Time to face reality: CAPA previews the 2030 airline industry - TODAY
Today on November's CAPA Live virtual summit, CAPA's Founder and Chairman Emeritus, Peter Harbison's monthly outlook foreshadows a “very different industry” as a result of the damage wrought by COVID-19.
The November edition commences at 0300 GMT on 11 November, beginning with live sessions from the Asia Pacific region, then swinging to EMEA and the Americas, following the sun.
Mr Harbison says, “It important to have some sort of reality check now that we’re nine months on from the onset of this COVID-19 disaster. Fundamentally, we’re looking at a new platform from which the industry will build over the next decade.
What will the new situation be like? Most people realise now, unless they're really deluding themselves, that it is going to be a structurally very different industry”.
The airline industry has got to shrink
“Many airlines themselves have shrunk already and will stay smaller. There'll be ongoing financial losses. Airline consolidation is inevitable, including airline departures and restructuring.
But still there has been no fundamental change in approach to where we need to be for the next decade. It's time for a reality check.
The ingredients of the 2030 scenario on this basis include some key features:
- Environmental pressures will be immense - they will not go away;
- Disruption of the airline distribution systems will be extensive; and
- International networks will be transformed, as long haul, low cost aircraft are introduced to the market”.
Mr Harbison predicts ‘inevitable’ consolidation and market exits as debts mount, and revenues fail to rebound. Long haul flying is particularly endangered, with the the loss of business class revenues and the closure and uncertainty of borders, he added.
“We do need to adapt to this new and compelling scenario. COVID-19 is not going to go away in 2021, let alone 2020. It's not going to be solved quickly by a vaccine. Even distribution of the vaccines, and we'll talk about this elsewhere in today's show, will take at least two years to be distributed globally.
Now, there'll be some pockets in developed nations who get vaccines very quickly. But it does mean that it's still going to be very difficult to open up international markets. If everybody is not vaccinated, and until several billion people can be vaccinated, that's going to remain the situation.
In the meantime, universal testing, tracing, commonality, cooperation, multilateral cooperation is going to be so vital in this process”, Mr Harbison concluded.
Watch Peter Harbison’s 2030 Outlook presentation at the November edition of CAPA Live – click here for more information.