COVID-19 has been a tough and testing time for the commercial aviation industry. Over 8 months down the line and embattled airlines in South Africa have only recently received news that international flights are once again allowed back into the country. With this new wind beneath their wings, airlines are beginning to consider to seize opportunities in the economic recovery and turn losses into lessons.
Vice President of APJ&MEA at enterprise software company IFS, Andre de Meyer says, “COVID-19 has accelerated several existing industry trends and will drive significant business change in the coming years. Business models and practices must evolve, and ageing IT systems will act as barriers to this transformation.”
De-Meyer shares three trends that he believes will result in digital transformation opportunities to accelerate airline recovery and create a competitive advantage as the industry rebounds.
Airline groups come together in the face of adversity
“As airlines take stock of the full impact the virus has had on their business, we will continue to see efforts to restructure and some will be thinking about teaming up with other airlines,” says de Meyer. “We can expect to see more consolidation, in the form of acquisitions, joint ventures or equity purchases, in the coming months and years.”
Although this comes with challenges, he says this can have many benefits for airlines both in the short and long term. Airlines might initially focus on increasing revenues and reducing operational costs, but as partnerships develop, common inventory pools as well as shared maintenance service capabilities can be leveraged.
“Digital collaboration is a critical ingredient and enabler to maximise benefits, which include support for multiple business entities, real-time business process integration and controlled workflow along with enterprise-class scalability, performance, security and ease of integration,” says de Meyer.
Impact of an aging workforce and impending “brain drain”
According to de Meyer, a lot of the corporate knowledge that keeps an airline operating lies in the heads of older and more experienced individuals. As airlines quickly look to “right-size” based on lower operational levels, he says there will likely be an exodus of this critical knowledge. “The younger workforce brings different technology expectations but will also require higher levels of automation, decision support and real-time controls to maintain productivity and quality levels.”
This puts more emphasis on IT systems to manage knowledge and best practices so that they can be pushed to the frontline workers as required. De Meyer says this will result in an increased need for remote assistance capabilities where pilots and mechanics will be supported in real-time by a centralised specialist using technologies such as augmented or mixed reality.
Operational and commercial complexities reach new heights
As if running an airline wasn’t complicated enough, de Meyer explains that airlines adapting to a new and evolving way of flying means the industry promises to be even more dynamic than it has ever been.
“Short-term challenges such as aircraft retirement, lease returns, cabin class reconfiguration and managing maintenance capacity will place a burden on staff while they work to evolve the business, re-evaluate supply chains and deal with the lingering effects of the pandemic on route structures and capacity planning,” says de Meyer.
Again, technology will play an increasingly critical role in dealing with this complexity. Significant levels of automation and planning optimisation will no longer be luxuries but a “must-have” to effectively manage the increased dynamics. Done properly, a digital strategy will build both agility and resilience into the airline business processes.
Opportunity at hand
Whether it’s a v-shaped or u-shaped recovery, de Meyer says airlines can expect a prolonged period that is not ‘business as usual’ before it reaches a new normal. “In this period of low operational risk and impact, now is the time to introduce new technology as part of a digital transformation strategy that will enable a lower cost base with the agility to dial-up/dial-down operations in lockstep with market growth and new business opportunities.”