How Digitization Could Help Accelerate Aviation Industry?
Published on : Friday 01-05-2020
With the Covid-19 pandemic continues spreading across the world, the airlines, international and domestic, fully grounded off. The International Air Transport Association (IATA), on 14 April 2020, released an updated analysis that shows the Covid-19 crisis will see global airline passenger revenues drop by $314 billion in 2020, a 55% decline compared to 2019. In Asia Pacific, Airlines will see the largest revenue drop of $113 billion in 2020 compared to 2019, and a 50% fall in passenger demand in 2020.
Airport revenue generation is directly linked to traffic levels. Due to the flight bans and cancellations, numbers of flights traveling become less, and even less aeronautical revenue coming in. Unlike other players in the aviation industry, when traffic demand falls, airports have limited ways of lowering costs. This is why the industry is showing interest to move towards digitization.
Recently, a virtual event ‘FlightPlan,’ hosted by Inmarsat in collaboration with the Airline Passenger Experience Association (APEX), set out to look to the future of the industry. As the event was discussed many viewpoints and insight, Inmarsat raised a key point regarding the role of digitization could play in the revival of aviation.
In this way, Rupert Pearce, CEO of Inmarsat, said that “I believe that digitalization lies at the heart of our abilities first survive this crisis and then to drive our ability to rebound from it and start to thrive in whatever new reality lies in front of us. I believe that those who fully embraced the power of digitalization now will be best placed to emerge quicker and stronger than their peers. Why? Because digitalization drives greater business efficiency and effectiveness, greater autonomy and automation, higher quality business intelligence, and above all, better customer intimacy and engagement.”
Pearce further highlighted the difficulty of the merchant maritime industry, which was hit hard by the global financial crisis. It was the deepest recession faced by the industry since the 1930s, putting companies to struggle with high fuel costs, inherent oversupply and stagnant demand.
Since the previous crises like SARS and the 2008 financial crisis that all demonstrated a significant recovery back to the pre-crisis growth path, Covid-19 has brought an entire global crisis of unprecedented magnitude. In this scenario, the industry needs to consider with some different angles to recover from it, as the pandemic already slowed levels of air traffic and will continue to slower growth, even after the crisis.
Therefore, digitization is one of the ways to cope with the virus effect in the aviation industry. We believe embracing disruptive technologies and taking advantage of connectivity could be effective in such a crisis. This will help create effectual decision making capability across the industry.