CAPA's Global Airline Outlook for the 2020s. Revolution!

If the first two decades of the 21st century were transformational for the aviation industry, the 2020s will be revolutionary.

There are some givens for the coming decade: Asia will come to dominate the global airline industry, oil and other external costs will make cost management challenging (although oil prices appear to have been tamed for now), a lack of skilled resources will continue to hamper the growth of the industry, and, with a few standout exceptions, airlines will continue to fail to make a significant return on invested capital.

At some stage during the first half of the decade there will also be an economic downturn, possibly very substantial. On historical trends it is already well overdue, and with unprecedentedly low interest rates and astonishingly massive levels of private and public debt, there is little to predict just how great the scope will be.

If there ever were uncharted waters in the economic sphere, that is where we are now.

But the likely resulting combination of an airline and supplier debt shock, together with a slump in consumer demand, will almost undoubtedly trigger a more significant move towards industry consolidation (by combination and market exit) than has ever been seen.

This outlook report will deal with what we see as the four key issues that will underwrite the most marked industry transformation.

Two of them will occur gradually, more or less under the surface; the other two could well shake the foundations of the industry within the next five years.