The devastating impact of the COVID-19 crisis on the aviation sector marks yet another turning point in the continuous transformation of the industry. The implications this time, however, are much bigger and more severe than after the financial crisis in 2008 or September 11 in 2001.

This time, change will not be restricted to balance sheets or more advanced security screenings at the airports. Instead, change will come to every corner of the terminals, the lounges, the gates, the cabins – and it will redefine the hospitality sector as well as the traveler experience at airports and on board. Why? Because behavior and mindsets of people are changing.

For many airline passengers, protecting their health is now more important than pampering themselves. This won’t change for many months and years to come; maybe, the aviation sector will never return to where it was before the pandemic. Airlines, their service providers and airports must now focus on new ways to safeguard the health of their employees and travelers. In some countries, such as France, it is now mandatory to be either tested, vaccinated or show a proof of recovery from COVID-19 on domestic flights. Other countries are going even further: In Canada, travelers without vaccination will not be permitted to board a flight. Many other countries are currently discussing similar actions.

These new health and safety requirements together with changing passenger attitudes are forcing airlines to come up with new value propositions. However, new regulation and customer expectations around health should not solely be seen as a necessary evil; they can also help airlines to differentiate from the competition. On the planes, we are going to see new cabin layouts and reduced seating capacities. There will be more touchless options instead of personal interaction with a member of the crew or airport staff. In fact, traditional in-flight hospitality might soon look like an outdated fossil from jet-set days to us – just like smoking in the cabins disappeared 20 years ago.

Aviation service providers need to partner even more with airlines

Aviation service providers like caterers but also related businesses like MROs, who play a role in outfitting and maintaining the cabin interiors, will need to offer their clients new tools and capabilities.  They must support airlines with more rapid product design, more resilient sourcing, quicker product configuration and more flexible, standardized supply chain operations. Thus, service providers will play a crucial role in ensuring an airline’s competitiveness in the post-pandemic world of travel.

This will require massive changes in the processes and the IT architecture of aviation service providers. They need to establish a more variable cost structure in operations as well as more digital, cloud-based IT applications. Big data analytics will serve as backbone for these capabilities. Owning an on-premise IT order management and fulfillment platform alone will not set them apart from their competitors anymore. Instead, differentiation will come from the insights, analyses, marketplace opportunities and additional services. For example, aviation service providers could lease equipment on more flexible terms to their airline clients in the future.

The change in the aviation industry will not only require service providers to offer new services and to do so in a more flexible way. New forms of cross-industry collaboration involving new partners and technology need to be explored, too. This also means that they should look beyond traditional industry boundaries and consider expanding their offering to other sectors than aviation. Yes, the world of aviation has become more volatile for airlines and their service providers, but it is full of opportunities for those willing to take advantage of them. 

Marcus Fromm

Managing Director – Mobility, Travel and Logistics, Switzerland

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