The industry is experiencing a severe double recession that is cutting passenger and freight traffic. What were the results of 2020 for the aviation industry?
According to the International Civil Aviation Organization (ICAO), the cost of the coronavirus pandemic to the aviation industry last year amounted to $ 391 billion in lower revenues as 60% fewer passengers took to the skies.
Financial difficulties will continue into 2021 as airlines grapple with a double recession. Experts maintain their forecast for a prolonged drop in passenger demand. It will likely lead to a decrease in the number of airlines for several years.
According to ICAO estimates, the reduction in gross income of the aviation sector in the first half of the year will be from 163 to 194 billion dollars. But there is optimism in many quarters that business will start to improve as new COVID vaccines become available to more people.
The International Air Transport Association (IATA) estimates that the aviation sector’s revenue deficit was about $ 510 billion. At the time, the trade group said the airlines would lose a total of $ 118 billion in net profit. Last year, IATA twice revised its estimates downward as the crisis escalated.
A lack of liquidity has forced several carriers to go bankrupt and others to receive government aid or bankruptcy protection.
Overall, aviation operators received $ 500 billion less in revenue in 2020, according to ICAO. Airports lost $ 115 billion in expected revenues and air navigation service providers lost $ 13 billion in revenue.
Airlines carried 1.8 billion passengers in 2020, up from 4.5 billion a year earlier, according to an ICAO report.
The UN said passenger traffic could begin to improve after a dismal first quarter, depending on the effectiveness of COVID vaccination programs and new approaches to managing the pandemic. Aircraft occupancy is expected to be 40-47% below the 2019 baseline, after a 50% cut last year.
In the most optimistic scenario, passenger traffic is expected to recover to 71% of the 2019 level. A gloomier scenario suggests a recovery in the passenger business of only 49%. International traffic, which determines the number of operating wide-body aircraft that shippers need, are projected at 53% of the pre-crisis level. This is a forecast at best, and only 26% at worst.
Although the global fleet of all-cargo aircraft grew 22.4% to 673 units in 2020, according to ICAO, manufacturers, retailers and agricultural producers rely heavily on passenger flights to transport their goods. More than 50% of air traffic is transported by passenger aircraft. When passenger networks operate several times less than usual, there is a reduction in the available volumes for transportation, especially on transcontinental routes, where larger aircraft are required. This is why the downturn in international traffic is of particular concern to shippers.
The pandemic began to affect air travel in late January 2020 when an outbreak was discovered in Wuhan, China. Initially, the flight cancellations were limited to a few countries, but by the end of March, the air transport system had effectively stopped. At that time, the number of international passengers dropped 98% compared to the 2019 level, and the number of domestic passengers fell by 87%.
Passenger traffic recovered slightly during the summer, but the upward trend was short-lived and began to decline again in September, when a second wave of diseases hit Europe. Then the governments reintroduced restrictive measures. According to the latest data from IATA, international passenger traffic in November was down 88.3% from the previous year.
Recently, governments have responded to new, more prevalent strains of COVID by further restricting borders. Air Canada and WestJet this month began cutting flights and laying off workers after the Canadian government introduced pre-departure testing requirements in addition to local restrictions and quarantine measures.
New data from aviation analyst firm Cirium shows that average weekly flights are down less than a quarter from 2019 on Christmas Eve. But after the peak of the holidays, that figure dropped to 35% of the deficit. Cirium said about 30% of the world’s passenger fleet remains unused.
Aviation industry executives expressed disappointment at the strict travel restrictions and quarantine requirements, saying that a robust pre-departure testing regime can keep flights safe and help air carriers stay financially afloat.
On January 17, IATA appealed to the members of the European Union to agree on a single European digital certificate for COVID-19 vaccination. It would allow vaccinated individuals to travel freely across Europe without being tested for COVID-19. IATA has also developed a trial application that allows passengers to create a “digital passport”. It allows you to make sure that their pre-travel test or vaccination meets the requirements of the destination. Travelers can provide authorities and airlines with test and vaccination certificates to facilitate travel.
The ICAO report highlights that the restrictions on the pandemic have had a disproportionate impact on the international operations of carriers. In general, the volume of domestic passenger traffic decreased by 50%, and international – by 74%.
International flights continued to decline by about three quarters from the same period last year, compared with 35% of domestic flights, according to Cirium.
The Asia Pacific and North America regions have emerged as leaders in the global recovery in total passenger numbers due to their sizeable domestic markets. At this time, a sharp drop has been observed in Europe since September. Traffic in Latin America and the Caribbean improved in the fourth quarter, while recovery in Africa and the Middle East was less robust.
Based on materials from ICAO
Last week, FedEx Inc. (NYSE: FDX) announced the completion of the integration of TNT Express, a long process that required complex decisions.
FedEx, which was founded in 1973 in Memphis, Tennessee, acquired TNT Express in May 2016 for $ 4.8 billion.
At the same time, United Parcel Service had to fight for the purchase. The latter backed out of a $ 6.8 billion deal for TNT Express after European antitrust authorities objected.
When it was announced nearly four years ago, the deal was hailed for several reasons. A well-known European brand has been rescued from a difficult time and saved thousands of European jobs as a result. The FedEx Express global air network and the TNT Express intra-European road system were effectively intended to become a one-stop shipping hub for European and non-European companies on the continent and around the world. It would also strengthen FedEx’s position in terms of expected growth in e-commerce in Europe.
For FedEx, the deal would benefit twofold: it would seemingly gain a foothold in Europe and keep TNT Express out of UPS.
However, the integration was not long in coming. TNT Express, which was already in trouble when UPS made its offer, continued to slide down. TNT Express’s physical infrastructure, and in particular its information technology, was outdated and decayed when it was approached by FedEx. Sales of TNT Express services in Europe were weak, integration was difficult, and problems of duplication of delivery networks remained.
Shippers have become nervous about the operational problems that usually accompany the integration of large companies across continents. FedEx also struggled with a sluggish European economy in the second half of the decade, as well as an unfavorable mix of low-income freight generated by TNT Express.
As a result, TNT Express has gone through two leadership changes. An additional blow was the large-scale cyberattack of the NotPetya virus on the company’s servers in 2017.
Additionally, in 2019, Thornton Law Firm LLP filed a lawsuit against FedEx Corporation on behalf of its shareholders. According to the statement, false and misleading reports and statements by the corporation’s top management have resulted in “tens of millions of dollars in losses” for investors. That is, the lawsuit accused FedEx of the fact that its management knew that the purchase of TNT would not bring investors the returns that were originally expected, due to the consequences of a cyberattack soon after the deal.
The lawsuit alleges that the executives “made substantive and misleading statements and / or failed to report that:
FedEx acknowledged some concerns in June 2018, but continued to insist that TNT had largely recovered and its merger goals would be met. However, in December 2018, all the lies came out “in full” with the publication of the second quarter reporting, which showed a significant decrease in profits.
“FedEx acknowledged that the sharp decline in profit was due to lower shipping volumes in Europe and an unfavorable restructuring of TNT’s customer portfolio with an increase in the share of low-margin products following the cyber attack. FedEx also downgraded its earnings forecast and announced that TNT’s profit targets no longer appear to be achievable. On the news on December 19, 2018, FedEx’s share price fell 12.2% to $ 162.51. ”
At auction on January 22, 2021, the FDX share was worth $ 254.08.
FedEx originally planned to spend up to $ 800 million on integration, but in the end, the costs were doubled. FedEx is solving the problem radically.
FedEx Express said in a statement that as it operates two large European networks linking similar geographic regions, thousands of jobs have become redundant. The reductions will affect operating and support personnel. In Europe, up to 6,300 employees will be cut, which will require severance payments of up to $ 575 million.
But these actions will save up to $ 350 million annually starting in 2024. Analysts at UBS said that FedEx could gain more than $ 200 million in additional annual savings by rationalizing costs such as fuel, purchased services, maintenance, rents, and also depreciation and amortization.
Most of the cuts are expected to take place at the division’s intra-European hub in Liege, Belgium, which was the hub for TNT Express. FedEx’s air delivery network will merge with TNT Express’s extensive European ground delivery network.
FedEx Express will use a dual hub network across the continent. The primary hub at Paris Charles de Gaulle International Airport will serve intercontinental air travel. Liege, meanwhile, will operate as a secondary site.
The European structure is similar to that of the FedEx air hub in the United States, with Memphis being the primary hub and Indianapolis the secondary hub. Indianapolis has historically been known as a “daytime sorting” facility, handling cargo that does not require supercritical response.
FedEx Express was vague about the future features of Liege, saying only that the hub will “provide customers with excellent service all year round.” Liege was thought to focus on supporting FedEx Express’s intra-European operations. It can also act as a safety valve in the event of a de Gaulle outage, said Dean Machuba, a longtime FedEx executive and now managing partner at North America, a consulting company Last-Mile Experts LLC.
The integration process is hampered by many challenges and is unlikely to be fully completed before calendar year 2022. But now FedEx is counting on the costly acquisition to help long-term growth.
The completion of the TNT Express integration is welcome news for FedEx shareholders. Integration costs worsened the company’s financial performance, and successful completion of this process will help FedEx gain a foothold in the European market.
Based on materials: American Shipper, Freedom Finance, FedEx
Despite all the challenges, 2020 has proved to be a landmark year for electric aviation. Over the past three years, and especially in 2020, electric planes have set new flight range records, mastered short commercial flight routes, won the championship on a par with American military aircraft and attracted attention of major airlines.
In June, European regulators granted Velis Electro the world’s first electrical “type certification”, recognizing the entire aircraft structure as safe and ready for mass production. The Slovenian company Pipistrel, which is developing this electric aircraft, has, over the past few years, together with innovative partners, on the border of the pioneer in creating a breakthrough in the field of commercial aviation.
The company’s first electric aircraft, the Alpha Electro, was first certified as airworthy by the Federal Aviation Administration (FAA) in 2018. The Alpha Electro is a two-seater electric simulator that meets the needs of flight schools. It has a short take-off distance, powerful 1000+ RPM lift capability and endurance per hour plus a 30 minute headroom. The Alpha Electro is optimized for driving mode, where up to 13% of energy is recovered with each set, increasing the range of operations while allowing landings on short fields. The electric plane is powered by a 21 kWh battery – roughly a fifth of what you’d find in a Tesla Model S.
Technologies that were developed in-house specifically for this aircraft have reduced the cost of ab-initio pilot training by as much as 70%, making flying more affordable than ever before. The ability to train at smaller aerodromes near cities with zero CO2 emissions and minimal noise levels is also game changing! Considering the rising cost of fuel, this aircraft is making a significant difference in flight training.
The company’s website even offered the opportunity to purchase a plane for $ 140,000 and fly on its own electric plane.
In 2018, Pipistrel tested an Alpha Electro electric plane commissioned by the Norwegian airport operator Avinor as part of a plan to convert all local passenger air travel to electric aircraft by 2040. In 2019, there was an emergency landing during a demonstration flight, so the plan was postponed for an unknown period, but given that Norway is the leader in the number of electric vehicles sold, and domestic flights are among the busiest in Europe, it is highly likely that it will be implemented.
It is worth noting here that not only Pipistrel experienced difficulties at the beginning of their journey. In January 2020, Eviation’s all-electric prototype flashed during ground tests at an Arizona airport, likely due to overheating of the batteries (the company claims it will enter service by 2022). Uber sold its aviation division Elevate to startup Joby as the financial outlook for electric vertical take-off and landing (eVTOL) remains too far from profitable.
Pipistrel continued to research and improve their own developments and the subsequent victory of the company was Velis Electro, which we mentioned at the beginning. Velis Electro can be commercially operated and is fully approved for pilot training as well as other operations. Thanks to its quietness, Velis Electro can bring flight training much closer to urban areas without negatively impacting the quality of life of communities. With its certified engine type and fault-tolerant battery system, Velis Electro has demonstrated a level of safety equivalent to or better than conventional powered aircraft.
The company has not spared the development of new products for the air transportation industry. Taking into account the trend of last mile delivery, it also has Nuuva V20 in its electrolitakiv line – a light cargo plane – courier carrying cargo up to 20 kg. The first customers will be able to ship in 2021.
With EASA certification, growing interest in electric aircraft and the likely demand for aircraft in the cargo and education sector, Pipistrel and Green Motion announced a change in partnership in 2020 to develop a versatile, future-proof, green turnkey charging technology for electric aircraft. …
This new charging infrastructure will comply with the regulations of EASA, the European Union Aviation Safety Agency. Thus, the company provides the market not only with new generation aircraft, but also prepares a platform for the full functioning of the era of electric aircraft.
Significant advances in batteries, electric motors, and other equipment found in electric cars – as well as hundreds of millions of dollars in aeronautical purposes – have brought electric technology closer to commercial takeoff. By 2035, investment bank UBS estimates that the aviation industry will be 25% hybrid or fully electric.
Half of all global flights are less than 500 miles. This is the best segment for electric aircraft. Fewer moving parts, less maintenance, and cheaper electricity means costs can be more than halved. For airlines, e-planes are making the new routes now fully accessible by cars and trains, thanks to lower fuel, maintenance and labor costs.
Investors are willingly betting on this sector. Since 2015, the top 10 electric aviation startups have raised more than $ 1.2 billion, most of them in the past year (led by Joby Aviation, which invested $ 590 million), PitchBook reports. Airlines are pouring money into the supply chain for electric traffic. Over the past three years, JetBlue Airways has invested $ 250 million in startups in the electric aviation industry, and in the space industry – Intel, Toyota Motor, Daimler and Geely Automobile in China.
The military is also returning to its roots as an early financier of Silicon Valley technology, with the Navy and Air Force providing funds, support, and testing for autonomous and electric cargo drones. Joby Aviation’s four-seater eVTOL recently received an airworthiness certificate from the Air Force to begin military flight missions (19 other companies are willing to do the same).
Electric drive solves another problem for aviation: carbon emissions. Aviation emits over 11.6% of the world’s CO2 emissions, and this figure could reach almost a quarter by mid-century. In the absence of alternative fuels, an increase in the number of air passengers that will double by 2035, electricity may offer the industry a better path for development.
Based on materials from Yahoo Finance, Our World in Data
Cargo companies fly their cargo on various aircraft. The types of aircraft utilized for air cargo can range from wide-body freighters to small turboprop “feeders.”
Wide-Body Freighters: Accommodate containerized and palletized freight on upper and lower (belly) decks and typically operate at airports in major metropolitan areas. They are used on both short domestic and long transoceanic international routes and require long runways for takeoff and landing.
Narrow-Body Freighters: Accommodate containerized and palletized freight on upper decks only and are used primarily on domestic routes throughout the United States, Canada, Mexico, and the Caribbean and serve smaller metropolitan areas and also require long runways for takeoff and landing.
Feeder Aircraft: Express carriers, such as FedEx, DHL, and UPS also rely on feeder airlines that operate small aircraft to support transporting cargo to and from small to medium sized markets to cargo hubs. These aircraft are comprised of piston and turboprop aircraft and do not require long runways for takeoff and landing.
Aircraft of the French company Airbus are widely used for cargo transportation all over the world. The great demand for them is due to the high quality of the aircraft. Among the most popular models are the following:
The wide-body Airbus A310 is capable of carrying up to 7 tons of commercial cargo one time. Its cargo cabins can accommodate up to 10 containers, piece cargo, pallets.
Narrow-body aircraft Airbus A319-100 (A319) – used for short and medium-range flights. It can accommodate cargo with a total weight of up to 6.8 tons, which is placed in the front and rear compartments, as well as in the bulk cargo compartment. The Airbus A320-200 (A320A) model, which has similar technical characteristics and capacity, is not far behind.
Airbus A321-100 (A321А) – known as the modified A320, belongs to the largest airliners of this family, its maximum takeoff weight is 93,500 kg.
The American corporation The Boeing Company produces aircraft that are also perfectly adapted for passenger and cargo transportation. Their main advantages are reliability, versatility and the ability to carry out many hours of flights. The following models are especially popular:
Boeing 737-300 (В737-300) are narrow-body airliners that can be easily modified into cargo versions. They are capable of transporting 5.73 tons of commercial cargo by air.
Boeing 767-300 – airliners with a maximum load of no more than 9 tons, have 5 compartments for various types of cargo. They are able to carry out flights of medium and long distance.
Boeing 777-200 are wide-body long-haul vessels. They can accommodate up to 18 containers in the front compartment, up to 14 in the rear compartment, piece goods, mail, luggage, up to 17 cubic meters in volume, in the bulk cargo sector.
The coronavirus crisis of 2020 has been a strong impetus for changes in the types of aircraft used for transporting goods and how a happy future is predicted.
Air cargo is innovating and moving forward rapidly, but still remains the most expensive mode of transportation. Air travel accounts for just 1 percent of the world’s freight traffic by volume, but 35 percent by value. Therefore, in the era of decreasing orders, total economy caused by the crisis, the need for new ways to combat such costs and improve efficiency in the interests of both the consumer and the logistics company was felt even more strongly.
For example, small aircraft are increasingly coming to the attention of the market. This trend is also exacerbated by the growing crisis in the cost of airport maintenance, the problem of lack of adequate air infrastructure in remote areas of the world, and strict requirements for CO2 emissions into the atmosphere. There is a clear need for light, small-sized, ecological aircraft that could easily cover short distances and deliver goods where it takes a long time for a truck to travel and there is no large airport or runway of the required size.
The Chinese company Autoflight this year began testing the V400 Albatros electric UAV prototype, which was presented on September 13, 2020 at the World UAV Federation Congress in Shenzhen, China. A cargo version is currently being tested.
The V400 debuted. Its maximum take-off weight is 400 kg, and its payload is 100 kg, and its maximum take-off height is 5000 m. Autoflight is developing two versions of Albatros: an all-electric with a range of 300 km at full load and a hybrid-electric with a range of up to 1000 km.
For vertical take-off and landing, the V400 uses 8 propellers driven by separate electric motors. For horizontal movement, the all-electric model has two engines with pull and push propellers, while the hybrid has one internal combustion engine at the rear of the fuselage.
With an AI flight control system, multiple sensors and radars to assist with takeoff and landing, and the ability to detect and avoid obstacles, the V400 will be able to fly fully autonomously.
In August 2020, online giant Amazon received approval from the Federal Aviation Administration (FAA) to deliver goods by drones to the United States. Last year, Amazon unveiled its MK27 vertical take-off and landing hexagonal drone. It can transport parcels weighing up to 2.2 kg in about half an hour.
Delivery will be carried out within a radius of 12 km from the warehouse. The drone is equipped with a set of smart sensors that allows you to land without affecting power lines or posing a hazard to people or pets.
The FAA has twice issued such permits in the United States. The first received the Wing Aviation service, owned by the Alphabet holding company, which owns Google. The second went to a division of the UPS express delivery company.
In September 2020, Austrian company Schiebel tested a Camcopter unmanned aerial vehicle, delivering parts from shore to the Troll A oil platform of Norwegian energy company Equinor. The aircraft flew from the Mongstad industrial area.
During the tests, the Camcopter unmanned helicopter flew 102 kilometers. During the flight, the device conducted a training search and rescue operation. The drone delivered a spare part manufactured using additive technologies to the platform. After delivery, Camcopter surveyed the oil platform and then returned to the departure point.
The conditions that are now developing in the world contribute to the search for innovative solutions for the implementation of air cargo transportation. Drones can indeed solve the issue of delivering small-sized cargo over relatively short distances, which will significantly relieve the market and, in combination with high-tech drones, will compete with large aircraft.
Only time will tell how effective the use of such aircraft in air travel will be, but the likelihood that very soon the market will have its own “Tesla” and “Smart” is high enough.
Based on materials from Transmetrics, Wired, UASweekly
Digital transformation is a term widely used across industries to describe the pace of technological progress that is transforming processes, products, services, and operations. Digital transformation is synonymous with IT investment and disruptive innovation, although it is a much broader and more comprehensive term that also describes changes in business models, corporate culture, and people.
For most aviation end users, digital transformation is meeting customer needs and driving new technologies and innovative programs. At an airport, typical digital transformation projects fall into 5 main categories (or areas of work):
These are projects related to data discovery, data exchange, data integration and analytics, which are typical features of the IoT (Internet of Things) environment, with the aim of improving situational awareness.
The largest and most efficient project in this workflow is the Operations Control Room (OCC), which is the airport’s command center. The investments are aimed at expanding the role of the control room beyond security and integrating new data sources to implement the Total Airport Management concept.
In addition to data integration and improved visualization, new technologies are being explored, including artificial intelligence (AI) with applications focused on predicting KPI performance and the use of digital twins to manage big (and real-time) data.
An welcomed result of digital transformation is that airports are moving beyond their reactionary day-to-day thinking and can now plan for the future by executing multiple scenarios and adjusting forecasts with real-time data, thereby becoming more resilient. Indeed, fault management starts in the control room.
These are projects related to data storage, be it cloud or local storage. However, the biggest project affecting this area of work is cybersecurity, as airports rely less on IT providers and more on their own resources to protect systems and data.
AI, Edge Analytics, and Blockchain are some of the most promising technologies in this workflow.
Passenger and baggage transport projects are attracting the most publicity and are an important investment area for the airport. The focus is on increasing passenger and luggage capacity through automation and increasing customer satisfaction by providing seamless passenger service from the sidewalk to the gate.
Effective projects relate to advanced baggage handling systems, passenger self-service points, and improved passenger and baggage screening systems at checkpoints.
Most industry initiatives, including the ACI and IATA New Travel and Technology Experience (NEXTT) program, also focus on this area. Biometrics, artificial intelligence and robotics are becoming increasingly popular technologies in this direction.
These are projects aimed at improving the efficiency, capacity and safety of the air zone. Airside investments are concentrated in five key areas: gate and apron, aerodrome, control room, operations management and security and safety.
Collaboration plays a key role in airside operations and is another area for industry initiatives, as evidenced by A-CDM and ACI Airport Community Recommended Information Services (ACRIS).
The airside will also be the largest area for AI and autonomous operations, as it is a controlled area with predefined routes and roles for personnel, motorized and non-motorized equipment.
Administration includes internal operations management and all aspects of asset and equipment management. Projects focus on improving energy and waste management as well as asset utilization and preventive maintenance.
As with all areas of work, artificial intelligence has an important role to play in this workflow as a key technology.
1. Global airport spending on digital transformation in the air zone will increase from $ 4.58 billion in 2018 to $ 5.6 billion by 2023. The fastest growing segment is operations management, which will grow from $ 960 million to $ 1,180 million over the same period. Investments are concentrated in A-SMGCS, VDGS, approach optimization and flow control systems, ALCMS, A-CDM, AOCC and analytics-driven forecasting systems.
2. Global airport spending on digital transformation of land areas will grow from $ 3.9 billion in 2018 to $ 4.6 billion by 2023. DT’s fastest growing segment is self-service, which will triple from $ 220 million to $ 660 million over the same period. Investments are focused on public platforms, cloud storage, smart security and passenger traffic management.
3. Digital transformation programs are developed and managed by airport IT departments, aim to improve customer service, and last an average of 5 years. DT’s vision is to implement projects to improve passenger experience and operational efficiency while moving from customer-centric processes to a customer-centric business environment.
4. The future airport will be built on data. More than 90% of the data collected by airports today is not used except in visualization applications. There is significant potential for optimization through big data analytics and the use of artificial intelligence. Eventually, airports will move to an ecosystem where stakeholder collaboration is effective, systems interact, and passengers have more control over their journey through personalization.
five. Disruption management offers the greatest potential for both airport operators and technology providers as there are no airport solutions available on the market today. The customer satisfaction, cost savings, and cost avoidance associated with effective failure prediction, management and recovery are significant.
6. Resistance to change, cost of implementation and poor business model design are the main reasons for delays in digital transformation programs, as well as general innovation at airports.
According to a survey of global airports, most airports (68%) are still running DT programs. So, which projects have already been implemented and which ones are yet to be implemented?
Typical Landside DT projects that have already been implemented include:
Among the Landside DT projects that have yet to be completed by the airports, the following are priorities for the next 12 months:
Typical Airside DT projects that have already been implemented include:
Among the Airside DT projects that have yet to be completed by the airports, the following are priorities for the next 12 months:
More than most other sectors, aviation has embraced digital transformation. The future will be increasingly digital and high-tech. Wherever you look, airports are turning to connected technologies such as the Internet of Things (IoT), AI, cloud computing, and more.
The SITA Air Transport Trends for 2017 report showed that more than half of all airports surveyed are planning significant investments in AI over the next few years. Technologies under investigation include self-registration, which uses facial recognition data that Air Asia uses.
Hong Kong International Airport, for example, aims to accept facial recognition data and allow passengers to use it as a single token throughout the journey. The cameras will scan faces as they arrive, allowing them to move faster through the terminal to their flight.
Other airports monitor the movement of passengers through their terminals to reduce congestion. They can provide detailed information on crowd movements, highlight potential bottleneck areas, and allow the airport to make infrastructure adjustments and deploy staff as needed to reduce delays.
Heathrow Airport uses smart cards for boarding, which are embedded with all passenger flight and boarding information. It can track them as they pass through the terminal and determine when they might be late. On large screens, they can give instructions to take your time and dig into duty-free shops. If a passenger arrives at airport security too late, they may be sent back for check-in. The airport hopes that this will help cut the 50,000 hours of delays he says are caused by late passengers.
Meanwhile, airport IT systems are becoming increasingly interconnected, bringing information from many different sources to a central dashboard. This is a future where airports are smart and connected, bringing together different technologies over the Internet of Things (IoT) to streamline operations, connectivity, improve collaboration between departments, and increase data transparency.
For example, using tags and sensors, an airport can quickly locate infrastructure and equipment, track the movement and location of baggage, and track the location of aircraft and vehicles in real time.
In the near future, airports will find themselves operating at or near full capacity. Expansion is costly and time-consuming, which means that airports will have to find a way to significantly expand their existing infrastructure. To do this, they need modern digital technology.
In the era of Industrial Revolution 4.0, airports are in what Frost & Sullivan defines as “airport 2.0”. Now the processes are being digitized and moving to the cloud. However, databases are not fully integrated, analytics are not widely used, and automation is at a low level beyond basic processes like baggage handling. Due to the complex environment and the multiple stakeholders involved in any given process, the pace of transformation is slower than in other industries.
Nevertheless, digital transformation projects are underway at many airports, many of which are working on short-term, five-year strategic plans. Some are working towards a vision for 2030 or 2040 by hiring Futures teams that strive to understand the global megatrends that will no doubt shape their business models.
Airports are aware of these constraints and require the input of visionary leaders, IT vendors and industry organizations in designing the future airport, while providing a roadmap for short, medium and long term optimization.
Based on materials from Airport Performance Insights and Cyberrisk International
D.S.L. was founded on November 22, 2005 to deliver medical goods. Therefore, initially the company was named Medix Logistic.
In 2009, the company opened a new direction – valuable goods transportation – and signed an agreement with the world’s largest company Brinks Global Service (BGS). To ensure the safety of valuable goods during their ground transportation, two armored vehicles were purchased.
That year the company also decided to make a rebranding and change it’s name to D.S.L. This abbreviation represents the basic principles of the company:
For over 11 years D.S.L. provides a complex of services on registration and delivery of valuable goods under full financial responsibility throughout the BGS network.
Boryspil International Airport (KBP), Cargo terminal
Despite the demand, no one dared to provide such services. We are the only ones on the Ukrainian market who provide a full range of services in the field of transportation of valuable goods with full financial responsibility.
It’s important to mention here that the airline’s liability is limited to a value (amount) of $ 25 per kg. Valuable goods are usually small and high in value, and therefore have a high probability of loss or theft. Therefore, special control procedures are applied for the transportation of valuable goods:
☑ a special guarded warehouse, equipped with an alarm and limited access;
☑ loading and unloading from the aircraft is organized by a special department (team), authorized to work with this type of cargo;
☑ during transportation with overloads at transit airports, a separate person from our company monitors the unloading of cargo from the aircraft at the time of opening the hatch upon arrival and placing the cargo in the storage. This is also valid for departure. Each movement / unloading / loading is recorded in the report by a responsible person.
General cargo is transported without specified procedures.
We love aviation (airplanes) 🙂 But seriously, it’s very fast delivery option. A cargo is delivered in one day from Ukraine to almost anywhere in the world.
We made the regіstration and delivery of tickets for the UEFA matches that took place in Ukraine. Fans were very pleased.
Our corporate clients record statistics on the time for the whole complex of tasks on registration and delivery of goods from the supplier’s warehouse to the recipient’s warehouse. We are proud that we remain in the first place in terms of delivery speed throughout the entire period of cooperation.
Our European partners were pleasantly surprised when the cargo that arrived at Boryspil airport at 14:00 was cleared at customs and delivered to the client’s warehouse by 18:00.
Hard to say. I understand that all markets are now in constant flux. I expect that there will be an idea on the logistics services market that will change the market and mix all the players. I am currently searching for such an idea.
Since the beginning of the quarantine, the cargo terminal of Boryspil airport did not stop working, but due to a decrease in the number of passenger flights:
The team is the most valuable thing in the company. Each employee is assigned to a certain task and responsible for its implementation. Every day we analyze the past day and plan our next day.
We openly work with clients and do not hide anything. Thus we receive feedback from our clients that in cooperation with us they are always aware of what they are paying for.
I enjoy traveling, learning something new, going into sports. Well, I also try to spend more time with my family.
Cabo da Roca – Most Western point in Europe
We want to expand our service for railway transportation, as well as develop relationships with potential partners within JCtrans Global Logistics Network, which member we became this year.
Cyber-attacks represent one of the most serious threats to the aviation industry. At the very least they can exact millions of pounds in damages, but at worst they could be devastating and allow terrorists to achieve their goals without having to set foot on a single flight. What’s more, the last few years have seen an explosion in the number of attacks.
The sector faces a barrage of attacks every day and is one of the favourite targets of cyber criminals. For example, Israeli airports are said to be fending off three million cyber-attacks daily. They are drawn to it because a combination of digital transformation, connectivity, segmentation and complexity, make the aviation industry both highly reliant on IT and vulnerable to attack. What’s more both the authorities and aviation companies have been slow to act.
The answer requires only one word: data.
Airlines collect enormous volumes of passenger data, including credit card information and passport numbers, from their reservation and scheduling systems and frequent flyer programs. According to Sheridan, “for attackers hoping to cash in on sensitive data, the aviation industry is a gold mine.” And as the risk of suffering a data breach rise, so does the risk of failure to comply with PII/PCI regulations and tougher data protection laws such as GDPR.
Deploying technologies increases the attack surface by expanding the number of targets attackers can use to gain access to systems and the data stored on them.
A U.S. Department of Transportation (DOT) report cites the rollout of wireless technologies to give passengers access to wireless networks and the internet, and the growing adoption of IoT devices to perform functions such as increasing fuel efficiency and automating repairs, as two key avenues that create new vulnerabilities.
Further complicating matters is the challenge of securing remote infrastructure such as airplanes can be cost prohibitive, or impossible, to patch even after discovering a vulnerability.
Airlines also face the cybersecurity talent shortage that plagues so many industries, which makes it difficult to hire the cybersecurity experts they need. According to the (ISC) 2018 Cybersecurity Workforce Study, the global shortage of cybersecurity experts has reached 2.93 million, posing a growing risk to businesses worldwide struggling to find, hire and retain skilled employees.
Outdated IT issues and fragmentation are complicating things. Much of the IT infrastructure in use today is outdated and not designed to address today’s cybercrime challenges. This security flaw is inherently problematic as security teams try to build layers of cybersecurity on top of systems that were not designed for them.
Fragmentation within organizations and the wider sector makes it difficult to adopt uniform approaches. Each airport consists of a huge number of different departments, many of which operate within their own divisions and through their own closed IT systems. More broadly, aviation is global and interconnected, but remains fragmented.
Communication between governments and various organizations is difficult. Many cyberattacks go unnoticed. In many cases, companies may be concerned about the reputational damage that posting a cyber attack could cause, but by not providing information, aviators are missing out on an opportunity to gain insight into possible threats.
“A cyber-attack has the potential to wreak large-scale havoc on major transport hubs worldwide and lead to huge numbers of delays, flight cancellations and heightened security alerts,” says Michael Schellenberg, Director of Integration and Services at SITA.
Such an attack could have an enormous impact not just on aviation sector but also on the wider economy. Problems with air security tend to impact the public consciousness more profoundly than other sectors. A loss of trust or passenger confidence could have a major impact on the industry.
The real nightmare scenario comes if terrorists manage to hack into air traffic control instantly putting thousands of lives in the air and on the ground at risk. On a more mundane note, though, criminals are targeting the network for extortion. One of the most common approaches has been distributed denial of service (DDOS) attacks or ransomware which attempt to lock operators out of their systems.
Aviation is incredibly time sensitive. Even a relatively small outage can have knock on effects throughout the system. In many cases it may not be a particularly widespread attack. It can often focus on one single function, such as the processing of payment information. If this data is slowed, or a number of transactions fail, delays will mount up and passengers will become frustrated.
The hope, with all these attacks, is that the airport will decide that their cheapest option is to simply pay the ransom, and they are often correct. Ransomware has become a multibillion-dollar industry. In 2017 the number of ransomware payments topped the $2bn mark. Operators have become extremely professional in their outlook. They often present themselves as the solution rather than the perpetrators offering targets a link or a phone number which puts them through to a call centre.
It’s a cheap and easy attack to put into effect. A common approach is to use a phishing email containing an infected link. All it needs is one person to make the mistake of clicking on it and an entire network can be compromised creating havoc. Attacks come from many different areas from criminals trying to extort money to activists and terrorists aiming to either compromise the system or endanger life.
In August, Air Canada reported a mobile app hack that affected 20,000 people.
In September, British Airways also exposed a violation that affected 380,000 passengers, and just a month later, in October, it learned that another 185,000 were affected by a second attack.
Also in October, Cathay Pacific Airways revealed that a hacker gained access to 9.4 million customers’ personal information, the latest airline data breach to date.
Sita’s Air Transport Trends reports says that 11% of organisations say it could take them as long as four months to detect a cyber-attack. By that time the damage will have already been done. Intelligent led detection can ensure a prompt response to issues and create new insights into the origin and nature of attacks.
Defence must also be organisational as well as technical. Even the best defences can be compromised by errors by internal employees. Every time an employee receives a password to internal IT systems, they are effectively receiving keys to part of the kingdom. They have a responsibility to ensure those keys are kept safe, but if anyone in the organisation fails to accept their share ownership of cyber security strategies, they represent a threat. All it takes is for one person to click one link carrying a malicious program and the defences come tumbling down.
Cyber security, therefore, has to take on much more importance within an organisation. It starts at the executive team and moves on down throughout the organisation. Employees will need to be trained in best practice procedures as part of their induction and the strategy will need to be continually monitored and updated as the threat landscape evolves.
This has to be an all-encompassing approach using experts both within and outside of the organisation to identify risks and develop a multi-layered strategy. Munich Airport, for example, has implemented an information security hub which delivers a competency centre in which IT experts within the organisation work with experts from the European aviation industry to develop new approaches to fighting cybercrime.
It is an enormous undertaking and something which can intimidate many organisations, especially if those at the top are uncomfortable dealing with advanced technologies. However, it will be crucial to the future of the aviation sector. All the evidence suggests that cyber criminals have firmly set their eyes on aviators. They seem them as being valuable targets bristling with vulnerabilities and the more important digitisation becomes to the sector, the more vulnerable it will be.
The cyber criminals, then, are hammering at the gates of the aviation industry, but in many cases the fortifications are not quite up to standard. Only now is the sector really beginning to wake up to the threat but already it is playing catch up. Cyber crime is evolving rapidly and has become extremely sophisticated. As soon as one form of attack is countered, they will be looking for another. In the digital world, this will be a war without end. The only solution is for operators to ensure their defences are as strong as possible and that they have good detection and response measures in place for when an attack occurs.
Based on materials from Cybersecurity Insiders and Cyberrisk International
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According to modern requirements, the carrier company may even refuse to provide services for the transportation of valuable goods due to the lack of important certificates and statements. Without some of them, it is impossible to ensure the safety of cargo and guarantee a specific time frame for the performance of the service.
However, the carrier may undertake the preparation of all the necessary documents instead of the client, unless otherwise provided by law, but some originals of documents will still have to be prepared independently.
Let’s look at the general packages of documents that need to be prepared in order to deliver a valuable cargo (the list is not exhaustive, in each case additional documents may be required).
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The initial stages of the COVID-19 outbreak led to the biggest contraction in the commercial aerospace sector’s history. After a near-total shutdown of air travel, most airlines around the world scaled back or cancelled orders. That period was followed by an equally historic rebound in the stocks of major OEMs between March and June 2020.
It’s too early to tell whether the coronavirus pandemic is a meteor-type event that threatens the viability of the commercial aerospace industry or a manageable bump in a decade-long expansion. But it’s already clear that many low-cost airlines, which represented much of the growth in airframe customers over the past decade, are likely to shut down in the coming six to 12 months.
Larger carriers will likely survive with government support — or through another round of bankruptcy restructurings — but even they must grapple with how to help passengers feel safe enough to fly. The International Air Transport Association (IATA) projects that global airline revenue will drop by about half in 2020, to US$419bn, and the overall industry will post losses of more than US$84bn. The IATA has also predicts that domestic revenue passenger kilometres (RPKs) won’t get back to 2019 levels until 2022, and international RPKs until 2024.
Most OEMs and suppliers have already taken immediate steps to deal with the short-term impacts of the coronavirus, primarily by cutting costs and temporarily shutting down manufacturing plants. In 2019, Airbus set a new annual record for the industry, delivering 863 jets; for the first four months of 2020, it delivered just 136, running at about half of the prior year’s pace. For Boeing, the pandemic has compounded the production issues brought on by the grounding of the 737 MAX. Embraer, meanwhile, suspended its financial forecast for the year due to uncertainty about the economic impact of COVID-19.
Yet viewed in the right context, the state of the aerospace industry could represent an opportunity for commercial OEMs and suppliers to make needed changes. The next six to 12 months are a critical period in which to prepare for the recovery. Rather than simply focussing on cuts, we believe that OEMs and large suppliers should also make needed investments in the future, in five key areas:
Overall, commercial aerospace lags some other industries in terms of applying digital to create value. A few applications, such as 3D printing, are in wide use in the industry, but larger-scale digital transformation is relatively rare. Accordingly, OEMs and major suppliers should invest in digital throughout their organisation. The most relevant need is in upgrading how companies design and develop new aircraft. Digital tools such as data analytics and artificial intelligence can dramatically accelerate the development process — making organisations more agile and responsive in dealing with dramatic changes in order volumes.
In addition, digital investments will enable decision makers to capture data and derive insights from it, leading to better decisions. Data applications can improve performance both internally — for example, in areas such as operations, production, assembly, and maintenance, repair and overhaul (MRO) — and in new business models that improve customer performance after airframes have been delivered. The array of applications is wide, and the case for making digital investments is clear.
Tier 1 suppliers such as General Electric, Rolls-Royce, Safran and MTU have reduced capacity by up to 30%, but they all are part of larger, diversified organisations and will likely survive. Below them sit thousands of smaller, aerospace-exclusive suppliers that have, in many cases, rewired their organisations to support a single OEM — or even a single airframe. Without significant support, they are likely to go under and trigger ensuing risks and vulnerabilities up the supply chain. The financial struggles of these smaller suppliers may also force long-anticipated and much-needed consolidation within the lower tier supply base.
For OEMs, the challenge in the short term is to support these suppliers to the extent possible, in part by working with governments and industry associations (such as GIFAS in France and BDLI in Germany). Internally, OEMs and Tier 1 suppliers should conduct a diagnostic of all suppliers for a given airframe or component, and rank them based on their relative risk. Assembling this information in a dashboard can ensure that everyone’s view of the status of suppliers is always current despite changes in the environment.
For at-risk suppliers, companies can step in with mitigation measures such as redesigning operations, offering financial or legal support, or assisting with government stimulus programmes. In the longer term, OEMs and Tier 1 suppliers must build a more resilient supply chain to support production when it ramps up again. The central objective should be to increase transparency, agility and resilience to large external shocks.
The IATA reports an estimated 25m jobs supported by air travel are at risk as a result of the crisis. Many organisations will shrink and become more distributed in the coming year, and leaders should ensure that they are adjusting the size and skills of their workforce accordingly, to become more efficient and better equipped with the digital skills needed to survive in a more challenging and virtual future. Manufacturers are also moving quickly to innovate ways of streamlining the workforce such as changing shifts, stepping up automation initiatives and re-imaging worker movement on the floor to keep employees safe and production going with less.
For core functions, companies will need to launch targeted and intentional upskilling programmes — not as one-time initiatives but as part of a sustained culture change that adopts new ways of learning to keep pace with technological change. Now is also a prime opportunity to improve non-core employees’ digital fitness (for example, upskilling in digital technologies that introduce data modeling, design thinking and automation). This type of digital upskilling adds to an individual employee’s capacity to be agile and remain relevant in these disruptive times. For these non-core areas — including support functions such as legal, finance, HR and even operational support such as engineering oversight — companies should clearly define key capabilities to retain and train, and to strategically outsource to external organisations.
Even before the crisis, there was growing pressure on the aviation industry to become more sustainable, particularly with regard to reducing CO2 emissions. Accordingly, the OEMs and engine manufacturers had already launched programmes to develop lower-consumption aircraft and engines, to experiment with new fuels and to enter into electric flying.
The trend towards increased sustainability will intensify after the crisis. People are already skeptical about flying during the pandemic — which increases their sensitivity to other critical issues affecting the industry, such as sustainability. In addition, government aid programmes often set targets for accelerating CO2 reduction. Airbus, for example, is being encouraged by the German and French governments to release its next-generation single-aisle aircraft several years earlier than planned. Despite government support, the billions of dollars required for these development projects are an additional burden for an industry already in financial distress. Still, the industry can emerge from the crisis stronger and more competitive if it works to push sustainability to the next level now.
Commercial aerospace companies should understand the dynamics of economic stimulus packages, and how they might benefit. Many governments recognise the critical importance of maintaining their manufacturing base despite the economic fallout from the coronavirus pandemic. And many will seek to support large players in the industry. However, aerospace companies are carefully considering how much government aid they need and under what conditions to accept it, as they are skeptical about the increased influence of the state on their business activities. For example, Boeing and Airbus have decided to initially raise liquid on the capital market instead of accepting state aid. But of course, this path is not open to all companies at the moment.
Companies that seek governmental aid must first take the hard but necessary internal steps to reduce costs and improve operational performance. Second, they should develop a detailed, quantifiable case for support in key areas, rather than simply asking for a blank check. Last, they should ensure that they are aligned with national economic and societal objectives. For example, they will make a stronger case for support if they highlight innovative, environmentally sustainable designs, instead of continuing to produce airframes with existing technology.
The coronavirus has had a devastating impact on the commercial aerospace industry, but it can also be a catalyst for needed change. When the recovery finally comes, the winners will be those businesses that capitalised on this window and took the steps necessary to emerge stronger from the crisis.
Source: Glenn Brady, Partner, PwC United States