The Future of the Airline Industry 2035 study commissioned by IATA’s Industry Affairs Committee aims to help airlines and other key aviation stakeholders anticipate the key risks and opportunities that their businesses could face between now and 2035.

Carried out by the School of International Futures, the study looks at how external forces—from geopolitics to technological innovation and environmental concerns—could shape aviation’s future.

Download the full report

Read the full report for free: Future of the Airline Industry 2035 (pdf)

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Starting conversations today about the needs of tomorrow

A smarter regulation framework for aviation won’t happen overnight and this study will help us to start conversations today about what we will need in 10 and 20 years’ time.

The study is especially relevant to the following aviation stakeholders:

  • Airlines in planning for future technological, product and market development
  • Governments and regulators in their long-term infrastructure and regulatory planning
  • Airport operators in considering future capital expenditure
  • Civil aviation authorities (CAAs) and air navigation service providers (ANSPs) in contemplating future infrastructure design and development

Brave new world

The Future of the Airline Industry 2035 establishes 11 themes affecting air traffic demand: geopolitics, data, Africa and Asia-Pacific, government, security and borders, privacy and trust, business models, economy, values and communities, environment, and technology. These are explored in the context of four potential scenarios envisaging different outcomes for the world.

The study purposely makes these scenarios extreme and accepts that the more likely future will combine elements of all four. However, the exercise of pushing boundaries allows us to consider a wider perspective.

Recommendations

The study allowed us to consider a variety of implications for the industry and to set out the industry-level recommendations.


Key drivers of change

  • Environmental activism
  • Infectious diseases and instability
  • New modes of consumption
  • Middle class growth in China and the Asia-Pacific region
  • Global aging
  • Risk of terrorism

Main recommendations

  • IATA should establish an industry-wide corporate responsibility programme, with a focus on transparency, safety and the environment that could help IATA to drive global standards and ensure the sector remains competitive in a world where there is increasing competition from other transport modalities.
  • With the increasing risk of pandemics, a global approach to managing infectious diseases becomes ever more important. While airlines need to be vigilant and prepared, IATA should also stress the increasingly important role that all stakeholders, particularly governments, need to play to ensure that responses are in line with WHO guidance and international health regulations.
  • The industry should make every effort to understand consumer attitudes in emerging markets, as well as how government and business in these countries view the role of the airline industry, in order to get ahead of potential future regulation.
  • The industry should establish core principles on facilitating the travel of older passengers and those with reduced mobility. An increasingly active aging population and changing attitudes to disability are likely to result in a greater need for the industry to support passengers with special requirements, for example on account of age, medical need or disability.
  • The industry should monitor proposals to extend or evolve the security cordon around airports to ensure that governments continue to be ultimately responsible for the safety of their citizens.
  • The industry should work with appropriate organizations to drive the establishment of globally harmonized standards to address biohacking.

Key drivers of change

  • Cybersecurity
  • Internet(s) of Things
  • Tensions between data privacy and surveillance
  • Alternatives modes of rapid transit
  • Robotics and automation

Main recommendations

  • The industry should consider establishing an information exchange mechanism for airlines to share information on cybersecurity threats (as part of a cybersecurity strategy). Cybersecurity is likely to be a major issue that will require the industry to work with companies across the entire supply chain, as well as governments to manage risk.
  • The industry is already in the process of exploring how to take advantage (and manage risks) of new technologies such as blockchain. We suggest also looking at the effect this and other new technologies can have on the business relationships on its member airlines. Can blockchain play a role, for example, in rebalancing the value chain?
  • The industry should consider measures that support airline ownership of data (e.g. safeguarding privacy, commitment to common data protection procedures), and look to establish a global industry-wide position on data protection. A more open approach to data and interoperability at a global and industry level may be more positive for the industry and for consumers.
  • IATA and the industry should engage with novel transport providers (hyperloop, drones, unmanned aircraft, space travel companies) to explore potential cooperation as well as shared needs. In a future where passengers want to travel faster and prioritize convenience, seamless travel and connections between providers will become increasingly important. One option may be to widen IATA membership to include air transport operators who are not airlines.
  • Automation is expected to have a significant impact on transportation and logistics. To ensure that the airline industry benefits, the industry should establish a working group including both manned and unmanned aircraft operators to facilitate standard-setting and information sharing.

Key drivers of change

  • Alternative fuels and energy sources
  • Extreme weather conditions
  • International regulation of emissions and noise pollution

Main recommendations

  • Environmental performance is one of the key elements of society’s changing expectations of aviation and an element which becomes increasingly critical in a resource-constrained world. But sustainability isn’t environmental alone, and countries’ expectations of airlines will move beyond the environmental sphere. In that vein, the industry should continue to explore where it can have a positive influence in the world, potentially linking these to the UN Sustainable Development Goals 2030.
  • The creation of an industry-wide corporate responsibility programme, with a focus on transparency, safety and the environment that could help to drive global standards and ensure the sector remains competitive in a world where there is increasing competition from other transport modalities.

Key drivers of change

  • Price of oil
  • Strength and volatility of the global economy
  • Level of integration along air-industry supply chain
  • Changing nature of work and competition for talent

Recommendations

  • The industry should create an internal early warning group with the task of ensuring that the industry is prepared for possible threats. This group could distill a set of early warning indicators from this scenario report and similar publications, create a timeline of expected developments, and update it regularly.
  • The industry should foster relationships with secondary and tertiary airports. These may offer additional capacity in situations where hubs become overcrowded, or where new technologies, automation and business models allow airlines to bypass hubs and establish new intermodal connections (e.g. Uber-type business models).
  • The industry should develop a plan for educating and influencing the next generation of airline industry employees and users (e.g. 15-25 year olds). As new technologies and value shifts change how and why people work, the industry will need to invest in skills for future aviation leaders and workers, and communicate the benefits of working in the sector.

Key drivers of change

  • Geopolitical (in)stability
  • International regulation of emissions and noise pollution
  • Shifting borders, boundaries, and sovereignty
  • Increasing influence of alternative regional and global institutions
  • Government ownership of airspace and critical infrastructure
  • Anti-competitive decisions

Main recommendations

  • The industry should advocate for greater flexibility in routing and scheduling that might allow airlines to deal with implications of capacity issues caused by conflicts and other major disruptions. Developing an “emergency response” set of guidelines and procedures that could be implemented rapidly by airlines if the security situation becomes more turbulent. These may include passenger screening, data sharing and security procedures.
  • The industry should continue to support global standards bodies such as ICAO, and think strategically about how the relationship between the industry and these institutions will evolve. It will be important to maintain global standards for a global industry, especially in futures that are increasingly multipolar or where there are shifts in the balance of power.
  • The industry should engage early with new institutions (such as the New Development Bank) in order to play a more significant role in enacting or influencing aviation policy in the top markets in 2035 (China, US, India, UK, EU and Indonesia).
  • IATA and the industry should increase its engagement with stakeholders from Africa and Asia-Pacfic (governments, think-tanks and other bodies that influence government policy) to deepen the industry’s knowledge of how decisions are made and how those decision-making processes will evolve. This will ensure that regulations introduced do not limit the potential of these markets.
  • The industry should build relationships with those responsible for urban planning (not just air infrastructure authorities) to ensure industry needs are linked into infrastructure planning, particularly when there are major plans for developments around airports.
  • The industry should keep an eye out for aviation funds being diverted to ‘new frontiers’ (such as space travel). It could also prepare a list of infrastructure issues on which the sector may need to advocate in the future. Where regions have insufficient state finance or commitment to the sector, it may be necessary to look at alternative funding models.
  • IATA should use the strategic review of the Worldwide Slots Guidance as one mechanism to improve the efficient use of capacity and guard against revenue commitment and market allocation of slots.