Over the course of the past six months, a diverse team of EDHEC MSc students joined forces to develop a mid- to long-term outlook on the European air travel industry until 2050. In particular, the research investigated emerging business models and their competitive value and assessed waypoints towards net-zero emissions air travel. To account for the industry’s ambiguous and uncertain outlook after the COVID-19 shock, a scenario-based foresight methodology was applied to identify strategic opportunities in crisis.
After an initial goal scanning and change driver audit of the sector, the course was set to explore a plausible range of future scenarios based upon a pre-determined set of projections. The team was thereby determined to look beyond current expectations and develop plausible pathways to steer air travel towards a more sustainable and resilient future. Now, it’s time to recap.
Whilst the coronavirus continues to ravage the air travel industry, the current leadership challenge for airlines, airports and manufacturers is to select an appropriate business model and execute it despite a still uncertain environment. This becomes particularly evident as traditional assumptions about travel and competitor behaviour no longer apply, and change drivers, such as multimodal transportation, fleet optimisation and green energy sources, become more dominant.
To lay the foundations of an aviation operating model that works effectively in the ongoing health pandemic and its aftermath, this research developed an agile business model development tool, comprising the following stakeholder-specific strategic action fields:
Based upon an efficacy-robustness analysis of airline business models, the findings reveal that innovative and disruptive white label and platform-based airline business models can compete against rather traditional FSC, LCC and hybrid business models. Their strength is further amplified when combining them with a platform-based airport business model and a big OEM or engine manufacturer business model. This combination can, thus, be considered as a future-fit aviation operating model.
Whilst organisations are strategically recalibrating their operating model in alignment with the new realities of civil aviation, the industry is fighting yet another battle – that is, climate change. Pressure to fly climate neutral is mounting from regulators, consumers, competitors, society and other emission-heavy sectors that have made significant progress to decarbonise. Promoting carbon-neutral growth and reducing aviation CO₂ emissions to half by 2050 (relative to 2005 levels) have been established as an industry-wide commitment. Yet there is no silver-bullet solution to reduce aviation emissions.
To navigate air travel towards a more sustainable flightpath, it is of utmost importance to overcome the “burn now, pay later” attitude that has led to little progress to curb CO₂ emissions in recent years (see Dyke, Watson & Knorr, 2021). Within this context, it is important to note that the industry is currently only addressing one part of its emissions – namely, CO₂ emissions. Advancements in the scientific understanding of the sector’s non-CO₂ greenhouse gas emissions will thereby further add to the urgency of planetary-scale carbon removal.
From a social perspective on sustainability, the research adds another vital element to air travel’s long-term viability: the socio-cultural context. With social phenomena, such as the Swedish flygskam (i.e., flight shame) having been to the detriment of the sector’s reputation, broader questions about future mobility are expected to affect aviation’s license to operate and grow. Addressing the socio-cultural context may represent the missing link to restore the public’s trust in air travel and for it to remain a viable means of transport.
The last decade brought sustained growth to the air travel industry, but organisations along the aviation value chain must acknowledge that the years, if not decades, ahead will be a balancing act between short-term pressures and long-term transformation. By placing air travel in the broader transportation context, it will therefore be vital to explore how the industry can build upon its pivotal role as ‘glocal’ connector, whilst fostering a deeper relationship with the environment and society at large. As the decades until 2050 are the ultimate window of opportunity to shift the sector’s trajectory towards an economically, environmentally and socially prosperous future, public and private-sector leadership has a pivotal choice: they can continue to support a “business-as-usual” approach, neglecting the significant changes in their operating environment, or they can take proactive action to adapt to and shape the future of the industry.
On behalf of the EDHEC Fit Chair and the project team, we would like to express our gratitude to our corporate partners for co-developing the future with us. The insights they shared and the input they provided, ultimately, yielded the insights available from this research.
A special thanks goes to: