Aviation Leaders Discuss 2024 Challenges

Against the backdrop of the Dubai Air Show and COP28, the aviation industry’s great and good gathered at the recent CAPA World Aviation Summit in Abu Dhabi to discuss and debate where the aviation industry is heading and potential challenges in the next few years.

Global airline capacity this week stands at 97% of its 2019 level, whilst scheduled flights are at 91% so although there has been progress, the reality is that a full recovery - and indeed four years' lost capacity growth - is going to be a struggle. With this context in mind, airline leaders shared their own insights and views. So, what were those key messages and themes, and what developments are expected in the next year?

Supply Chain Woes

Throughout the Summit there were stories of supply chain issues affecting not only new aircraft deliveries, but also required maintenance on existing fleets. One airline in India currently has around 40 aircraft grounded awaiting spare parts, whilst one airline CEO bemoaned the fact that aircraft are regularly going into maintenance and can literally take months to be returned to the line as spares are, well, not spare!

Airlines also reported that claims from Michael O’Leary (CEO of Ryanair) about operating standing room only aircraft could come true in the next few years - carriers are finally receiving shiny new aircraft only to find that the seat manufacturer can’t deliver the required seats for up to six months. Maybe standing room only is the way forward. 

For some airline leaders the current challenges are frustrating, while others had already passed that point and had become mildly amused by the situation, able to recount their own personal stories of supply chain challenges. In fact the only thing that wasn’t in short supply was the humour around the whole issue. Nevertheless, no one expects the problem to go away in the short-term and that will compromise capacity throughout next year. 

All of which is leading to a very strong lease market as airlines seek wet, dry and warm leases to cover their fleet gaps. Not quite a bragging right but for some carriers the urgent need to find capacity is leading to eye-watering monthly lease rates that make you wonder if they can ever drive enough revenue to balance the costs. Although, perhaps for one of the airlines concerned costs isn’t the greatest issue.

AI and ancillary revenue generation go hand in hand. Discussions around artificial intelligence (AI) were interesting, especially when comparisons were made between approaches of legacy airlines - who are increasingly carrying more than 40 KG of excess systems baggage - and the next generation of airlines. Whilst airlines who are yet to fly were claiming that they will be heavily investing in AI as part of their product differentiation strategy.  

For many years the whole area of ancillary revenues has been a bit of a secret for the airline industry, but at this year’s event there was plenty of discussion about revenue optimization approaches. It’s clear that AI and ancillary revenue generation go hand in hand, and will lead to smarter revenue management. Some airlines are further along than others at driving this new revenue intelligence model.

The Evolution of Airline Revenue Management: The Impact of Emerging  Technologies|Read More

Everyone Is Watching Each Other

In a remarkable series of admissions, some airline CEOs confessed to travelling on competitors, taking parts of their products which they admired and replicating them in their own operation. One CEO even admitted travelling economy class on another carrier and spotting some ways to improve his own company's service, while another confessed to a lucky upgrade to the Residence on one flight – that might prove hard to replicate on an A220 though!

Taking first prize in this section though was Jet2, where someone had noticed that they gave children travelling with them a birthday card on their special day; hardly expensive but the sort of thing that brings long-term customer value and goodwill - so kudos to Yorkshire’s finest airline. 

EMBEDDED CTA - Blog subscribe

Strategic Discussions Aplenty

Naturally there were plenty of strategic conversations with various airline CEOs explaining why their strategy was the best, and how they were going to succeed in an increasingly competitive market. Listening to the discussions around the Middle East market was fascinating, will there really be room for all the planned airlines and indeed the two that are yet to be announced in Saudi Arabia? It’s hard to believe that even the most optimistic levels of growth will meet the ambitions of some airlines, but that never stopped anyone believing. 

It was interesting to hear from new airline start-ups sharing their ideas, visions, and plans for future development. From either end of the spectrum we had a niche carrier launching a very upmarket boutique product whilst another flight of fancy was shared around a new wide-bodied aircraft operator from the UK. History suggests that playing at either end of the product/price spectrum can be very challenging, but as is always the case these carriers claim to have spotted where everyone else went wrong!

So, What Does it All Mean For Next Year?

More challenges, more exciting ideas and undoubtedly plenty of data points that we can use during 2024. It does feel as though there is a sense of optimism about the future, despite some frustrations at parts of the industry. But my main takeaway from the event was that despite the challenges of the airline industry it still attracts great leaders and personalities who genuinely know what they are doing and how to run their businesses!


The Evolution of Airlines 2019-2023 | Read More

Join our next live webinar on 24th July | Register Now

Innovative Airline Operations: The Turnaround | Read More

New call-to-action