Air lift
Although the aviation industry has been one of the hardest hit sectors during the pandemic, adversity has also brought innovation.
In recent months we have seen the industry adapt to reduce its reliance on steadily growing passenger numbers in several ways:
Leveraging other revenue streams
Fuelled by the growth in e-commerce, cargo revenue grew in 2020, compared to passenger revenue, which halved. This means that cargo now contributes a quarter of total industry revenues, doubling its normal share.
Some airline groups, like IAG launched cargo operations in 2020, and some have gone as far as removing passenger seats to make room for freight, including PPE. The COVID-19 vaccine is also being shipped this way through a number of CEIV certified airports, including our client, Brussels Airport.
Make use of the space
The vast – and now largely empty – spaces that commercial hubs including airports provide are ideal to set up large scale test and vaccination operations.
Over the Christmas period, the Test Centre at the airport in my home town of Hamburg was full of travellers seeking tests after arriving in Germany, but also citizens who were getting tested to limit the risk of the small amount of household mixing that was allowed over the Christmas period.
Market products digitally
There have long been notions of digitalisation in the airport world: In 2019, 14% of all retail was purchased online, which is set to increase to 22% by 2023.
The pandemic has accelerated this trend, with players operating existing marketplaces in many cases opening the offering up to local residents for domestic home delivery (e.g., Frankfurt Airport and Changi Airport), while agile players like Malaysia Airports and Brisbane Airport launched theirs. Remarkably, Brisbane's BNE Marketplace was created in just 16 days!
Forward thinking
As even the most conservative consumers are adopting to digital life, industry players (airports and airlines alike) are preparing for the so-called `new normal'.
For airlines, high-margin ancillary revenues will become more important than ever, meaning that they must look at not just what they sell, but also how they sell it. User touchpoints increase as travel becomes more onerous in the medium term: virus testing, health passport checks, etc., leading to increased complexity, but also opportunity as increasing interplay between historically competing players will be key in creating a seamless user experience which can ultimately lead to a growing bottom-line.
In our opinion, recovery will come, but instead of going back to the old ways, whilst potentially including a few more steps, international travel will become a more digitally streamlined experience for everyone.
Christina Roseler