LSE predicts connected aircraft will transform airline operations

By June 21, 2018 May 21st, 2020 Ancillary revenues, Featured, IFEC

London School of Economics (LSE) is predicting that the move towards connected aircraft will transform airline operations and safety into a strategic asset.

This is the takeaway finding from the second chapter in the Sky High Economics series, a first of its kind research report evaluating the economic value of connected aircraft from now until 2035. The first chapter, on the economic value generated by passenger connectivity, was released in September 2017.

According to the report, produced in association with Inmarsat, the connected aircraft, enabled by satellite communications, has the potential to save airlines US$15 billion annually in operational efficiencies and 21.3 million tonnes of CO2 emissions by 2035.

These efficiencies include fuel savings, a reduction in delays, innovations in maintenance processes, air traffic management enhancements, safety improvements and others. Based on current connected aircraft numbers, the research finds that together these efficiencies can generate up to a 1% reduction in the $764 billion spent by airlines each year in operating costs worldwide. This equates to 20% of the forecast global aviation industry net profit in 2018 ($38.4 billion). As the adoption of connected aircraft is set to rise exponentially, this cost saving is expected to double, saving airlines up to $15 billion globally by 2035.

Dr Alexander Grous, Department of Media and Communications, LSE and author of Sky High Economics said, “The forecast doubling of aircraft in the skies by 2035 will create both challenges and opportunities for the global aviation industry. IP-enabled aircraft are an essential step in facilitating growing demand for air travel, while meeting vital safety requirements. The study’s findings highlight not only the powerful commercial efficiencies for airline operations, but crucially, the resulting advantages for safety and environmental impact.”

Frederik van Essen, senior vice president, Market and Business Development, Inmarsat Aviation, added, “This report demonstrates that the connected aircraft is a shrewd commercial decision; unrivalled access to real-time data is reducing airlines’ bottom-line operating costs while reducing emissions and improving safety. Not only that, enhanced connectivity is becoming an operational necessity as our skies become busier. With finite airspace available to accommodate increasing passenger numbers, airlines need to act now and consider the technology and infrastructure they need to future-proof their operations.”

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