Strategising for the rising demand in aviation
Ekelem Airhihen, a trained mediator, chartered accountant, certified finance and IT consultant, certified in policy and public leadership, and an airport customer experience specialist, has an MBA from the Lagos Business School. He is a member, ACI Airport Non-aeronautical Revenue Activities Committee; and is certified in design and implementation of KPI for airports. He can be reached on ekyair@yahoo.com and +2348023125396 (WhatsApp only)
April 16, 2024540 views0 comments
The aviation industry has continued to witness a surge in demand as reported recently. This brings with it a heightened responsibility to prepare for the increasing demand so that the passenger experience remains positive and all stakeholders reap the benefits of this rise in demand.
The International Air Transport Association (IATA) released data for February 2024 global passenger demand which showed very positive performances globally. Total demand, measured in revenue passenger kilometres (RPKs), was up 21.5 percent compared to February 2023. Total capacity, measured in available seat kilometres (ASK), was up 18.7 percent year-on-year. Also, International demand rose 26.3 percent compared to February 2023; capacity was up 25.5 percent year-on-year and the load factor improved to 79.3 percent.
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The report stated further that Domestic demand rose 15.0 percent compared to February 2023; capacity was up 9.4 percent year-on-year and the load factor was 82.6 percent. In the report there was a note that February 2024 was a leap year with one extra day compared to February 2023. This slightly exaggerates growth in both demand and capacity to the positive. For the international passenger markets, African airlines saw a 20.7 percent year-on-year increase in demand. Capacity was up 22.1 percent year-on-year. However, the load factor fell to 74.0 percent (-0.8ppt compared to February 2023).
Worthy of note is the advisory by IATA’s director general, Willie Walsh: “The strong start to 2024 continued in February with all markets except North America reporting double-digit growth in passenger traffic. There is good reason to be optimistic about the industry’s prospects in 2024 as airlines accelerate investments in decarbonisation and passenger demand shows resilience in the face of geopolitical and economic uncertainties. It is critical that politicians resist the temptation of cash grabs with new taxes that could destabilise this positive trajectory and make travel more expensive. In particular, Europe is a worry as it seems determined to lock in its sluggish economic recovery with uncompetitive tax proposals.”
The above is a call for industry stakeholders in Africa to take a careful look at events in Europe as IATA is doing to ensure that their airlines remain competitive and resilient. Beyond that there is also the need to take a look at other factors that will enable the industry to cope with the rising numbers.
Digital capability should not be seen as just the responsibility of the airport or the Air Navigation Service Provider only. It should be enhanced collaboratively so that the capability of employees as well as the digitally enabled service like a web engine can render greater service levels. Also the current prediction and optimisation tools in use should not be taken for granted. There is always room for improvement. The industry might, for instance, ask why some planes leave with a low load factor while still charging a very high price. They may need to do some simulations of various pricing scenarios and the effect on profitability.
The same applies to the various assumptions held before the pandemic that had been an input into some of the planning being carried out such as: Block and turn times, bags per passenger, passenger arrival rates and connection times, check-in throughput time, and employee absenteeism. Usually, these assumptions are based on historical norms and trends that may be tweaked once every year or two. In this case it is advisable to think and plan for scenarios which require agility and digital capabilities. This could help the airport community avoid mishaps and keep operations running smoothly.
Long queue times at airports can make the passenger experience less appealing. Airports may consider having a kind of triage system where passengers can watch videos to help them prepare for travel, including safety briefs also; having transparent bags for them to put in their items as liquids, aerosols and gels of allowable limits before security checks, and other innovative solutions. These will go a long way in making a difference to the passenger experience as the demand continues to increase.
Collaboration by all members of the airport community and across the ecosystem by policy makers, ATC, the military, airports, and airlines may be critical in ensuring that this increasing demand does not lead to more dissatisfied customers. Given the shared nature of resources, this would involve more transparent communication on constraints, greater sharing of data, and better alignment of policy to action.
All industry stakeholders need to bear this in mind that a great operation and customer experience is not just good for customers but also for the bottom line.
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