Global Full-service Airlines Market
Key Trends:
- Airline industry suffered during the pandemic: The impact of covid-19 on the airline industry was notable. The social distancing norms and travel restrictions that came into action caused a significant slump in demand for the airline industry. With international travel largely coming to a halt, FSCs were affected more than the LCCs. The cut-short in seats and reduction in the number of flights accelerated the losses and made the airlines run on reserves. The repatriation flights were the major relief for international carriers during the pandemic. Flag carriers have advantages over independent airlines because the respective governments are providing a vital lifeline. With limited cash reserves on hand some of the carriers will possibly have to be nationalized. The non-flag carriers may have to consider possibilities for mergers.
- Business trips to take longer to recover: Now that remote work has become common among corporates, it is likely to stay for a while, even post-pandemic. This will lead to fewer business trips in the near future, leading to business travel taking longer to recover. As most of the profits earned by long-haul flights are from a small number of high-yielding business travelers, and as their number has plummeted drastically during to the pandemic, the FSC market is expected to take longer to recover compared to LCC market. According to GlobalData, the global FSC market is likely to recover by 2024.
- Airlines in debt, price rises and government support to the rescue: The pandemic-led losses have caused airlines to borrowing huge amounts of money, to maintain their day-to-day operations. From credit lines to state-provided aid to bond issuances, the list goes on. Therefore, the sector is likely to see an increase in ticket prices, so that the airlines can stay afloat and service the debt. The recovery period may see demand surpassing the supply, causing price increases. The government support will come in a way that there will be an increased level state ownership such as in case of Air Baltic, TAP Air Portugal, and Lufthansa Group.
- Technology is driving the industry: In the wake of the global pandemic, with social distancing gaining most of the spotlight, the demand for technology-integrated, contactless services is increasing. With rapidly changing customer preferences and the great affinity of customers for quality services, the need for technology advancements is like never before. From online booking/payment to contactless check-in to face recognition, technology integration is trending. To further promote the contactless experience in their inflight entertainment, some airlines are implementing a 'bring your own device' model.
Who are the Leading Players?
American Airlines is an airline holding company which offers passenger and cargo air transportation services. The group operates wholly owned regional airline subsidiaries and third-party regional carriers operating as American Eagle. Lufthansa is an aviation company that offers scheduled passenger and air freight transportation services. The company offers logistics services through its own freighters, chartered cargo aircraft and belly capacities on passenger aircraft. Delta is a global airline company which provides scheduled air transportation for passenger and cargo. Its service portfolio includes passenger transport; cargo transport; aircraft management; professional security; training and consulting; aviation solutions; vacation packages; and maintenance, repair and overhaul (MRO). It also has bilateral and multilateral marketing alliances with foreign airlines, and service agreements with multiple domestic regional air carriers. Emirates is an air transportation service provider. The company provides services such as passenger transportation, cargo services, flight booking, hotel booking, car rental, check-in, flight status and baggage allowance services.