The past couple of years have thrown disruptions galore at air transport companies. New variants of the COVID-19 virus continued to wreak havoc on the air industry, with continuous government policy changes around travel restrictions and testing coming after little to no air travel at all. Customer confidence took a hit, and airlines lost their ability to plan and operate conventional schedules. The impact on revenues and finances has been severe.
The air transport industry needs to recover. The bounce-back began in 2021, with global passenger numbers up almost 30% to 2.3 billion. However, this was still only around half of 2019’s 4.5 billion travelers. According to the International Air Transport Association (IATA), it will be 2024 before passenger figures return to 2019 levels. KPMG research estimates that the industry's financial performance is improving but still troublesome: 2021 saw global airline losses of $51 billion, which, while a marked improvement on the $137 billion loss of 2020, is still the industry’s second-highest loss on record.
So, the airline industry looks ahead with considerable uncertainty. Can aviation recover effectively and continue, and ideally exceed past growth levels? And if it is to recover successfully, how will digital technology impact the future of aviation?
Other challenges remain
Government policy around travel restrictions remains inconsistent around the world, making it hard for air transport companies to make long-term plans and drive improvements. In addition, airlines must overcome the issue of slots at congested airports, and whether or not they should be forced to take these slots despite much lower demand for seats on those flights. This raises the prospect of being forced to operate “ghost flights,” dramatically under-populated flights that are highly environmentally unfriendly.
Airlines have also been bailed out by governments during the past couple of years, to the tune of over $240 billion, meaning they must live with much heavier debt in the years ahead. On top of all that, supply-chain challenges still exist, and fuel prices have risen to their highest levels in about four years. Airlines need to look for innovative solutions and approaches wherever they can find them.
Digital can help airlines get flying again
Digital technologies can play a significant role in helping the airline industry on its way to recovery. According to SITA’s recent 2021 Air Transport IT Insights, IT budgets in the airline industry remained largely static in 2021, but that’s set to change in 2022. Some 84% of airlines and 81% of airports told SITA, the world's leading specialist in air transport communications and IT services, that they expect to spend at least as much or more in 2022 than they did in 2021. One of the key drivers behind this investment is creating a more streamlined and digitally-enabled passenger journey designed to boost confidence and enhance convenience.
SITA’s research identified several key areas for investment in digital by airlines and airports, with a focus on how to digitize traditional or manual practices. Many airlines are considering automating passenger health verifications: 51% plan to convert passenger health verification to mobile app format, and 45% have invested in kiosk-based health checks. It demonstrates a commitment to digitizing something that is both time and resource consuming. In 2021, staff across 81% of airlines had to carry out manual verifications of health certificates in paper or scanned formats.
Airlines are also continuing their investment in passenger self-service via mobile services, unassisted bag drops, boarding gates and bag notifications. All are designed to make passenger journeys quicker, safer, more contactless and more convenient.
Biometric passenger identity management is another growth area intended to make passenger experiences safer and more efficient. The survey found that 74% of airports are now investing in biometric identity management solutions, and the technology is rapidly gaining acceptance with travelers. The IATA found that 73% of passengers are now willing to share their biometric data to help improve airport processes, versus 46% back in 2019.
What other tech trends are coming to aviation?
Zero-touch is likely to increase its presence along the total passenger journey, including onboard the airplane. Some airlines have now updated their inflight entertainment (IFE) to offer contactless experiences and even offer bring-your-own-device (BYOD) models. Passengers will be able to pair their personal mobile devices with seatback IFE screens via the in-flight Wi-Fi and on-screen QR codes, enabling them to navigate the IFE system from their smartphones or tablets.
Artificial intelligence (AI) also promises to have a big impact on the air transport industry. In passenger experience terms, AI can help repair damaged consumer confidence by delivering an increasingly frictionless and personalized experience. Chatbots can streamline customer service, providing information on future flights, assistance with check-ins and resolutions to basic passenger queries.
AI and machine learning (ML) can deliver ticket-pricing optimization to help airlines maximize margins. Flight ticket prices are typically based on several factors, including fuel prices, flight distance, time of purchase, competition and more. These factors change daily, meaning airlines must continually adapt ticket prices in response. AI and ML tools can be used to analyze past data and predict demand based on multiple indicators.
Through predictive maintenance, AI can also help airlines reduce delays, cancellations and costs. McKinsey estimates that around 30% of total airplane delay times are caused by unplanned maintenance. This has a knock-on effect on passenger satisfaction and confidence, as they end up stuck and stranded in airports.
Sensors deployed on aircraft engines and other areas can gather data in real time and make predictive maintenance possible. Identifying possible malfunctions and proactively replacing parts can help airlines reduce expenses and, significantly, passenger delays and disruptions. According to research by McKinsey, the global travel industry stands to gain over $400 billion per year in efficiency gains through wider deployments of AI.
The sustainability factor
Using digital technologies to improve sustainability is another key goal for aviation companies. As such, 56% of airlines told SITA that they are now implementing new technologies designed to improve sustainability. Many are investigating how digital solutions can help them reach sustainability goals and reduce carbon emissions.
Data is powering sustainability initiatives, with new practices like data-driven flight path optimization helping airlines enhance in-flight efficiencies and reduce fuel consumption. SITA found that 69% of airlines now have IT policies in place to reduce paper consumption and printing or to assist passengers in not needing printed outputs. Some 52% of airlines say they are planning to implement pro-green selection criteria for external data center providers, prioritizing those that have carbon neutral, renewable energy sourcing or other environmental considerations in place.
Onwards and upwards
The air transport industry has been through a troublesome time, but there are reasons for cautious optimism for 2022 and beyond. Airlines have learned some tough lessons from the past couple of years, perhaps most notably about the need to be as nimble and agile as possible. Greater use of digital technologies and AI will empower airlines to work smarter, more efficiently and more effectively. It will help them enhance the passenger experience and deliver momentum to the aviation sector.
Orange and SITA have worked in partnership since 2001 to deliver best-in-class technology and innovation to the aviation industry across passenger operations, flight operations, air-to-ground communications, airport management and operations, baggage operations, transportation security, border management, cargo operations, and more. To learn more, download the SITA Air Transport IT Insights 2021 report.
I’ve been writing about technology for around 15 years and today focus mainly on all things telecoms - next generation networks, mobile, cloud computing and plenty more. For Futurity Media I am based in the Asia-Pacific region and keep a close eye on all things tech happening in that exciting part of the world.