Thriving on disruption
The pandemic has proven seismic across aviation - but not terminal. In common with other segments, the ground handling industry will likely survive, but it cannot afford to return to pre-pandemic norms. Players should use the opportunity presented by today’s lower volumes to get ahead of the trends that can shape the coming decade.
COVID-19 may have pushed the Fourth Industrial Revolution out of the headlines, but it has not stopped it. Ground handling can expect to see significant disruption in the coming decade from technologies such as: AI, Big data, IoT, EV and AV, Synthetic and hydrogen fuels and VTOL.
The ground handling ecosystem will need to evolve rapidly in response to these technologies and others. Players looking to thrive in the post-COVID normal need to assess now both the threats and opportunities presented for their long-term strategy.
Implications: new business models, alliances, investments, M&A
Aviation continues to be one of the sectors hit hardest by COVID-19, but should eventually return to and exceed pre-pandemic volumes. There is an urgent need to evolve ground handling capabilities to keep pace with expected transformation across the sector.
We can summarize the implications by player type:
Don’t just expect to go back to 2019 – use the multi-year recovery to innovate and invest now for the longer term.
Be more proactive, lobbying government as required to strike the balance between competitive tension among ground handlers, and the synergies of airport level coordination and assets.
Don’t be ‘penny wise, pound foolish’ when it comes to ground handling contracts. Analyze asset utilization and other ‘hidden’ costs to determine the true cost of contracts.
Make sure you are helping ground handlers to modernize with automation, integrated IoT / data-driven decisions, and a range of powertrain options, not simply relying on legacy equipment offerings.
Crisis and opportunity
The first two years of the 2020s have been characterized by a fight for survival for many ground handlers, enduring substantial numbers of layoffs or furloughed staff. But the ever-shifting industry consensus suggests flight volumes likely recover at some point around mid-decade.
When global travel resumes in earnest, ground handling should not just aim to return to 2019 processes or technology.
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The fundamentals underpinning growth in global travel will survive the COVID-19 outbreak.
Download this edition for:
- Analytics on the impact of COVID to the aviation industry
- Short and long term expectations on how the industry recovers
- How international airports are ensuring efficiency
- Perspectives from various industry experts
To learn more about the topics in this edition or strategies in the aviation industry, contact your local KPMG advisor or Christopher Brown, author of this publication.