Research by IATA found that airline net losses for 2022 are expected to hit $6.9bn, but better news is on the horizon. The industry is expected to finally reach a profit in 2023 – the first time since the Covid-19 pandemic – but unpredictable factors such as oil costs and ever-increasingly extreme weather patterns will continue to create more challenges for airlines.
From baggage tracking that comes with flight bookings to a potential aircraft shortage, we hear from aviation experts, learning their predictions for the airlines in 2023.
Sylvía Kristín Ólafsdóttir, chief customer officer, Icelandair
“This year looks brighter and many in the aviation industry expect to see a return to business as usual. This will give airlines the breathing space they need to focus on the future – a future many predict will increasingly focus on sustainability.
“Green air travel is a top priority for many airlines. A rise in consumer awareness, as well as a broader acceptance of the sector’s impact on global carbon emissions, has encouraged those in the industry to rethink their attitudes towards climate change and begin to reduce or offset their carbon emissions in earnest.
“Measures include fleet renewal, more fuel-efficient aircraft, operational improvements, and exploring the possibilities of introducing sustainable aviation fuels. Alongside these steps, I also expect to see the introduction of more carbon capture projects and the development of green certification.”
Zivan Gvozdenovic, SVP of mobility, Endava
“We are in a new era of aviation – one that is about more than selling seats. In 2023, it’s all about finding new paths to becoming profitable and uniting the entire travel experience.
“While ancillary services are nothing new in the industry, much innovation has gone into making the air travel experience more granularly choice-driven. Where passengers may once have had a choice of first, business, or economy class seats, today they are often presented with a wealth of choices around baggage allowance, boarding speed, seat choice, food and drink options and more. This is all part of a booking process that also refers customers to third-party services like car rental, accommodation, and holiday experiences.
“A focus on ancillary services and customer experiences means rethinking what an airline is, what value it offers and how it can drive greater revenue. Once organisations have the capability to integrate data into experiences, they can continually uncover new insights to inform what matters most for each customer and build increasingly compelling interactions. And when commercial teams have actionable real-time insights across touchpoints, data becomes a powerful marketing tool to present different bundled offers according to preferences.
“As we look ahead, the whole process has the potential to become frictionless, where passengers can book their entire journey with a single interface.”
Skyler Logsdon, CEO and co-founder, Boomerang
“2023 is going to be a banner year for airlines to rethink how they can best revamp the customer experience associated with baggage after all of the air travel headaches that transpired post-pandemic.
‘I suspect that innovative airlines will offer electronic tracking to their business class or high-mileage customers and insurance companies will offer lost luggage policies. Luggage tracking and recovery will be considered a core part of the business, with strategic investments made in the areas.
“I predict that all airlines will start charging for carry-on luggage, and airports and airlines will have a dedicated innovation team focused on partnerships to elevate and modernise their businesses.”
Rob Burgess, editor, Head for Points
“Despite a record-breaking 2022, airlines face an uncertain 2023. Whilst last year saw record high pricing across airlines, hotels, and car rental groups as a wall of post-Covid-19 travel hit a lack of capacity, the short term looks uncertain.
“With most Western economies falling into recession, leisure travel is likely to be curtailed and business travel looks set to be permanently derailed. Public transport use in the US is levelling out at 35% below its pre-Covid-19 level due to the popularity of working from home. In 2022, it was possible to fill business class seats with leisure passengers who were trading up, but they may be less willing to pay the premium in a recession.
“The de facto closure of much of Asia in 2022 helped conceal a key problem – a lack of aircraft. Airlines rushed to retire the old (mainly Boeing 747) and inefficient (A380) aircraft during Covid-19 and were able to get away with it with China, Japan, and Hong Kong off limits. With these markets reopening, and long waiting lists for new long haul aircraft, we are going to see more A380 aircraft dusted off and a harsher view taken on route networks.”
Mercedes Zach, travel expert, Asaptickets
“Overall, demand and price fluctuations in 2023 will be shaped by global market development, including changes in oil prices. However, it is unlikely that prices will decrease.
“No cancellations, no super-long queues – sound like a dream? Well, the aviation industry in 2023 should be able to manage to offer smoother operations than we saw last year.
“Each delay and each denied boarding cost a lot for the airline, so it is in the best interest of both the passenger and the airline to avoid it. We can be sure about one thing: airports and airlines have been sitting down and planning how to avoid the queues and irregularities we saw during the summer of 2022.”