As aviation looks towards a fourth year where the effects of the COVID-19 pandemic continue to be felt, we sat down with a wide variety of industry experts to look back on how aviation has changed since 2019, what challenges remain, what lessons have been learned, and how aviation is continuing its acceleration towards a sustainable future.
In terms of scale, the industry’s position since 2019 is stark, explains Perry Flint from airline trade group IATA, the International Air Transport Association.
“In 2019 the world’s airlines earned US$26.4 billion and carried 4.5b passengers,” Flint tells us. “Over the next two years, the industry lost a combined $179.8 billion, while enplanements for 2020-21 combined fell to around 4 billion. In 2022, airlines losses are expected to shrink to $9.7b while enplanements reach 3.8b, so while recovery is underway we are still well below the 2019 figure.”
As passenger numbers cratered, the need for cargo carriers to maintain the functioning of global supply chains, distribute critical personal protective equipment, transport lifesaving vaccines and bring the COVID-19 vaccines that saved countless lives across the world was a lifeline — not just for airlines, but for the world.
“Cargo revenues,” Flint says, “totaled around $101b In 2019 but soared to $138.5b in 2020 and $204.1b in 2021. They are expected to decline somewhat to around $191b this year.
Yet, says Alton Aviation Consultancy’s engagement manager Alan Lim, the growth in cargo “has attracted new entrants into the market from outside the industry. One prime example is the entry of maritime shipping companies like Maersk and CMA CGM into the air-freight market through partnerships and acquisitions, to reinforce their shipping network and take advantage of the growing demand for end-to-end logistics.”
Key areas of challenge remain as the industry rights itself
The return trajectory to 2019 levels continues to pose a number of challenges, as consultancy AirInsight Group’s partner Addison Schonland highlights.
“We see two key items impacting materially: the pilot shortage and rising traffic,” Schonland summarises. “Airlines need, a bit desperately, to deploy larger aircraft — it’s physics: bigger planes are the solution. Consequently, we also expect to see widebodies be brought back for shorter routes.”
Elsewhere, says IATA’s Flint, “some airports that downsized staff during the pandemic were not prepared for the rapid recovery in air travel this year. In extreme cases, these airports have actually limited the number of flights airlines can operate.”
Flint also cites the supply chain constraints, manufacturing issues, technology problems and related issues that have hit airframers’ attempts to return to higher levels of delivering new aircraft — and, crucially, their engines.
And of course, some OEMs have been coping with supply chain shortfalls and manufacturing and technology-related issues that has slowed the delivery of new aircraft and engines.
Alton’s Adam Lim also highlights that airline debt is becoming a looming issue: “to ensure their own survival, airlines have taken on significant debt (IATA estimates over US$100b) to weather the pandemic, while also deferring many upcoming capital expenditure commitments such as fleet purchases. These would need to be serviced and fulfilled in the coming years, leading to higher cash outflows on average compared to before COVID-19.”
“At the same time,” Lim notes, “several major airlines have also gone through a restructuring process during the pandemic. This has allowed them to shed less favourable long-term agreements and emerge stronger in the post-COVID world. Regardless of the situation, there has nevertheless been a greater focus on cost management since the pandemic among all players across the value chain.”
One key lesson learned — or, more accurately, learned by some and reinforced for others — by the aviation industry is just how beholden it is to externalities. Government actions around closing borders and implementing mandates (for tests, masks, vaccines, quarantine, et cetera) were taken in a way that many in the industry, including IATA’s Perry Flint, would classify as errors.
Governments, Flint argues, “compounded that error by not coordinating among themselves or consulting with industry in restricting travel and imposing various health requirements. At the peak of the crisis, our TIMATIC system was registering hundreds of changes daily to entry restrictions.”
TIMATIC is the widely-used IATA system designed to manage visa and other entry requirements, and was used to manage pandemic-related requirements including testing, vaccination and isolation.
“How,” Flint asks, “could travelers have any confidence when purchasing a ticket when rules were changing literally on a daily basis?”
As the industry looks to the future, it is an inherently digital one
COVID-19 is often referred to as a great accelerator of technology, as aviation and other industries adopted a range of new digital tech at a speed never before seen. Whether it’s hybrid working for corporate staff, remote digital-enabled maintenance oversight, or even just the now-ubiquitous videoconference, the prospects for the industry of 2023 are markedly different to that of 2019.
“Digital transformation also encompasses technical operations,” IATA’s Flint emphasises. “The pandemic, which dramatically reduced opportunities for face-to-face exchanges, greatly accelerated the drive towards digitalization along with development of innovative data-exchange concepts including such as things as digital parts traceability and documentation, digital signatures and electronic maintenance record keeping.”
Everyone and everything that travels by air — whether passenger or cargo — will benefit from digital innovation. Passengers will see a streamlined airport experience, with much of the formalities completed over their phone or tablet before they even leave home. Electronic cargo operations like e-freight and e-airway bills will do the same for cargo.
In this near-term digital future, says Alton’s Alan Lim, “from the passenger perspective, such initiatives would include the push towards personalisation, with the aid of analytics, in order to deliver the right offer at the right time to the right customer, the use of AI-based chatbots to relieve the workload of human call agents, and the use of mobile and biometric-based tools to simplify the passenger’s airport journey.”
More widely, as more and more aircraft are sensor-enabled, and more systems interact with each other to create yet more data, the sheer size and scale of this data opportunity is almost immeasurable. A key challenge for aviation is understanding, processing, analysing and acting on this massive amount of data.
As some of the early wins here, says Lim, “Examples of such initiatives would be driving maintenance to be more real-time and predictive, to allow for proactive maintenance to reduce aircraft downtime and lower maintenance costs. In addition, the use of historical, and increasingly real-time data, to optimise flight planning both before and during the flight, will enable both fuel and cost savings for airlines. These are but a few of the many use cases where data can be used to improve operations, reduce costs, and achieve the sustainability goals that the industry has set for itself.”
Those sustainability goals, too, are a critical — indeed existential — goal for aviation to reach. The industry has much work ahead of it as it focusses on becoming a net zero carbon emitter over the next three decades to 2050, but with a variety of new technologies at its disposal and an immense amount of will, aviation’s future is a bright one.
Author John Walton
Published 24th November 2022
Lead Photo by Tushar Sachde on Unsplash
