Report: 2020 to be turbulent year for airline industry

Report: 2020 to be turbulent year for airline industry
Dubai International Airport (DXB)
Published: 10 December 2019 - 10:15 a.m.
By: Josh Corder

A number of incoming issues have been predicted to hit the global airline industry in 2020.

Issues relating to aircrafts, as well as the topic of sustainability, changes in regulations, and flight costs are said by GlobalData to challenge the industry next year.

Aircraft issues

As the new year starts, a number of aircrafts and components will start to age and need replacing. GlobalData’s head of R&A and travel and tourism, Nick Wyatt said issues with aircrafts are already bringing down Q1 predictions.

He explained: “There are delays and technical issues with other new aircraft – such as Trent engine issues, with the 777x experiencing high-profile setbacks. All of this is causing havoc with airline route planning and Q1 plans are already heavily affected. Further disruption could well be seen beyond the first quarter.”

Sustainability

With the rise of environmentalism, Wyatt continues to suggest airlines will face more scrutiny in future years on sustainability.

He said: “Airlines are an easy target for the ire of environmentalists and there has been much talk of flight-shaming, or ‘Flygskam.’ There is no doubt that sustainability has increased in importance,”

With the rise in environmental-awareness, Wyatt suggests more airlines must develop alternative fuels which are more sustainable.

“Airlines can’t afford to do nothing and development and testing of alternative fuels will increase.” Wyatt commented.

Regulation

According to Wyatt again, regulation in the industry needs revising, as in his opinion, the compensation costs imposed to airlines are too steep.

With that in mind, he believes regulation may change in 2020 to ease the pressure on airlines.

“The level of compensation airlines have to pay is excessive. The Civil Aviation Authority (CAA) wants to keep this legislation post-Brexit but even in Brussels there is now some thought that it has gone too far and it would not be a surprise to see some changes in this regard as airlines continue to lobby hard.” explained Wyatt.

Long-haul, low-cost flights

Finally Wyatt thinks the long-haul, low-cost flight market will continue to be a tricky system to make work financially.

He concluded: “At present, nobody is making low-cost, long-haul work and that is unlikely to change”.

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