation by USA that took the lead in the redesign of airline security and safety policies and practices across-the-board. This encouraged global compliance through a universally acceptable regulatory framework. Thus emerged the need to revisit airline & airport safety infrastructure, modernisation, and rehabilitation of airports, all within the parameters of high industry standards and global best practices. This worldwide proactive approach did the required damage-control and has since made our skies safer.

As for the pandemic, it is significant that instant measures of hygiene, distancing, segregation, isolation were very meticulously enforced worldwide to arrest the spread of the virus on ground at airports and on-board the aircraft. The timely emergence of vaccines within a short span of one year through global cooperative efforts helped the removal of travel restrictions and quarantine requirements for vaccinated travellers.

Diagnosis

Bigger and swankier airports, luxurious on-board airline services, and large and modern state-of-the-art aircraft equipped with the latest technology were capturing every traveller’s imagination.  The world-class services guaranteeing a smooth journey from home to destination notwithstanding; something along the line was certainly missing. All was well until the crisis manifested itself in the form of 9/11 and the pandemic and hit the air-transport operations. Our industry in the aftermath of these events is still trying to come out of the crisis.

The above observations in the face of unprecedented current surge in air traffic volumes, allied to expansion of network and low-cost carriers, corresponding growth in airports and airport infrastructure worldwide, and major aircraft manufacturers flush with orders for new aircraft for delivery in next few years, may sound like a strange reflection on my part.

Be that as it may, let us examine as to what exactly is ailing the international aviation industry?

One of the reasons amongst many may be a dipropionate balance in growth between the aviation’s three main constituents – airports, airlines, and aircraft, a mismatched level of investment or a lack of interaction. To my mind, it is this third point that needs to be addressed urgently. If we can improve relations between this “holy trinity” it will lead to a better understanding between them – an understanding that can only reap benefits for all concerned and consequently the overall good of aviation.

Synergy between Airports-Airlines-Aircraft

Often, we note that the three big ones have their separate summits and conferences in different forums at different global locations. It was as an airport operators’ representative and a spokesman at an unprecedented joint forum for these three key sectors that I shared a common platform with airlines and aircraft manufacturers representatives at Seattle -Tacoma Airport, USA; wherein I realized the need for this synergy. Rightly called the “Flight to Prosperity”, the forum beyond any doubt, established the need for better synchronization of the respective agendas and concerns of the three segments to grow together and jointly prosper in the spirit of give and take.

But that sort of publicly admitted co-operation, rather than a continual battle of wits between them remains very much the exception rather than the rule. Examples of implementation are few and far between. The suspicion lurks that each sector is immersed in its own world and its own interests without looking around and taking in the bigger picture. It is like the proverbial “not seeing the forest for the trees.” We stand accused – each one of us – of being too confined, too content, too secure, and of failing to think about the challenges ahead.

The three must collectively in sync work in harmony for a compatible, orderly, and sustainable growth of the air-transport industry. What is required is cooperation, clarity, and coordination between the three business partners and not conflict, confusion, and contradiction. There ought to be a seamless connectivity between them. One weak link and the chain would snap.

Analysis

A global overview and analysis of the effects of 9/11 and the pandemic reveal that post 9/11 in 2001, global flight hours were down by 9% while post pandemic in 2020, the global flight hours were down by 70%. Essentially, three-quarters of global airline companies suspended their domestic and international travel and 93% of them suspended their international travel in response to the pandemic. This resulted in a loss of (US) $370 billion for the aviation industry.

The global passenger traffic dropped from 9.2 billion in 2019 to 3.6 billion in 2020, recovered to 4.6 billion in 2021, and then 6.5 billion in 2022 to 71% of 2019 levels. As per the ACI World Airport Traffic Forecast 2022-2041, there has been an upsurge in demand across many markets worldwide. The passenger traffic towards the end of 2023 has reached 8.7 at 94% of 2019 levels The baseline projections for global passenger traffic indicate that the industry will recover to 2019 levels by the middle of 2024.

My Take

The world airports and airlines are expected to handle 19.3 billion passengers in 2041. The volume of passengers projected for 2050 is 23.9 billion – 243% of the world population of 9.8 billion then. As we look beyond the pandemic, aviation needs to grapple with new realities and consequently devise strategies to meet with this massive mandate.

Mounting losses in the aviation industry over recent years have been dominating and disturbing. What is the most important strategic area; other than the usual creation of capacity and modernization of airports, manufacture, and acquisition of the right mix of aircraft types, streamlining the air navigation systems, and introduction of the advanced technology that the aviation sector should in all earnest essentially consider?

It is predicted that the global GDP could be up to 14% higher in 2030 because of inducting Artificial Intelligence (AI) in global operations, the equivalent of an additional (US) $15.7 trillion – making it the biggest commercial opportunity in today’s fast-changing economy. Aviation can grab a major portion of this windfall. It is time for a quantum leap and not marginal increments of the past. It is now or never – tomorrow will be too late. We ought to think big!

To my mind, aviation, in all its manifestations, needs to embrace this game -changer technology more aggressively and make it a major component in its tool-kit to transform and restructure its prevailing business models. The biggest sector gains will be in financial operations, communication, healthcare and customer services as AI increases, efficiency, product quality productivity, and consequently profitability. 

If I had the gift of prophecy, I would say that like the mythical bird Phoenix is said to rise from the ashes, aviation will emerge in a re-invented and renewed format – sooner than later; and this time more robust and more sustainable.

Inderjit Singh, presently an ICAO Aviation Consultant and earlier the CEO of IGI Airport (IGIA), New Delhi, has assessed the performance of the entire aviation value chain, with an eye on the complex data and its critical analysis to decide on the way forward.


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