It’s not been an easy few years for the aviation industry. Rising fuel costs, staff shortages and a fragile economy have all impacted flying, resulting in a number of airlines going bust, forced to up prices or weather the storm as consumer demand for flights drops.
As we enter 2013, what are some of the challenges that both airlines and airports could face?
1.) Improving efficiency. Airlines are turning to any method they can think of to banish airline delays — including crowdsourcing and computer algorithms — but running down the security gauntlet, dealing with paperwork and procedures as well as the delights of the border can not only frustrate the customer, but limit the amount of available time slots for planes to take off.
Airports are becoming congested and security is at an all-time high, so management now face an uphill struggle; keeping the business in profit, maintaining security, coping with increased competition and of course, the ever-present threat of adverse weather conditions.
Delta is one airline who is bidding for more business travelers to shore up the bank balance, not only by looking at efficiency measures and potential cost-cutting, but by adding an additional 100 flights to and from La Guardia to take a bigger slice of the market-share pie.
2.) Security. Keeping passengers safe both in the airport and while flying remains paramount, especially in the wake of events including September 11. However, going beyond miniature liquid bottles and taking your boots off at security checkpoints, the introduction of full-body scanners has caused much controversy.
Some airports will not let you fly if you refuse the scan, whereas others have removed the technology completely not only due to privacy concerns — but because they slow down the security process to unacceptable levels. At some point, an acceptable balance between security and viability has to be achieved.
3.) In-flight connectivity. As modern technology makes instant connectivity and Wi-Fi an expectation of the modern consumer, transport businesses are having to keep up. London taxis have begun offering Internet access in return for watching adverts, and what’s to stop airlines from offering connectivity on flight?
Not that much, although the use of gadgets and Internet services are still in fledgling stages when it comes to aviation. When money is scarce and belts are being tightened, it is becoming increasingly important to offer these services — as Emirates does — especially if you want to entice the deeper pockets of lucrative business travelers. At least, so the FCC believes.
4.) Safety in the air. While travel by air safety is reportedly the best its been since the 1960s, with only 23 documented fatal crashes in 2012 and the development of tools to predict weather conditions, there are still concerns when it comes to the higher crash-rates of Latin America, Africa and developing regions. In addition, U.S. pilots are under scrutiny, as cockpit automation and increasingly congested airports may prove to become hazards.
5.) New fuels. Biofuels, renewable energy sources derived from biological material, can be used as a replacement for traditional fossil fuels. However, the sheer quantity and expense in production due to the industry’s young age means that it is not necessarily financially viable to launch commercial projects for airline carriers. Not only this, but commercial projects also have the potential to exacerbate food shortages in developing countries.
However, some airlines, including Cathay Pacific, have joined the Sustainable Aviation Fuel Users Group (SAFUG) to try and get these kinds of projects moving — as the rising cost of dwindling fossil fuels is fated to rise.
6.) Going green. It is not just biofuel development and the impact on the environment that are impacting the aviation industry, but airlines have had to cope with the introduction of legislation which would tax them based on carbon emissions.
The European Commission said it planned to charge planes based on greenhouse gas emissions if they landed in EU member states, although this was suddenly suspended in November. So, legislation isn’t too taxing for now, although airlines have argued that such measures could cost them upwards of $8 billion in the next eight years.
When the International Air Transport Association (IATA) committed itself to carbon-neutral growth by 2020, you know the issue’s becoming serious.
7.) Innovative plane design. A key question on airline management’s mind: how do you keep flying cost-efficient and profitable, especially when rising operating costs — including fuel and taxes — impact the balance sheet?
Cutting weight off craft is one way, which saves not only fuel, but may mean you can pack in another row of seats or two. Some of the methods airlines have employed include replacing bulky flying manuals with mobile devices including iPads and Windows 8 tablets, as well as new hybrid designs with elements including foldable wings that reduce fuel consumption.
However, altering a plane’s traditional design can also be used to appeal to particular markets, as a concept plane from RKS shows. Taking it a step further than AirAsia, where passengers can book seats in ‘quiet zones’ without children under 12 being allowed, RKS came up with the idea of a plane designed purely for families with their wailing, seat-kicking bundles of joy.
8.) Consumer demands and the willingness to pay. Average ticket prices have jumped 10 percent in the last several years, potentially turning off consumers that can reach their destination in other ways. However, we can probably expect this trend to continue in 2013 — especially as some governments have begun increasing passenger duty by up to 50 percent. However, as costs rise, standard airlines may find themselves abandoned in favor of the budget-airline niche carriers such as Ryanair.
9.) Bringing airports and airlines into the 21st century. From printing your own baggage labels at home to avoid check-in, booking online or showing your e-ticket to check-in staff when you arrive, flying is now a different scenario from showing a passport and receiving a ticket in the post. However, if airlines are going to survive, they need to do more than simply invest in new tech — they need to make their businesses better.
Delta, for example, is a successful example of how to survive in today’s tough environment. Refurbishing and purchasing older craft other airlines don’t want in order to avoid debt, purchasing oil refineries to bring fuel costs under control and using non-union labor are some of the firm’s best profit-keeping methods.
10.) Finding staff. It’s not all about the technology. According to reports, airlines are finding it increasingly difficult to find and train up pilots, sending the industry into panic. New federal regulations coupled with a compulsory retirement age for pilots in the United States have contributed to the shortage — no doubt a severe headache for management in the coming year as half of U.S. pilots are already over 50.
Image credit: Rob Brewer