The airline industry is experiencing a period of exceptional growth, with IATA forecasting a doubling of passenger numbers by 2035. Leading aircraft manufacturers are forecasting significant increases in aircraft deliveries over the same period. Growth also brings challenges however: continued expansion and intense competition have set new expectations for value, constraining operating margins in the process. Increased traffic also results in additional fuel burn and has an environmental impact. Without a reassessment of technology and infrastructure, the challenge remains how the industry, and the finite airspace it relies on, can accommodate the growth predicted.
This is also a time of significant change in the air transport industry. The digital transformation observed in many terrestrial markets over the past decade is migrating skywards, creating wide-ranging opportunities but requiring closer collaboration and transformation in the aircraft’s ecosystem. The rise of the ‘connected aircraft’, facilitated by satellite communications and integrated with the Internet of Things (IoT), is initiating a data revolution. The aircraft is no longer an isolated unit, but has become an IP-enabled node in a wider digital framework. This new operating environment is bringing increased visibility to the flight crew, ground crews, airline operational control, air traffic management and an emerging network of supporting service providers.
The Sky High Economics study is the first of its kind to comprehensively model the economic impact of inflight connectivity on the aviation industry. Following the first instalment, Quantifying the Commercial Opportunities of Passenger Connectivity for the Global Airline Industry, which focused on revenue potential, this second report shines new light on the cost benefits of inflight connectivity. Specifically, how secure, high-quality connectivity services can also deliver powerful commercial efficiencies for airline operations, with resulting advantages for safety and environmental impact. It demonstrates multi-tiered benefits across fuel consumption and CO2 emissions, aircraft performance and maintenance, risk mitigation, on-time arrivals and departures, airspace management and improved fleet utilisation.
Sky High Economics - Chapter One: Quantifying the commercial opportunities of passenger connectivity for the global airline industry