Air travel is directly linked to economic activity, and it is globally recognized that the industry grows at roughly twice the GDP growth rate. Conversely, the industry shrinks twice as fast too. Across the world, the harsh economic conditions of the last two years have forced the air travel industry to make its organizations leaner and meaner, and find ways to efficiently offer customers significantly better value, along with an improved travel experience. Here are the trends and events that shaped these changes in 2010 and what we can expect in 2011.

Terminal envy

Taking off: Planes at the Bangalore airport. Photo: Devesh Agarwal

Trouble in transit

Integrated terminals need updated government policies and procedures to ensure that they efficiently deliver the benefits of transit hubs. Domestic transfers in North America and Europe reflect the integration of airport security systems across a nation’s airports.

But in India, airline and airport employees can enter the arrivals concourse without being frisked or having their bags X-rayed, which means airport security must no longer treat it as a sterile area. Convenience for employees becomes a nightmare for passengers.

A transit passenger arriving in Delhi has to walk almost a kilometre to the security checkpoint, undergo another check, then walk back to the boarding gate of the connecting flight. And if he is unlucky enough not to have had his boarding pass or baggage tags properly stamped at security check, he’ll have to go all the way back to security. Imagine the impact on flight schedules, let alone the 1.5km walk to and fro.

The concept of the stamp should be done away with altogether. If the departing passenger is properly checked and the system is strong, the concourse will be sterile. If the system isn’t leak-proof, no amount of stamping will ensure security.

Instead of using the Central Industrial Security Force (CISF) as mere guards bunched at the security checkpoint, the Bureau of Civil Aviation Security should drive efficiency through increased use of modern surveillance systems, profiling and roving CISF personnel within the terminal.

Have funds, will fly

Fragmented families living in distant cities, stressed workers taking frequent but shorter breaks and business executives using airline miles and hotel points for family vacations will all spur air travel, coupled with a lack of proportional growth in surface transport capacity. The sky-high air fares seen recently testify to the increasing demand.

Cheap and best

Sasta, sundaraur tikaoo (cheap, beautiful and durable) is the ethos of a value-conscious nation. With different value perceptions and expectations, we won’t see a traditional low-cost carrier in the Ryanair mould soon. Instead, existing value carriers such as JetLite and SpiceJet, along with low-fare services Kingfisher Red and Jet Konnect, will continue to thrive and enter the international segment. These value carriers, which run on the business model of JetBlue or Virgin America, focus on lean value chains and operational efficiencies to deliver a lower fare with some freebies, like a 20kg baggage allowance. However, with the Indian economy resurgent, we’re already seeing a drift back to full service carriers, putting pressure on the value carriers that had gained 55% of the market in 2010. Expect higher fares in 2011 as oil prices and airport charges rise.

Going social

The air travel industry embraced social media to increase passenger engagement and build brand awareness and loyalty. SpiceJet, Kingfisher and Jet Airways are using Facebook, but are yet to catch up on the preferred social network in the air travel world—Twitter. The micro-blogging site is perfectly suited to the “here and now” world of air travel. Airlines, hotels, car agencies and others use the service to announce last-minute deals. The new trend in 2010 was the increasing use of Twitter by service providers not directly connected to the passengers: Airports such as London Heathrow, Dallas Fort Worth and Detroit, and even air traffic control agencies such as Eurocontrol, tweet not only about flight delays because of congestion, weather or a volcano, but also about possible delays on highways or subways to the airport.

The Robin Hood act

More passengers in India travel by rail in a day than by all airlines in a year, which helps maintain the wrong image of air travel as a luxury and air travellers as rich people. The government, government-controlled companies such as oil marketeers, and both private and public sector airports impose punitive taxes and levies in the belief that air travellers will pay whatever they’re charged. During the economic crisis, governments and airports across Asia-Pacific cut fees and taxes to keep air travel stimulated. India was the only country to increase them.

The forecast of the International Air Transport Association (Iata) for 2010 was that five of the world’s top six airlines by market capitalization would be from Singapore, Japan, and China. Indian carriers, though, have losses of $1.75 billion (around Rs 8,000 crore), and are barely able keep their heads above water. To liberate the industry and realize the massive potential of the Indian market, government and airports will have to abandon their myopic policy of fleecing the “rich” to ostensibly subsidize the aam aadmi, money which in reality leaks to other, non-intended beneficiaries.

Fleet refresh

The next few years will see a wave of new aircraft, which will dramatically improve the flight experience. In 2010 Boeing started delivering 737s fitted with new Sky interiors, and finally conducted the first flight of the much delayed 787 Dreamliner. Hopefully the dream will come true in 2011. Airbus announced the A320neo (new engine option) and its gargantuan A380 became mainstream. SpiceJet is expected to introduce Sky-interior fitted 737s in the next three years, and IndiGo is rumoured to be an early customer for the A320neo. Globally, in-flight Internet connectivity has taken off in the US, and internationally, with Emirates and Lufthansa. How long before Indian carriers jump on this money-earning service? Don’t hold your breath.

Strength in unity

Cost pressures created a wave of consolidation. Delta and Northwest merged, as did United and Continental. This year, British Airways will complete its merger with Iberia. Even the conservative Lufthansa acquired Swiss and Austrian airlines.

In India, GVK Power and Infrastructure Ltd acquired Bangalore airport, effectively creating a trio-poly along with GMR Infrastructure Ltd and the Airports Authority of India (AAI). 2010 also saw airlines signing alliance membership deals which should fructify in 2011. Kingfisher is due to join the Oneworld Alliance and hopefully Air India will finally complete its merger with Indian Airlines and join the Star Alliance. Can we look forward to Jet Airways announcing their joining SkyTeam in 2011? I think it’s a perfect fit.

The Maharaja’s demise

Enough has already been said about the decline of Air India, along with reasons and remedies, so I’ll just provide a simple statistic. The accumulated losses of Air India will feed every hungry citizen of India for a year through the Akshaya Patra programme. It’s time to ask whether we need a national carrier on taxpayer life support. Across the world, national carriers that can’t hack it—Alitalia, JAL and others—have faded away. European governments have long exited their national carriers. The US never had one. However, the Indian political, bureaucratic and labour aristocracy sees Air India as a Kamadhenu. But the milk has been exhausted, and they are now sucking its lifeblood.

Devesh Agarwal is a technology innovation award winner, a 4 million miler in the air and has been listed sixth on Mashable.com’s list of aviation analysts and journalists to follow on Twitter. He blogs at BangaloreAviation.com

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