THE FUTURE OF AIR TRAVEL

TREY ANDREWS, JOHN BILELLO, PATRICK BROWN, MATTHEW DUFFEY, AND NICOLE VELASQUEZ
AIR TRAVEL
POST-
COVID?
 FUTURE OF AIR TRAVEL

What is the future of US-based commercial air

travel as it relates to economic developments,
environmental sustainability, public health
and regulation, and aviation technology?
ROAD MAP

Background and Stakeholders Forces of Change Trend Analysis Baseline Forecast Scenarios Strategic Business
History Implications

Expected Future: The air travel industry will continue to grow as technology
advances to meet the changing needs of consumers and the requirements of
regulatory bodies
TOPIC IN
CONTEXT
 • Boeing 737
• Airline Max Crisis
Deregulation • 9/11
Health and (2019)
• FAA (1958) Act (1978) • TSA
Regulation Deregulation Security Safety? • Greta
• EPA (1970) • Air Traffic • Federal Sustainability? Thunberg
Controllers Bailouts Protests
Strike (1981)
• COVID-19

BACKGROUND AND HISTORY

STAKEHOLDERS
FORCES OF
CHANGE
COVID-19 and the Environmentalism Government
Economy and Climate Change Regulation
•Travel Restrictions •10% global carbon •Bailouts and
•employee furloughs emissions Sustainability
•GDP and Disposable •Climate Protests - •Public Health: passport?
Income Flygskam •National Security
•Government Bailout? Reduced Travel Tightening regulation
Reduced travel Government
Potential Recession Regulation

Public Perceptions
Technology Alternatives to
• R&D Fuel Efficiency Air Travel
and Biofuels • Zoom + VR
• AI, ML, Quantum • Hyperloop
Computing
• Autonomous Electric
→ Autonomous flight? Vehicles
→ Advanced Decrease Demand
maneuvering, higher
efficiency
BASELINE
FORECAST
Central Question:
What is the future of US-based
commercial air travel as it
relates to economic
development, environmental
sustainability, public health and
regulation, and aviation
technology?

Dependent Variable:
Revenue Passenger Miles
(RPM)demand
 ECONOMIC
DEVELOPMENT
INDEPENDENT
VARIABLE: GDP
(LEADING INDICATOR
OF RPM)

The economy is expected to bounce back quickly given

expected government bailouts and a COVID-19 vaccine
in 2021
 CONCERN FOR
SUSTAINABILITY
INDEPENDENT
VARIABLE: JET FUEL
CONSUMPTION

Consumption decreased dramatically due to COVID-19 travel

restrictions but will increase at pre-COVID rates once a
vaccine is widely distributed; however, technology investment is
expected to reduce this growth rate soon after.
 GOVERNMENT
IMPACT
INDEPENDENT
VARIABLE:
EMPLOYEES AT U.S.
PASSENGER AIRLINES

Government aid in the form of bailouts, direct stimulus to

employees, and CDC COVID-19 guidelines will enable
renewed growth; however, increased regulation of health, safety,
and sustainability will lead to slower growth
 AVIATION
TECHNOLOGY
INDEPENDENT
VARIABLE:
BTU/PASSENGER

Fuel efficiency will continue to increase due to

advancements in jet engine technology, alternatives to
fossil fuels, AI/ML optimization, and plane design.
 ALTERNATIVES
TO AIR TRAVEL
INDEPENDENT
VARIABLE: ZOOM
REVENUE

Zoom adoption increased sharply due to COVID-19

and is expected to continue to increase after a vaccine
is distributed, though at a slower rate
SYNTHESIZING A BASELINE FORECAST
Increasing US economic growth
1 Economic following pandemic downtick

Gallons of Jet Fuel Consumed

2 Environmental
Increased Regulation for Public
3 Governmental Health, Bailouts and Aid

Advancements in Aviation
4 Technological Technology

Increased Adoption of Visual

5 Technological Interface Tools
SYNTHESIZING A BASELINE FORECAST

Consistent Economic growth

following FY 2020
Lack of wary consumers
Government support
Minimal structural changes for public
safety concerns.
ALTERNATIVE
FUTURE
SCENARIOS
KEY UNCERTAINTIES
AND DISRUPTIONS
Administration of COVID-19
Vaccine
Rate of Economic Recovery
Importance of Environmental
Sustainability to Consumer
Preferences
Rate of Advancement in Fuel
Efficiency
ALTERNATIVE FUTURES METHOD

GROWTH CONSTRAINT TRANSFORMATION COLLAPSE

“KITTY HAWK” “PARKING LOT” “CONNECTICUT” “MONURIKI ISLAND”
ALTERNATIVE FUTURES METHOD

Constraint “Parking Lot” Transformation “Connecticut” Collapse “Monuriki Island”

• Vaccine Developed • Vaccine Developed ( slow) • Vaccine insufficient

• Government Anguish • Government Support • Government Anguish
• Consciousness • Intense R&D • Consciousness
• Subpar R&D Signposts Signposts
Signposts • Emergence of AI, ML, Automation, • No COVID-19 vaccine
• Inability for GDP to return to QC in aviation technologies administered in 2020s
Pre-Pandemic Levels • Increased fuel efficiency; • GDP stagnation, Economic
• Stagnant Fuel Efficiency; Stagnant Decreased BTU/passenger mile Recession
BTU/Passenger Mile • Increased US unemployment • Stagnant fuel efficiency; stagnant
• Reduced Governmental Support BTU/passenger mile
STRATEGIC
BUSINESS
IMPLICATIONS
KITTY HAWK – GROWTH (EXPECTED)

Opportunities: airlines, aircraft manufacturers,

Demand energy suppliers, travel related businesses à
Innovation

Economic
for Air
Growth increase capacity, boom in demand
Travel
Consumer
Preferences
Threats: failure to evolve with sustainability
can lead to obsolescence; concern for public
health may linger Environmentalism

Airline
Revenue

Strategies
✓ Implement safety protocols to reduce spread of disease
✓ Input suppliers should reallocate R&D towards fuel efficiency
✓ Airline focus on environmental marketing
PARKING LOT – CONSTRAINT

Reduced Opportunities: market as environmentally Cannot

Innovate
Lower Demand friendly to gain advantage over competitors in a
GDP for Air struggling industry
Travel Consumer
Preferences
Threats: obsolescence, lower capacity,
diminished demand, growing environmental
concerns, reduced government aid Environmentalism
Reduced
Airline
Revenue

Strategies
✓ Scale back current operations and invest in the future
✓ Reduce number of flights, increase seat utilization → decrease fuel/labor costs
✓ Sell assets and reallocate funding to fuel efficiency R&D
CONNECTICUT – TRANSFORMATION

Reduced Opportunities: regain customers lost during Massive

Innovation
Lower Demand pandemic, gain customers concerned for
GDP for Air environment
Travel Consumer
Preferences
Threats: public awareness about aviation
carbon emissions, highly competitive, slow Extreme
economy Environmentalism
Reduced
Airline
Revenue

Strategies
✓ Petition for continued government support, focus on meeting global sustainability goals
✓ Emphasize future plans and progress to consumers, shareholders, and government
✓ Reallocate funding into R&D for fuel efficiency
✓ Travel-related businesses should partner with sustainable airlines + scale back their own footprint
MONURIKI ISLAND – COLLAPSE

Low Opportunities: businesses who already No

Innovation
Demand innovated may be in a position to capture
Recession
for Air market share
Travel Consumer
Preferences
Threats: crippled demand, low revenue, lack
the capacity to meet even low demand Extreme
Environmentalism
Airline
Revenue
Plummets

Strategies
✓ Liquidate assets and give capital to debtholders, shareholders, employees
✓ Invest in alternatives to air travel (electronic vehicles, Hyperloop, etc)
✓ Manufacturers and input providers realign businesses to support other modes of transportation (biofuels for
automobiles?)
✓ Travel-related businesses relocate to locations near railways, industrial centers
IT ALL COMES
TOGETHER…
The World is Changing:
COVID-19 | Sustainability |
AI/ML | Millennials vs. Aging
Society | Alternatives to Air
Travel
Much of the future of air travel
will be determined by
economic growth and the
industry’s ability to innovate to
meet the needs of this changing
world