in Features

The aviation industry in 2021

Posted 5 January 2022

The Founder and Chairman of Avia Solutions Group, Gediminas Ziemelis, takes a look at developments across the global aviation industry during 2021.

Image courtesy Avia Solutions

In light of the critical challenges posed by the COVID-19 pandemic, global airlines have continued to implement and adapt to fast-paced changes that have ensued in the international aviation industry.

The ICAO has worked alongside other industry players to develop strategies for monitoring and managing the associated impacts of the pandemic. This has enabled the industry to maintain a close watch on the COVID-19 associated impacts across the different sectors.

Throughout 2021, the passenger business segment in most airlines has continued to report low returns. Prominently, the industry has noted a decline in the rate of passenger travel, with the global Revenue Passenger Kilometres (RPK) dropping to 26% in 2021 compared to the 50% RPK value for the year 2020.

In comparison, the demand for private jet charters has continued to increase dramatically. More people consider private travel as a flexible, unrestrictive, and low-risk alternative to commercial airlines. Available reports indicate that the demand for charter travel has increased by over 53.5% to reach a new record high of 4.2 million private jet flights this year.

Against expectations, the air cargo business has remained a strong foothold for many airlines in 2021, reporting a remarkable 13.1% growth in global Cargo Tonne Kilometres (CTK). This figure has surpassed the World Trade Organisation projections, which estimated an 8% increase in world trade from the aviation sector in 2021.

The air cargo business has also gained from unusual situations, such as the one experienced in the Suez Canal on April 2021. Following the blockage of the canal, the resulting stranding in the waterway disrupted global supply chains by halting the movement of goods between the trade hubs in Middle Eastern Countries, Asia Pacific, and Europe. This raised the demand for air cargo services as the market looked for alternatives to deal with the resulting stranding and delays.

In another industry development, airline companies like Qantas and British Airways have decommissioned some of their iconic aircraft from service. This move has stemmed from the need to offset sustained financial losses by reducing spending on maintenance and storage. Affected aircraft include older classic models such as Airbus A320s, B757s and B767s.

Meanwhile, large airlines exit 2021 as the best performers in comparison to their smaller counterparts. While large airlines have implemented mechanisms to offset sustained revenue losses, smaller airlines have remained with no other option than to rely on government cash infusions to stay alive.

The estimated government spending in the global aviation sector since the start of COVID-19 through the last quarter of FY2021 stands at $180 billion. However, some stakeholders assert that increased government support for airline companies has created an unfair playing field in the aviation industry.

While underlying fundamentals have remained weak throughout the year, the aviation industry has not experienced any major mergers or acquisitions in 2021. This is a positive signal that global airlines are gradually coming out of the COVID-19 crisis and are no longer considering "integration deals" as a last resort to remain afloat.

Given the financial damage caused by COVID-19, the aviation industry cannot ignore the cost implications of the pandemic on the human factor – its workers.

Some airport-based workers and pilots have had their working hours reduced, others furloughed, and some have lost their livelihoods completely through layoffs. Reported data indicate that over 58.5% of airport-based workers in Europe have lost their jobs in the past year due to the ongoing crisis.

The industry has also experienced accelerated digitisation, with global airlines actively pursuing technology-supported innovations. Artificial Intelligence (AI) and Augmented Reality (AR) technologies have been critical in optimising airline operations. Currently, over 97.2% of airlines aim for big data and AI, with 76.6% capitalising on these technologies to develop cognitive learning initiatives.

Aviation companies have moved away from legacy infrastructure and begun to adopt cybersecurity systems and hybrid cloud infrastructures. These technologies have provided new ways of addressing persistent security risks, reducing inefficiencies in data processing and management, increasing agility, and building high-performance systems.

Furthermore, the aviation industry has moved towards integrated and Aerosafe training methods. Today, there is an increased emphasis on online training through Zoom and Google Classrooms with current figures indicating more than a dozen online classes compared to less than five two years ago.

The sustainability issue has remained at the centre of ongoing negotiations among aviation stakeholders. The pandemic has imposed more pressure on airline companies to keep up with the greening journey to achieve the sustainability agenda. Primarily, the industry has focused on decarbonising the aviation sector and promoting green technology investments.

Looking to the future, global airlines anticipate an optimistic recovery scenario despite current uncertainties that have engulfed the entire aviation industry. IATA predicts that the industry will continue to witness losses of up to $12 billion in 2022, a 78% drop from the losses incurred this year due to the COVID-19-related effects.

Industry experts, however, fear that should the COVID-19 crisis prolong, this may culminate in the entrenchment of habits, promoting alternatives to air travel such as virtual business practices. These practices may further complicate the recovery processes.

On the plus side, COVID-19 adversity has compelled airline companies to innovate, accelerate their efforts towards sustainability, and think creatively, which, if done correctly can ultimately translate to improved performance, greater transparency and increased profitability.



Other Stories
Latest News

Babcock increases support on UK’s Dreadnought programme

Babcock has been awarded two further contracts for work on the UK’s new Dreadnought Class submarine worth a combined £121 million.

Farnborough Airport named FBO of the Year

Farnborough Airport announces that it has won the prestigious title of FBO of the Year at the Air Charter Association (ACA) Excellence Awards 2023.

Hadean and Faculty AI join forces to create next-generation AI capabilities

Spatial computing company, Hadean, and AI solutions provider, Faculty AI, have agreed to team up and accelerate the advancement of AI integrations for defence, security, and national or international governance.

UK Government launches AMP

Plans to build on British excellence in advanced manufacturing to secure long-term private investment and create high-paid jobs have been unveiled in the Advanced Manufacturing Plan (AMP), by UK Business Secretary Kemi Badenoch,

UKSA awards grant to Airbus to develop Space Catalyst in Stevenage

Airbus Defence and Space in the UK has been awarded £3.9 million from the UK Space Agency (UKSA) to create a space and connectivity catalyst at its headquarters in Stevenage.

Griffiths Farrans JV awarded Bristol Airport transport hub contract

Griffiths Farrans JV has been awarded a contract to deliver a transformational public transport hub as part of Bristol Airport’s largest capital project ever.

ODU SK0106300622
See us at
DVD BTSpace Comm Expo BT