To the aviation professionals, please see our latest blog post were we share our opinion on what could be beneficial for the aviation industry during this challenging times.
The impact of the pandemic
There is no need to say that the CoVid-19 Virus pandemic has changed the world and caused an irreparable damage to the worldwide economy.
Due to restrictions in traveling and international transportation the aviation sector is probably one of the most suffering industries. Prognosed by the International Air Transport Association (IATA) the worldwide aircraft industry will lose approximately 150 billion US-Dollar in 2020 and 2021. Airlines faced a decrease of passengers in 2020 of about 60% down to 1,8 billion. The total revenue in Passenger air transport will drop by 69 % down to 191 billion Dollars. However constrained cargo capacity results in higher yields and revenue. Cargo operators showed a revenue increase of 15 % due to the urgent transportation of medical supplies worldwide.
Consequently the CoVid-19 pandemic will be the second hardest period of loss in the history of aviation after the second world war.
And there are hardly no experiences how to handle this situation. Even incidences like the oil crisis in the early 70s, the 9/11 terror attack or financial crisis in 2009 are not comparable to the present situation. The CoVid-19 pandemic stretches the industry to a breaking point and is testing the aviation sector in new unprecedented ways.
Before the outbreak of the pandemic the aviation sector was a prosperous industry. According to the Aviation Benefit Report from 2019 aviation made 3.6 % of the world's gross domestic product. But now in 2020 almost half of the worldwide available aircrafts were grounded (51%). This caused not only a huge impact on stakeholders but also led to 5.6 million lost jobs in Europe and 25 million jobs worldwide in the aviation sector.
The aviation industry has always been a cyclical industry which is directly impacted by downturns in the economy. But in the long term it was always a growing and healthy economic sector. Business giants like airlines, airports and OEM's were able to run long-term cycles with a continuous growth and rise in value and maintained profitability for the past 10 years. But they have put almost all ambition in improving their market position and to increase profit. The business models were targeted towards a prosperous and predictable economy. Sudden changes were almost not considered – neither in risk managements nor in financial reserves.
For the aviation industry now begins a new phase in which it must detach from a vision of pure growth to sustainability during the whole life cycle.
The industry needs innovations to survive
During the crisis the aviation industry received a significant financial support from the government to survive the pandemic. However those supports were intimately connected with several terms and conditions. One of those is the decarbonization of the aviation sector to make the industry more sustainable. Therefore rehabilitation and economic transformation are straight connected. On the one hand it will cause huge investments but on the other hand the producing industry benefits from all inventions by making profit from research, development and production afterwards.
Aircraft and engine maintenance and every industry connected to it is primarily driven by flight hours and cycles. In other words, if the aircraft is not operating at all the maintenance and every connected demand will be lower. As soon as flying restarts the maintenance demand across airframes, engines and components will increase again, but probably to lower levels than the original pre-CoVid-19 projections. Consequently operators, suppliers, MROs and OEMs will have to strike a number of new paths to survive and recover from the pandemic effects in order to manage the newly formed demands and challenges.
It is without any doubts necessary to improve assessments and the management of risk and safety. The industry needs to explore powerful methods of identifying hazards and managing risks which are suitable for the socio-technical system of aviation and which are adaptable on various types of risk. The aviation industry should be better prepared for risks and be able to act rapidly and flexible.
This goes hand in hand with restructuring and redefining of all tasks and systems which come along with maintenance and technical reporting. Innovations regarding digital maintenance should become a higher priority than before the crisis. However developments should strive for new applications in digital maintenance which would help to make quick and appropriate planning decisions.
In the course of the sudden decline of profit and workload during the pandemic, many job positions were cancelled and employees were put on gardening leave. So, when the business restarts again and the demand increases the aviation industry might face problems of finding again the skilled staff because former employees already changed the position or even the industry segment their working in. With these considerations around staff and costs it will be important to automate tasks where possible. Technologies like artificial intelligence and machine learning come into focus. It is mandatory that technical equipment and software will be equivalent developed respectively adapted. Mechanics and technicians need to collaborate virtually with improved productivity while also satisfying regulatory compliance.
Aviation industry is facing a digital transformation
Maintenance planners will have a major role in minimizing costs. With the current CoVid-19 situation planners need to enhance their methods to use the available resources more effectively and to maintenance facilities with very little margin of error. The maintenance forecast must consider any dependencies that might impact the turnaround time for a maintained aircraft. Striving for a more digitized and streamlined maintenance process will help to increase efficiency and forecasting of such events.
A further step is optimizing the process regarding material planning and buyer activities. In times when lots of aircrafts are grounded, parts of it can be abstracted to conserve cash for the organization and meet current demands. The companies cannot afford to stock and a forecast of demand is hardly possible. So planners, operators and maintenance are forced to work continuously together on a real time basis to identify relevant objects for purchase and to assign the best option and source for purchase.
Even though the pandemic was a shocking scenario for the industry, it had the positive effect to rouse the industry from sometimes declared as cumbersome patterns and forced the concerned companies to take actions and to tackle a number of core issues. The major goal is to maximize productivity, to use the right skills and materials, to conserve cash and to increase revenue again.
A fundamental element of the new development is a fast reaction on current circumstances. Automating the entire planning and procurement process in order to expedite the connection between customers and suppliers and consequently to optimize the purchasing process is the key for efficiency and an enhanced work and cash flow.
How Aeroji can help?
In the current times accelerating the business is our contribution to the recovery of aviation. Solving complex challenges with easy methods will always be our approach. Aeroji consider itself as part of the digitization era by offering a worldwide platform where operators, owners and MRO representatives will meet on eye level in a digital environment and can do business as easy as booking a flight.
By following our posts, you will get to know the product, follow the development process and be the first to know about newly incorporated features. You can provide your comments and proposals and thereby participate on the continuous improvement of the platform for the benefit of all existing and future users. We would like to establish an interactive relationship with our readers – independent of whether you use the platform or not.
We are there for you anytime to answer all your questions and to listen to all your proposals as well as criticisms. All your feedback is very much appreciated. Just let us know at firstname.lastname@example.org or on any social network.
Your Aeroji Team