Tuesday 4 October 2022, Amsterdam
The airline business is undergoing significant disruption. Carriers are no longer restricted to particular areas, and it is becoming more dynamic and market-driven. They will reallocate resources in response to demand. Infrastructure needs to be more adaptable as carriers form alliances, combine, and consolidate. Although it is anticipated that the infrastructure would generally be adequate, there will still be some severe capacity restrictions, frequently in the most significant air transportation markets.
The use of pricing as a method of resource allocation and producing the finances required to expand infrastructure will consequently become more significant, especially in these significant markets. In the field of airport landside access, new pricing models are already being used successfully. However, much can be accomplished in the context of current organisations through improved management techniques. In some circumstances, it may be necessary for new organisational forms for infrastructure supply to drive such changes.
How has COVID-19 had a Significant Impact on the Air Traffic Management Market?
With the start of a global pandemic stopping several important social activities, including flying, this market plummeted in 2020. One of the toughest periods for the commercial aviation sector has emerged as a result of Russian aggression in Ukraine. The key component in the recovery process will be domestic demand, which is the growth engine for passenger demand. According to Airports Council International (ACI), domestic demand made up over 59% of all air travel in 2019. This category was given great focus, as seen by the increase in this share to 76% in 2021. Global carriers' 2022 has not gotten off to a good start. Airlines are geared up for any such occurrences after enduring many waves of the COVID-19 pandemic.
Complexity and operating costs will continue to rise as a result of the Russian-Ukrainian situation and related sanctions. The rising cost of jet fuel is another threat that airlines must contend with. Oil prices in 2021 were driven by a combination of uncertain oil demand, erratic oil production rates, and uncertain global economic conditions. The fuel prices account for the largest portion of an airline's operational expenses (around 30% of operating expenses), and according to the Energy Information Administration, they have climbed by about 89% over the last three and a half years. Pre-pandemic, Russian airlines transported more than 125 million passengers, with 57% of them being domestic passengers, according to the Russian state aviation agency Rosaviatsiya.
The two major Russian airlines, Aeroflot (state-owned) and S7 Airlines, carry about 40% of all passengers. Pobeda, a low-cost division of Aeroflot, saw growth of more than 40% in 2019, indicating strong demand for low-cost services. However, the LCC only has Boeing aircraft in its fleet, which will have an effect on its operations and growth going forward in the face of harsh sanctions from numerous western countries. Due to the pandemic, Russian airlines carried 46% fewer passengers overall in 2020. Due to geopolitical tensions, the Russian aviation industry already faced a number of difficulties before the pandemic. Other difficulties include increased operational costs brought on by rising fuel and airport handling expenses.
Partnership Between Public and Private Sectors to Fuel Market Growth
SESAR 1, the first Joint Undertaking (JU) programme for Single European Sky ATM Research (SESAR), operated from 2008 to 2016. In order to guarantee that the program's outcomes would satisfy the operational requirements of ATM providers that must execute their ATM goods, services, and solutions, SESAR members oversaw 400 projects, 350 validations, 30,000 flight trials, and 20 million hours of work. Development is known to be the stage of SESAR 1. The verified ATM solutions must be manufactured and widely used throughout the deployment phase. A formalized European cooperation between the public and private sectors, SESAR 3 was created to hasten the implementation of the digital European sky programme through research and innovation. SESAR is utilizing, creating, and speeding up the adoption of the most cutting-edge technology solutions to control conventional aircraft, drones, air taxis, and vehicles flying at greater altitudes in order to put this into practice.
Improvements in Aviation Infrastructure to Fuel Market Growth
Improvements in aviation infrastructure's cost and productivity will be driven by the financial health of the carriers. In order to show the possible advantages of change, data on the cost and productivity trends in delivering air traffic control and airport services are required. The cost of resolving current issues and, in some regions, even the ability to run aviation infrastructure at its current levels of capacity are anticipated to be the biggest environmental restrictions and uncertainties facing future activity expansion. The actual cost of air travel may increase in the future if productivity improvements in air transportation are not made. The industry may become more dependent on leisure travel that is particularly price-sensitive, which could slow the expansion of aviation activities.
Remote Virtual Towers to Offer Lucrative Growth Prospects
The air traffic management industry has adopted the novel idea of the remote virtual tower. Controllers may carry out all of the activities of a control tower from anywhere owing to the remote virtual towers. Compared to airports without towers, these towers guarantee streamlined access, lowered delays, and enhanced safety margins. Airports & air navigation service providers (ANSPs) are thinking about how the International Civil Aviation Organization (ICAO) Procedures for Air Navigation Services (PANS) ATM modifications can lead to improvements in visual observation. According to these modifications, visual observation must be accomplished either directly out the window or indirectly by using a visual surveillance equipment that has been specially approved for the purpose by the relevant ATS authority. Undoubtedly, this would inspire numerous nations to deploy remote and digital towers. In comparison to a traditional control tower, these towers have a smaller footprint, are less expensive, more technically proficient, and are frequently more durable and secure. Additionally, where dedicated local air traffic services are not deemed viable or cost-effective, they can offer aerodrome control services for many aerodromes.
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