At this time last year, the International Air Transport Association (IATA) declared that the global aviation sector had fully recovered from the impact of the pandemic, seeing how passenger traffic and revenues recorded in February 2024 already surpassed the total from 2019.
However, there seems to be a reversal of fortunes in global aviation: over the past 12 months (and, indeed, the past few weeks alone), we’ve seen several airlines terminate their operations or whose assets have gone into administration.
Just last week, Qantas Group announced the closure of Jetstar Asia; while Silver Airways in the US was bought out and its new owners shocked passengers through the immediate cessation of flights.
Given how a significant number of these closures have involved low-cost carriers (LCCs) which have, over the past decade, been responsible for the massive surge in commercial passenger traffic, could these closures have a significant impact on the world of commercial aviation?
First of all, why are companies shuttering their airlines?
Industry professionals attending this year's Paris Air Show which runs till Sunday, 22nd June, have gone on record to say that there is a great deal of tension in the air at the event.
While it's understandable in light of the recent airstrikes seen in the Middle East which led to the shuttering of the Israel Aerospace Industries (IAI) booth by the French government, as well as the disaster that was Air India Flight 171, the recent closures of Silver Airways, Jetstar Asia, and THAI Smile have made professionals wonder if the global aviation sector needs to do some considerable rethinking on the corporate side.
Running an airline means getting involved with a business that calls for substantial investment for constant innovation, a significant amount of manpower, and an equally significant outlay for operational expenses.
Costs are definitely a cause for concern, given how the industry is known for its high fixed and variable costs, especially where fuel, human resources, and maintenance are concerned.
At the same time, especially following the reopening of the world post-pandemic, competition in the industry is fiercer than ever, and this can seriously impact the prices airlines offer to potential passengers, as well as their overall bottom line.
Also, external factors need to be taken into account: public health issues like pandemics rank high among these as they lead to the closure of international borders; international armed conflict is another, along with environmental factors such as greater turbulence and stronger storms that have resulted from climate change.
What needs to be done?
Based on our observations of recent trends in global aviation, we would like to point out several things that airlines may need to seriously consider in order to stay afloat in today's increasingly competitive industry.
First of all, especially in light of air accidents and armed conflict in international airspaces, flight safety and security are the main points of consideration. Admittedly, aircraft maintenance is one of the biggest expenses for any airline, but it is an area where cutting costs may prove fatal for not only for the passengers and crew onboard, but also the airline itself. Inability to safeguard the overall wellbeing of passengers and crew through basic maintenance has been the death knell for several airlines throughout the history of the corporate aviation sector, so constant vigilance and proper investment into relevant modalities are a necessity rather than a mere option.
Second, service matters; over the past several years, one of the more adverse things said about Jetstar Asia was that the quality of its inflight services needed some serious revamping. Experts point out that, in terms of service quality, there ought to be no difference between that offered by the crew of a full-service airline and that of an LCC. While there can be disparity with regard to amenities offered, treating passengers with cordiality and compassion is something many people keep an eye on when flying. That said, maybe airline need to rethink their training strategies for their inflight crews.
Third, could codeshare agreements be in your airline's future? Tying up with other key players in the industry has enabled a number of airlines to expand their offerings without too great an outlay on fleet or network expansion. Codeshare agreements also serve to promote airlines to their partners' core markets, and this also cuts down on marketing costs.
Fourth, innovation is always key. Staying abreast of current trends in the industry is all well and good, but if you're not looking into these to boost the performance of your airline, then you need to rethink your strategy. Going back to item number one on this list, innovation is also a way by which airlines can boost the overall safety of their aircraft, on top of fuel efficiency, speed, and passenger comfort.
And speaking of fuel efficiency, sustainability and environmental adjustments come in fifth on our list. While the use of Sustainable Aviation Fuel (SAF) is still in its early stages and the cost of both production and procurement remain considerably expensive, it will go a long way in terms of improving engine flight performance on top of reducing an airline's carbon footprint. Also, with regard to item number four on innovation, taking environmentally-driven design will also be a key consideration in the future, protecting aircraft from the buffeting of severe turbulence and more intense weather conditions.
