Airlines and Debt: Dealing With the Long-Term Burden of the Pandemic
The global aviation industry faced its worst challenge ever with fleets all over the world remaining grounded for several months. Even today, the global air travel volume is much lower than where it was a couple of years ago. In fact, experts predict that in the best case scenario, the passenger numbers that 2019 had registered, wouldn’t be back until 2024. Business travellers generate more money for the airlines due to their premium nature. However, this segment would continue to operate below the 2019 levels even in 2024.
The biggest impact that the pandemic which led to the eventual grounding of fleets has significantly raised the debt on the airlines all over the world. Aviation companies burn a lot of cash as working capital and in the absence of the revenues, the cash burn would keep adding to the debt pile. Whether it is maintenance of the aircrafts or paying the salaries to pilots and crews, all of this only adding to the aviation sector’s debt. As per the estimates, the industry is likely to accumulate debt to the tune of over $1 Trillion by 2024, the year when complete normalcy is expected to return.
However, this mounting debt and the lower passenger volume also implies that aviation sector businesses such as airlines, air-cargo companies as well as private fleet operators need to maximize their revenue and profitability. An advanced Flight Operations Suite is one of the main technologies that will help the airlines reduce their cash burn and in turn the debt burden. Cutting-edge Flight Operations Suite offered by a leading global service provider would come integrated with a holistic IoT, AI and Data Analytics integration.
Some of the leading airlines are already using such advanced Flight Operations Suite to automate a number of critical operations such as predictive maintenance, asset tracking in real-time and empowering their workforces. Integration of IoT tools with robotics and Data Analytics has the power to dramatically alter the efficiency and economy of flight operations as well as the maintenance needs of airliners.
For aircraft that are on-ground, it is important to test their preparedness. This is where an advanced flight operations suite can be of use, courtesy of an option to set digital flight test programs that can simulate and analyse an aircraft’s status and call for predictive maintenance. Further, wherever possible, the software-driven approach would enable automation of minor yet time and cost consuming operational processes. For instance, in a typical scenario when an aircraft develops a snag in mid-flight, the pilots notice it, take the plane back to the ground and then the maintenance crew carries out analysis to identify the problem and rectify it.
Depending on the problem, the resolution time could vary from hours to days. However, an advanced Flight Operations Suite would be a holistic IoT and AI setup that will automate the performance monitoring aspect. An aircraft part would automatically identify and report that it is not functioning properly. The aircraft would then send a message to the ground maintenance crew about the problem it is facing . It would enable the maintenance crew on the ground to be ready and waiting with the right strategy/spares or the personnel needed to handle the problem.
This kind of proactive alerting and predictive maintenance is going to save a lot of time spent on ground and in maintenance, allowing the airlines to operate more flights, reduce the time and money spent on aircraft upkeep and eventually incur less debt.
This kind of automation and digitization of operations is what airlines need today and a world-class Flight Operations Suite is the first thing they should go for as a part of their digital overhaul.
