General aviation News

IATA Aviation Data and Digital Capabilities during crisis – Episode 3 review

IATA organized a third episode how to leverage the data and digital capabilities where the topic was on the plan recovery in times of crisis such as COVID-19.

IATA organized a webinar as part of its series to help its members and aviation community into how to combat the crisis of COVID-19 with digital capabilities.

The subject of its 3rd episode was: plan recovery.

The moderator of the event was Mr. Houman Goudarzi, Head of BI & Industry Engagement, IATA.

The event was opened by Charles De Gheldere, IATA Director of Aviation Data, who gave a keynote welcome presentation.

Brian Pearce, IATA: COVID-19’s impact on passenger demand, scenario analysis, and the expected recovery

Brian Pearce who is a chief economist at IATA gave an outlook of air travel in the next 5 years that has been influenced by COVID-19. IATA joined in partnership with various companies to get full data and to be able to forecast recovery of aviation industry. Mr.Pearce said there will be a lot of uncertainties and that air travel will recover more slowly than other economies with 2023 the year they forecast in their model when aviation would come to 2019 levels. Central banks are injecting a lot of cash into economies and IATA are expecting a sharp economic rebound that can help the business confidence. Business confidence is important for air travel and while at the moment the business confidence is decreasing in the world, China has managed to bounce it back after lockdown which is encouraging. The most important aspect is health challenge in order to resume international travels. Even though people want to travel, they cannot due to borders closed around the world. IATA forecasts that short haul international flights could resume soon, but long haul flights will lag and its uncertain when this type of travel will rebound. Mr. Peace concluded that air travel prospects for 10-20 year forecast will not be affected by COVID-19.

After the presentation, Mr. Goudarzi organized a poll where it was asked which key data source is the best to forecast travel demand in coming months and 2021. The majority responded travel restrictions, followed by search engine trends and airline schedules.

Frederik van Essen, KLM: Insights from KLM on how to maneuver during these uncertain times

Frederik van Essen is a Commercial Director at Dutch airline, KLM. Mr. van Essen pointed out on demand recovery scenario. He presented 5 potential scenarios:

  • V-shape recovery (quick containment of the virus, aviation recovery in 6 months – very unlikely)
  • U-shape recovery (gradual decrease of new cases and deaths, 10-18 months recovery, very unlikely)
  • Prolonged U-shape recovery (slow, gradual decrease in rate of new cases and deaths, 24 month recovery, high likelihood)
  • L-shape recovery (slow, gradual decrease in rate of new cases and deaths, 48 month recovery, high likelihood)
  • W-shape recovery (spread of virus decreases but then rapidly increases, 48+ month recovery, medium likelihood)

He, personally, thinks that Prolonged U-shape or L-shape recovery are the ones we are facing at these unprecedented times in the industry. There will be also changes in market structure which will have to be taken in account. Mr. van Essen highlighted that airlines will have to make changes in their organizations to seize the new opportunities in the “new” normal after the aviation restarts with digital and data playing a key role.  The use of digital data is evident in KLM by using Zero-based scaling post COVID-19 that is based on rapidly defining what the routes to fly, with what aircraft and how often based on constantly evolving world demand forecast aiming for optimal profitability/free cash flow, forecast demand scenarios in order to assess and adjust schedule to maximize network planning and fleet management. For this is crucial to have a holistic system where the data is the key ingredient and also to have ability to adopt to changing situation.

Alberto Rey Villaverde: Insights from a data guru, former Head of Data Science at easyJet

Alberto Ray Villaverde who is a Chief Data Officer at Just Eat company and had worked as Head of Data Science at Easyjet. Alberto held a panel discussion with the host of the event Mr. Goudarzi. The highlights of this panel are that ability to react in quick notice is crucial in unprecedented times especially for airlines, not to make decisions on only one data set, human aspect with AI always beat any automated mode, therefore human aspect should be taken in consideration in data insights. human aspect is especially important when you have certain data indicators that could work for certain country but that isn’t true for the other country you would like to target for example for marketing activities and the human aspect can distinguish it.

After Mr. Rey Villaverde, there was a panel between guests Nina Wittkamp, Phil Callow, Olivier Jager, Nils Gelbjerg-Hansen and Sébastien Texier who discussed track demand rebound: how to leverage various data sources (schedule, shopping, pricing, customer behavior, social media etc.) to plan recovery. Phil pointed out that to date, 489,000 flights scheduled to operate in January have been dropped by airlines and the pace of change has been dramatic. This has been influenced by drop in selling plane tickets and due to COVID-19 pandemic there was an unprecedented drop in demand from travelers. Airlines need to focus on search data as they are not receiving enough traffic thereby they need to look for new data sets.

The webinar has been completed by a small panel presentation from IATA’s Yanik Hoyles and Nina Wittkamp from McKinsey & Company. They have given the audience an insight into indicators for air travel. Europe is interesting since summer holiday destinations get ready for inbound tourism which will be depending on cross-border policies. There was observation of a high number of cancellations of cross-border flights in the short-term. Another indicator is that bookings in Europe starts to pick up slightly for travel during summer holiday season.

Thanks to IATA for this interesting episode and next one will be focused on building resilience.

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