Beyond the hype, where the true value lies

Governments around the world are pouring money into the aviation industry as never before. Regardless of the forms these cash injections take (grants, loans, equity or tax deferrals), governments around the world are becoming de facto the next key stakeholders of aviation. They must thus finance a transformation that serves both citizens and the planet. In exchange for the financial support, governments should ask airlines to: (i) assure competitiveness through restructuring, and (ii) implement transition programs into a “green” aviation model.

It is clear to all that COVID-19 has dealt a devastating blow to the aviation industry. However, while the pre-crisis industry was still thriving from the waves of globalization and commoditization of travel, it was already facing threats such as environmental pressures, unbalanced profit sharing along the value chain, and multiple constraints on operational and business agility. The recovery phase will be extremely challenging, and we believe future growth will involve nothing less than reinvention of the industry.

In the context of sustained growth in air travel, rapid advancements in digital technology and ongoing cost pressures in the global aviation sector, Arthur D. Little has conducted a research study to examine the potential for digital technology to reduce total airport operating costs.