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Is COVID-19 Really to Blame for the Aviation Industry Crisis?

There can be no doubt that the COVID-19 pandemic has been a tragedy for the airline industry. But, to say that the pandemic is to blame for the industry’s crisis might not be entirely true. The industry’s structural problems predate this latest crisis.

The pandemic has helped nudge the industry off a precipice, but this need not be a fall into a void; this could be an opportunity to rethink the aviation business model, and to take the first steps to becoming a sustainable industry in every sense of the word.

Think about the industry pre-COVID-19. When airlines were focused on finding ways to make air passenger and cargo transport profitable in an ultra-competitive, low-margin, offer-saturated market. Governments were considering policies to address climate change. While people were looking for mobility that was practical, convenient, sustainable, and that gave them a good experience whether by train, plane, bike, scooter, Hyperloop, or all of the above together.

Thus, in recent years new multimodal transport models have emerged to respond to the need to speed up travel in cities and improve the passenger experience.

Uber understood this and, from about a year ago, has allowed customers to access real-time information about nearby public transport stops and departure times in several major cities around the world from within the Uber app. It’s like an airline recommending that you travel by train to save time and money…

Along with the emergence of these new transport concepts, people have begun to question the actual costs of the “fast“ world in which we live. It began with the backlash against “fast food” in the early 2000s. A decade later, people were focused on the true impact of “fast fashion”. And now, the time of reckoning has come for “fast tourism”.

It is true that we are the most well-travelled generation in history, and that the low-cost model in aviation has been able to democratise a means of transport that for decades was out of reach for many. However, it is time to think about the real cost of going to Rome for a weekend, beyond the 20 euros each way that Ryanair charges you.

As with clothing, fast experiences may not really give you the time to enjoy them. And what about all the pollution you generated to get that selfie at the Colosseum?

The business model of airlines must go beyond a race to increase and fill capacity at all costs. Which leads us to another victim of this crisis: the passenger experience; a subject that we like to talk about a lot at Mormedi.

Passengers are now hyper-demanding and empowered thanks to that most lethal of weapons to the hegemony of corporate communications: social media. Airlines are struggling to justify that a person must be treated like cargo because they “only” paid 20 euros for their seat—even though some airlines have attempted to charge people depending on their weight.

This is what happens when you have a business model that operates at the limits of efficiency and profitability: the slightest variation will affect the bottom line.

To conclude, COVID-19 may end up being that nudge the airline industry needed to completely reformulate its business model. What could be the implications for an airline industry in a world of decreased air traffic?

It may be that we travel less, but that our trips are of a higher quality, in which we will actually enjoy the whole journey, from the purchase of the ticket, to the journey to the airport, the walk through the boarding gates, and the on-board service until we arrive at our destination. And all this within a business model that is sustainable and proactive in driving transformation, because as the environmental activism of the Greta Thunberg generation has shown, there is a large gap between government regulations and civil society, and policymaking tends to be longwinded and meek.

At Mormedi we are aware of this gap and the urgent need for companies to move forward. To help companies create differentiation and competitive advantage through a coherent sustainability strategy we have created the Mormedi Sustainability Compass: a tool to find opportunities for innovation across the lifecycle of any product or service, while ensuring that you deliver the best user experience.

For more information on how we can help make your business more competitive and sustainable, please contact us at madridHQ@mormedi.com or visit mormedi.com.

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