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Thriving on disruption

The pandemic’s impact on the aviation industry has been seismic – but not terminal. With turnaround promises expected to exceed pre-COVID levels by mid-decade, the ground handling industry cannot afford to return to pre-pandemic norms. Right now, with airports well decongested, is the time to get ahead of trends that can shape the coming decade. Christopher Brown, our Head of Strategy, outlines how airlines and airports should start planning now.

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 summarise the implications by player type:

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Ground handlers

Don’t just expect to go back to 2019 – use the multi-year recovery to innovate and invest now for the longer term.

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Airports

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.

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Airlines

Don’t be ‘penny wise, pound foolish’ when it comes to ground handling contracts. Analyse asset utilisation and other ‘hidden’ costs to determine the true cost of contracts.

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Supply chain

Make sure you are helping ground handlers to modernise 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 characterised 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.

Taking advantage

When global travel resumes in earnest, ground handling should not just aim to return to 2019 processes or technology.

Download Aviation 2030

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

Get in touch

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.