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The future of the air transport industry
27 June 2018. AASA news.
What drivers of change could shape the future landscape of the air transport industry? We address this question by offering insights from IATA's Future of the Airline Industry 2035 study and the Bombardier Commercial Aircraft 2017 - 2036 Market Forecast report; sharing a video of the future of the airline industry by Gil Michielin, Vice-President of Thales Avionics; and track down some web articles that shed light, predictions and ideas about where the industry is heading in the decades to come.
IATA report: Future of the Airline Industry 2035 highlights
IATA's Future of the Airline Industry 2035 study was commissioned with the aim of helping airlines and aviation stakeholders identify the trends, opportunities and challenges the sector could face in the decades to come. The study, conducted by the School of International Futures, looks at factors and forces (the drivers of change) which may shape the air transport industry, and how external forces such as geopolitics, technological innovation and environmental concerns could shape aviation and the airline industry’s future terrain. Here are some key drivers of change, assessed as having greater than average impact and uncertainty, identified in the report:
- Alternative fuels and energy sources;
- Environmental activism;
- Extreme weather events;
- Geopolitical (in)stability;
- Infectious disease and pandemics;
- International regulation of emissions and noise pollution;
- Level of Integration along air-industry supply chain;
- New modes of consumption;
- Price of oil;
- Strength and volatility of the global economy;
- Tensions between data privacy and surveillance;
- Terrorism; and
- Intra-Regional routes will remain the core of the market. Download the Future of the Airline Industry 2035 report for more.
Airline manufacturers and airlines themselves will continue to exploit significant energy savings over the next 20 years from a wide range of new technologies, including better airline engine design, lighter composite fuselage, and more direct aircraft routing. Efficiencies will be gained from fuller planes, faster turnaround, and the consolidation of smaller airlines.
Patrick Dixon, Chairman of Global Change Ltd
Bombardier 2017 - 2036 market forecast highlights
The Bombardier Commercial Aircraft 2017 - 2036 Market Forecast provides an industry outlook over the next two decades by determining the long-term effects of market drivers such as managing the increasing demand for air travel; financial sensitivity to geopolitics and winds of change. Here are some key trends from the market forecast that could shape the future of the commercial aviation sector:
- Intra-Regional routes will remain the core of the market. Intra-regional traffic to grow at 5% CAGR.
Intra-regional routes account for around 80% of global traffic.
- Airline fleet decisions are evolving from capacity-driven to profit-driven. Falling yields are driving increased profit focus. Airlines will observe capacity discipline to achieve higher profits per passenger. Right-sizing will be a critical component in profit optimization.
- Small Regional Aircraft segment erosion will have a ripple upgauging effect. Almost all regional jets in the small regional aircraft segment will upgauge due to lack of options and regional pilot shortages. In mature markets, direct replacement with small narrowbodies will occur. By 2036, less than 400 aircraft will remain in this segment in the global fleet.
- Large Regional Aircraft segment will continue to penetrate short-haul routes. Mature markets effectively utilize large regional aircraft to optimize profits on high-yield routes. Turboprop productivity and fleet utilization has increased over the past decade. Regional jets remain critical to hub-and-spoke networks and will replace a sizeable portion of smaller regional jets.
- Small Single-Aisle Aircraft segment will facilitate airline network optimization. This segment will increase point-to-point flying on short- to medium-haul routes. 86% of the current fleet in this segment will retire by 2036. New and thin routes will be profitable using aircraft in this segment. Download the Bombardier 2017 - 2036 market forecast for more.
Airlines are shifting their primary metric for network and fleet optimization strategies from ‘cost’ to ‘profit’. With this thinking at the forefront, more airlines are investing in right-sized aircraft that maximize their profits. Lower oil prices may permit airlines to delay the replacement or retirement of less efficient aircraft, but in the long-term, fuel efficiency and environmental footprint will remain key drivers of airline fleet decisions.
Fred Cromer, President of Bombardier Commercial Aircraft
Watch the future of the airline industry by Gil Michielin, Vice-President of Thales Avionics on YouTube:
- The future of aviation: a definitive guide to the next 20 years. 31 May 2017. International Airport Review.
- The future of aviation: Airline leaders' predictions. 1 January 2014. USA Today.
- Future Of Aviation Industry - Radical Change. Patrick Dixon. GlobalChange.com.
- Five Key Trends Affecting Commercial Aviation for the Next 20 Years. 12 September 2017. AviationWeek.com.