The air transport industry continues in an upward trend in profits and popularity. Since airplanes are one of the most popular means of transport, there’s always a significant demand for passenger travel. Although air transport is a multi-billion dollar industry, it’s still sensitive to certain market drivers. Over time, these specific market drivers–trends–could have a real effect on the future of the aviation industry. Due to these predicted trends, airlines are planning for various economic possibilities by standing by their financially-driven culture. Throughout the years, the aviation industry has improved their carriers and services to passengers to keep up with user demand and competition. However, taking competitors out of the equation, there are many trends from now and throughout the next several years that can really affect and shape the future of the aviation industry. Let’s take a look at some of these trends:
- Overcapacity and fare pressure: In years to come, the concept of overcapacity and fare pressure can actually reduce per-passenger yields. Experts believe that airlines will continue to significantly discount airfare in order to fill empty seats. However, there are many regions where even the best discounts won’t fill the empty seats in larger aircrafts. Until airlines decide to place a focus on capacity management practices, this trend will persist.
- Smaller aircrafts and new routes: Experts predict that there will be more right-sized aircrafts that will provide more unique air routes. Studies show that 100-150 seat aircrafts will slowly start to increase the need for airlines to ‘right-size’ their fleets and generate new routes.
- Intra-regional routes will still be superior: While smaller aircrafts will generate new routes, intra-regional routes will still be the superior option throughout the air travel market. Currently, 80% of global air traffic in 2016 consisted of intra-regional routes, and is only predicted to grow throughout the years. Experts believe that this percentage will see a 5% growth through 2036. Intra-regional routes are known for their ability to generate the highest yield, and continuance of their popularity throughout the aviation market will only create more opportunity for short-to-medium routes, thin routes, and even new routes.
- Modern, fuel-efficient, and right-sized aircrafts: Within the next 20 years, it’s predicted that current airline fleets will be replaced with those that yield excellent fuel efficiency and are right-sized. These right-sized aircrafts will consist of 100-150 seats with single isles. This change will result in the optimization aircrafts that will later lead to an increase in both efficiency and profitability.
These are only a few of the many trends that are predicted to occur within the aviation industry in the next few years. With these trends, airlines will see a great increase in profitability that will sure to be secure and long-term. In addition to these predictions, airlines are working tirelessly to ensure the refinement of safety measures and passenger experience.
This post was written by Largent Fuels. LARGENT specializes in aviation management for cargo, commercial, and general aviation. Our role is to determine the most cost-efficient options for our clients in all aviation related services such as fuel pricing, handling coordination, charter services, aircraft sales, among others. We take pride in our access to high quality products and services that meet the most demanding international standards.