Sustainability is an issue at the forefront of consumer minds. What does that mean for aviation?
It’s probably the biggest, single strategic challenge we face now. The world has become much more aware of the impact on the environment—we all saw the images of kangaroos on the streets of Sydney and satellite photos of China without any pollution. They made a very big impression on people. But it’s also a generational thing, you talk to people born in the millennial age and they are not bothered about a fast car because they are users of services and not owners of infrastructure.
We are seeing decarbonization in personal transport and the huge benefits that it has for all of us. We won’t be building more roads because we will be using the existing network more efficiently, driverless cars, electric vehicles…etc.
The very big difficulty with aviation is that it’s very hard to decarbonize any form of transport where you have to rely on taking your fuel source with you, and hydrocarbons are incredibly energy dense and very efficient.
The interim solution is looking at what form of alternative clean energy we have that we could slot into existing technology. Sustainable aviation fuel is much talked about but there are difficulties. The amount of jet fuel we pump into planes every year is a huge number so what we need to find out is whether there is a way of getting sustainable aviation fuel into the existing supply chain cheaply and efficiently to bring the carbon footprint of aviation down. The concept is that you embed carbon that you take from elsewhere into the fuel then when you burn it you are back to where you were, which is sort of half the problem solved but it would be much better to be a completely clean source of energy. However, hydrogen-powered planes and other alternative forms of sustainable aviation are still a bit of a way off.
Will travel be the same post-pandemic?
The perception is that COVID is receding as a threat so recovery will be pretty quick. However, what’s interesting is the profile of passengers. There’s hardly anyone over 45 traveling at the moment, most travelers are single and predominantly male. I imagine they have been least affected by the pandemic so their travel habits are more resilient. Older travelers tend to be more risk-averse but now I think we will see the recovery in that sector come a back as well and we expect the surge in the recovery of bookings to continue to be very, very dramatic as we get towards the summer.
There are, though, other things that are different pre and post pandemic.
Firstly, you don’t miss anything as much as when you can’t get it so the thirst for travel is probably greater than it has ever been before. When you’ve had half the world’s population on some form of lock down for two years the things that people have missed are those personal connections and the ability to travel. Travel broadens the mind, it creates social connections that we can’t get through video conferencing. In the future, leisure travel will be as much an aspirational commodity as it was before.
I do, though, think the long-term prognosis of first class is not looking good. Those that were on the cusp of using a private jet have done so as, through Covid, it gave them freedom, and once you have freedom you don’t want to give it back. In fact, we’ve seen a 400% increase in the rate of movement in private aviation. Simulators are running 24/7 at the moment to train pilots on private jets. The demand is explosive. Meanwhile, I think others who previously were able to afford first class will look for more cost-effective ways of traveling.
What about video calls, do they spell the end of business travel as we knew it?
The one thing about the application of technology that people always tend to get wrong is the predictions of what it will mean to you and me when the technology is applied. Nuclear power in the 1960s was supposed to mean abundant energy for everyone and the computer and fax machines were going to free us up to spend five days a week on the golf course.
Technology has changed the pace at which we go about our lives and I believe that video conferencing will intensify the pace of business. It will enable us to do more business activity, close more deals and forge more business relationships, so we may travel much less as a proportion of every business deal but there will be more deals, which means we might end up back where we started.
Of course, finance directors across the world will be looking at travel budgets and weighing a return flight to Stockholm, two nights in a hotel plus all the other expenses versus a one-hour Zoom call at the office. So, you are going to have to have a pretty good justification for spending exponentially more money.
Simon Pluckrose is a Partner in Dubai with Brunswick’s Telecoms, Media and Technology practice. He is a former journalist for Daily Mail and General Trust.
Images courtesy of Dubai Airports.