Need I say Moores

Can the air transport industry be ‘Uber-ized’?

by Victoria Moores
Nov 10, 2017

Uber has shaken up the taxi market. Could the same happen to air transport? The simple answer is yes. The question is when the next big change will come, or whether it’s already happening.

What we’re talking about here is disruption, but disruption comes in many forms, which is what makes it so unpredictable.

Firstly, there’s business-model disruption. The strongest example of this over recent years was the birth of LCCs, their evolution into hybrid carriers targeting the business market and their recent shift into long-haul and connecting flights.

Speaking at the recent Airport Operators Association (AOA) conference in London, International Airlines Group (IAG) CEO Willie Walsh said established airlines were arrogant and simply didn’t believe the LCC model would work. Back then, Aer Lingus turned down the chance to buy Ryanair for 29 million Irish pounds. “The truth is that if Aer Lingus had acquired Ryanair, it wouldn’t have been developed, it would have been shut down,” Walsh said.

LCCs are now moving into long-haul, but the established players still seem to believe long-haul LCCs are chasing a different market. History has shown that both business and leisure travelers like cheap fares.

The next big model shift seems to be digital. Customer expectations are changing, so airlines need to sharpen up their digital game or die. Amazon or Google don’t need to operate a single aircraft to be a disruptive threat.

As with Uber, aviation employment models are also in the spotlight. Freelance labor and social conditions are coming under scrutiny, risking bad PR and strike disruption, but the customer hunger for cheap fares continues unabated, creating a real dilemma for airlines trying to strike a profitable balance between costs and revenues.

Then there are the tools of the business. An aircraft is simply a vehicle for long-distance travel. Emergent technologies, like the Hyperloop, UAVs and flying cars, could change the way people and goods travel.

On top of all that, there are external shifts – such as Brexit, security threats and disruptive regulation (like the travel and laptop bans) - which all take their toll on the industry and are disruptors in their own right.

The difficulty is there are a lot of unknowns and, in the words of horror writer H.P. Lovecraft, “The oldest and strongest kind of fear is fear of the unknown.”

Nothing stays still. Airlines that want to emerge as winners will need to ditch their arrogance and be ready for anything.

Victoria Moores

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