The International Air Transport Association (IATA) released its financial outlook for the global air transport industry, showing that airlines were expected to lose $84.3 billion in 2020 for a net profit margin of -20.1%. Revenues would fall 50% to $419 billion from $838 billion in 2019. In 2021, losses are expected to be cut to $15.8 billion as revenues rise to $598 billion.
“Financially, 2020 will go down as the worst year in the history of aviation. On an average, every day of this year will add $230 million to industry losses. In total, that’s a loss of $84.3 billion. It means that—based on an estimate of 2.2 billion passengers in 2020—airlines would lose $37.54 per passenger. That’s why government financial relief was and remains crucial as airlines burn through cash,” said Alexandre de Juniac, IATA’s director general and CEO.
There is no doubt that the year 2020 will go down in history books as the air transport industry’s most turbulent year till date, with massive fluxes in passenger volumes globally due to the pandemic. Government-imposed travel bans and nationwide lockdowns during the first half of the year were not enough to prompt travellers to return to the skies when things eased. After showing some positive signs over the northern hemisphere in the summer months, global passenger traffic at the end of November 2020 slumped back to 48% year-on-year (YoY) from 2019, according to data shared by SITA, the IT provider for air transport industry, delivering solutions for airlines, airports, aircraft and government data. Regaining passenger confidence has become a critical factor for airlines to weather the ongoing economic storm.
David Lavorel, CEO of SITA, at airports and borders, predicts a smarter, safer and more sustainable travel industry fit for the people and planet. He says, “Despite the bleak travel outlook for the 2020 holiday season in western countries, there are reasons to be hopeful for 2021. Fringe and emerging technologies that were sidelined during the previous decade of industry growth are now being examined with fervent scrutiny to evaluate their efficacy in solving crucial Covid-19 challenges.” For example, Health ETAs (Electronic Travel Authority), where electronic verification of a passenger’s health status is required upon entry to a country, look set to be commonplace by 2022. Their usage will become standardised as new vaccines are made available in 2021.
At the same time, increasing passenger safety, boosting passenger confidence and making airport and airline operations significantly more efficient, adaptable and intelligent is the new blueprint for survival and growth. “From head-mounted thermal scanning devices to technology-supported social distancing measures, new technologies have seeped into airports and changed the passenger experience. That pace of innovation adoption sets the scene for rapid industry transformation over the next few years and will force a historically slow-moving industry into action,” says Lavorel.
The digitally optimised traveller experience makes use of facial recognition and touchless technologies, embedded in various self-service devices. Automation and biometrics will become the norm rather than the exception at leading airports globally in the next few years. SITA implemented Smart Path self-service biometric and mobile technology and automated the outbound passenger journey at several airports, including Beijing and Miami. This means a walk-through airport experience, where passengers can simply use their face as their boarding pass and walk from the taxi to the plane. Improved processing efficiency means less time in queue and more social distancing for all passengers.
In November 2020, SITA announced a trial with Etihad to use facial recognition technology to identify and authenticate crew members, allowing them to complete check-in procedures and mandatory pre-flight safety and security questions digitally via their own mobile devices. The new initiative has replaced a kiosk-based check-in process which required crew to use their staff identity cards as a form of authentication.
Passenger flow management technologies provide real-time passenger monitoring and actionable insights for airports to understand and manage passenger movement throughout the airport. It will become a necessity to proactively manage crowd density and social distancing during daily operations, as well as longer-term planning.
Innovation in software defined networks (SDN) is also enabling more resilient and agile airport operations that can respond to the changing demands of travel during and post-pandemic.
Machine learning algorithms detect patterns and learn how to make predictions and recommendations by processing data and experiences rather than by receiving explicit programming instructions.
Digital Travel Credential (DTC) is being explored and progressed by key industry bodies like the International Civil Aviation Organization, a specialised agency of the United Nations. The benefits of using self-sovereign identity include lower financial transaction costs, protecting people’s personal information, limiting opportunity for cybercrime and simplifying identity challenges in various fields, including travel, healthcare, banking, IoT and voter fraud.