Air Travel: En Route to New Beginnings

Although every cloud has a silver lining, the airline industry is struggling to find its own silver lining in the empty skies. A pre-2020 recap would indicate the aviation industry to possess strong resilience, having weathered economic crises and the outbreak of SARS within the past two decades. The aviation industry serves as an essential contributing factor to economic development, as it facilitates trade and supports millions of jobs globally. Before the COVID-19 outbreak, airlines were ramping up to serve more passengers by modernizing their fleets to be more fuel-efficient, and by adopting more sophisticated retail strategies to compete with low-cost rivals. Moreover, airlines were experimenting with innovative methods to optimize their seat design to maximize flight capacity, but the current pandemic has rather refocused their strategies towards deciding a certain load factor to break-even, at least before the dust settles. 

Historically, the airline industry has been slow to innovate, both with regards to transforming their businesses using automated digital models and with regards to creating a much-needed, more personalized customer experience. After decades of consumer complaints regarding poor meal service and lack of legroom, airlines long expected a shift in passenger priorities. Consumers preferred airlines to be more digitized when offering their products and services, from an active social media presence to providing mobile access to travel documents. However, given COVID’s impact on global travel and tourism, the more pressing concern for airlines is to regain consumer confidence; given dramatically lower revenues, airlines can only hope to implement lucrative innovations in passenger experience once air travel reaches pre-COVID levels. In the meantime, the planes that used to ferry travellers towards business meetings, conferences, and family vacations now transport cargo instead of tourists. 

As airlines struggle with an uneven and slow demand recovery, aviation leaders have formulated strategies that focus on reducing fixed costs and providing a safe environment for passengers to travel in. To mitigate the risk of viral transmission by minimizing touchpoints, a post-pandemic world for air passenger experience could mean being offered pre-packaged boxed meals and limited version of canned beverages, independent of the cabin class you chose to travel in. To maintain physical distancing, some airlines are flying below capacity, which could mean leaving two empty rows between each airline passenger. If airlines were to block middle seats in an Airbus A320 or a Boeing 737, that would mean flying at a load factor of about 66.7% in a 3-3-3 seat configuration. Hence, a low capacity utilization wouldn’t allow airlines to operate without generating losses, especially before the demand for air travel recovers to pre-pandemic levels. Airlines would be required to make structural changes to their business models while keeping their operations flexible to cover the high fixed operating costs of their large-scale operations. This shows that the urgent need to slow infection rates takes precedence overall, but these solutions are not expected to remain economically sustainable for long, especially when billions of dollars have been spent in recent years in particular to increase airplane capacity.

In addition to reduced flight capacity, airlines are facing a second challenge of increased flight turnarounds. Airlines have had to reconsider their flight schedules to ensure that each aircraft is thoroughly sanitized before the next flight takes off, which decreases the number of flights that can take off per day. Increased turnaround is particularly impactful for short-haul budget airlines that depend on a high volume of flights per day to cover fixed costs. Given the expected expenses associated with increased turnarounds, experts have explored cost reduction strategies, with Electronic Baggage Tags (EBTs) arising as one major cost-saving strategy. EBTs help reduces the need for check-in staff by 50-90%, creating cost-saving opportunities for airlines, and removing the need for physical touchpoints. Moreover, they provide airports with the opportunity to handle four times more bags per hour, resulting in shorter lineups and more effective social distancing procedures. 

The third significant challenge airlines are facing is the struggle of maintaining social distancing and flyer satisfaction standards. In an industry characterized by the quality of airport and in-flight service, airlines need to increase the quality of passenger-robot interaction. Most consumers still prefer human attendants to answer their travel queries, but given cost-saving and social distancing measures, digital service is the only way forward for airlines operating in COVID-19. From airport decontamination to screening temperatures at airports, robot deployments will lead to enhanced passenger flow management and contribute towards a touchless, socially safe environment for airport passengers. Hence, to protect the long-term value of the customer, companies need to focus on automating and augmenting work responsibilities that were previously done manually in a pre-pandemic world.

The pandemic has enforced the airline industry towards a swift adoption of digital technology in its ecosystem and an increased focus on customer experience. Be it providing better sociable robot interaction to customers or reducing operating costs, the air travel industry will be retransformed for the better. The aviation industry has proven to be immune to various crises before, hence, even the current storm cloud will be able to find its silver lining; whether it will be amidst the empty skies or not will be dependent on how passenger demand for flights will evolve. However, the true determinant of the aviation industry’s success will be whether airlines can protect the health of their passengers, and their bottom line.