ANALYSIS: Reflections from Aviation Festival Asia

Singapore once again recently hosted the Aviation Festival Asia event, bringing together the leaders of several airlines, providing a pulse-check of the industry and a peek into the future.

World Travel and Tourism Council president and chief executive Julia Simpson highlighted how travel continues to grow, with a focus on business travel.”[IATA director general] Willie Walsh said business travel won’t come back until 2025. It actually came back last year and broke all records,” she says. “I know you have to look at it region-by-region, but business travel is definitely back.”

Similarly, during a panel discussion on the second day of the conference, Jetstar Asia chief executive John Simeone pointed out that travel has continued to grow.

“What we saw after Covid is that people are prioritising travel. There are impacts from cost of living [issues], geopolitical tensions, but people do prioritise travel,” he says.

CONSOLIDATING DATA

The strong health of the airline industry does, however, create challenges around data and decision-making across the value chain.

During a presentation at the Festival, Cirium’s vice president product, Cirium Sky Andrew Shanks talked of how analysts in the aviation industry are real-time superheroes that combine multiple data sets with expertise to make decisions.

With the application of new technologies and data science, those superheroes are being given new tools that can assist with data processing and look further forward to predict future risks and opportunities.

“As the operational side of the airlines and airports move up that analytical curve from just understanding what’s happened through predictability into prescription, we’ve got some big, big opportunities.”

Added to that, by consolidating datasets, airlines can unlock deeper insights into not only their own performance and optimisation, but benchmark and compare against competitors. He uses block-time analysis as an example.

“It’s always been the case that we can understand our own block time analysis, but how do we feed that back into the scheduling side of the business? How do we have that consolidated information that also looks at our competitors and what they are doing in this particular area? So, it is really thinking about consolidating the data.”

AI? YES, BUT IT NEEDS TO SHOW RESULTS

Shanks and others also touched on the application of artificial intelligence across the aviation value chain, with several exhibitors focused on applications including customer service, revenue management and managing operational disruptions.

Air India Express chief executive Aloke Singh made the eloquent point that airlines are inherently a “giant optimisation problem”, and so using AI could help to break apart data silos within airlines to drive productivity could ultimately help lower their unit costs. “There are literally hundreds of areas I can think of [to apply AI]”.

Flyadeal chief executive Steven Greenway was more circumspect, comparing a lot of the “noise” around AI to “like Blockchain was 10 years ago” with many vendors promoting promising ideas, but few real case studies.

“It’s not that we don’t believe it, I’m sure in certain applications in certain areas and so forth, absolutely,” he says. “But a lot of it’s still vapourware in terms of practicality, in my mind, to be brutally honest.”

TARIFFS? A SECONDARY ISSUE TO GROWTH

As the conference was on, outside the chatter around US tariffs was hard to block out. Inside though, few speakers seemed worried about direct impacts in Asia Pacific, at least in the short term.

“Risk is something that we always keep a look out for. At this point in time, we don’t see any impact…But generally speaking we are watchful of what’s going around. The things that are closer to home which is something that concerns us more – taxation, fuel, airport tariffs,” says Air India Express chief executive Aloke Singh.

Cebu Pacific chief executive Mike Szucs saw some risk if tariffs impact on the movement of aircraft parts, but the bigger risk is the impact the macro environment.

“If [tariffs are] going to impact on economic growth in the Philippines or this region, then we will see an impact on travel,” he says.

INDIA, ARISE

Prominent in the keynotes were the heads of two of India’s budget carriers – SpiceJet chairman and managing director Ajay Singh and Air India Express’s Aloke Singh – and both were touting the strong growth of the Indian market.

Illustrating the point, SpiceJet’s Singh says: “You know build the road and the traffic will come? In India, you put a flight on, and the traffic is on, pretty much…So for us the challenge is not so much about finding destinations as it is about getting capacity.”

“From our perspective the growth drivers are really demographics, diaspora and GDP. These are very well placed to see us growing for the next decade and beyond,” says Air India Express chief Aloke Singh.

“There is a huge outbound opportunity that we see out of India. We see a lot of growth opportunities out of non-hub airports.”