RESEARCH REPORT
Charting aviation’s path to reinvention
10-MINUTE READ
May 30, 2024
In brief
- The aviation industry is undergoing a profound transformation with a focus on convenience, sustainability and resilience.
- Aviation companies need to reinvent themselves to build a future that is both sustainable and innovative.
- To achieve this, they must focus on four key areas to future-proof their organization.
The aviation industry is undergoing a profound change.
The aviation industry is fundamentally reinventing the air travel ecosystem to enhance convenience, sustainability, and resilience amid a rapidly changing global landscape.
Technology plays a crucial role as both an enabler and driver of this transformation, reshaping the traveler's experience and addressing operational challenges.
We’ve interviewed 300 aviation industry leaders to find out where they see the largest challenges and opportunities, and the steps they’re taking to address those. Here’s a glimpse into the future of Aviation:
70%
of executives expect to see revenues from new business models increase in the next six months
66%
of companies say they’ll partner with non-travel companies to provide new products and services to customers in the next six months
85%
of companies surveyed are confident or very confident in the aviation industry’s realization of net-zero goals by 2050
Underpinning all these focus areas is the necessity to make technology the foundational engine of reinvention. This requires the development of a strong digital core. That means integrating the power of cloud, data and artificial intelligence (AI) to create an interoperable set of secure, flexible platforms. This core will enable companies to rapidly create new capabilities and growth opportunities for the enterprise. It will power reinvention, including transforming talent and workforce capabilities.
01 Getting new revenues off the ground
Revenue
70%
expect revenues from new business models to increase in the next 6 months.
With costs set to rise, aviation leaders need to maximize efficiency while driving revenue from new business models and partnerships. There is a need to explore alternative revenue sources, such as unlocking offer/order and new distribution capabilities, retail within airlines and airports, and innovative partnerships. The use of data-driven insights to shape personalized and targeted consumer offers will also be crucial.
02 Making customers first, last, everything
Customers first
92%
of aviation leaders believe that the digital experiences they offer are at least as good as those from online retailers.
Airlines and airports have intensified their focus on deploying digital technology, including gen AI, AR/VR, robotics and automation to enhance the entire passenger experience and to transform back-end operations. Today, new methods of trip planning, searching, booking, retailing, and Gen AI-enabled customer service are being pioneered to elevate the customer experience. Modern technologies are being harnessed to enhance operational efficiency and safety standards—from use of robotics for baggage handling, AR/VR for predictive maintenance and pilot training, to digital twin and predictive analysis to improve resource allocation and to streamline passenger flow for safety and efficiency.
03 Sustainability: the must-reach destination
Sustainability
64%
of companies will increase their focus on sustainability in the next six months.
Airlines and airports alike are committing to net-zero operations, with an ambition to achieve net-zero emissions by 2050. Industry stakeholders are investing in innovative technologies, adopting sustainable aviation fuels (SAF) and optimizing operational efficiencies.
However, the global nature of the industry complicates efforts to establish uniform regulatory frameworks and emissions reduction strategies across regions. Additionally, the sector’s heavy reliance on fossil fuels, coupled with aircrafts' lengthy lifespans, demands a holistic approach to fleet renewal and technological innovation.
Collaboration between airlines, airports, manufacturers, and policymakers underscores a concerted drive toward sustainable aviation, emphasizing fleet modernization, improved air traffic management and adoption of carbon sequestration techniques.
04 Workforce and talent: building skills for the future, today
Workforce and talent
98%
of companies surveyed identified a skills gap in the industry today.
The aviation industry’s workforce and talent needs are changing fast, driven by new technology, changing demographics and the evolving industry. Demand for digital expertise, data analytics, cybersecurity and sustainable practices are in focus, as the industry adopts new technology. Matching the available talent with these specialized skills is proving to be a considerable challenge. Overall, 98% of companies surveyed identified a skills gap in the industry today. There’s also a growing recognition on the need to promote gender diversity and inclusion.
As the aviation industry propels towards the future, it needs to re-wire the talent with new skills that align with the demands of a tech-driven future. Employ the full spectrum of workforce models, anticipate emerging needs for new skills (via visibility into the value chain) and meet those needs through skilling and hiring is the need of the hour. Efforts to promote gender diversity, inclusion and equal opportunities are also gaining momentum.
Aviation’s new flightpath: reinvention
Travel leaders can build on the above capabilities to accelerate their reinvention. Technology, talent and sustainable practices are the fundamentals for a flexible aviation business that constantly reinvents itself to align with consumer expectations and seamlessly navigate future shocks, making the ability to change part of the organizational DNA. Reinvention isn’t a to-do. It’s a to-be; an opportunity to continually reinvent and transcend not only present practices, but also future possibilities.