The three most important trends from a longer-term perspectiveare increased globalisation, continued urbanisation and increasedenvironmental awareness. Because these trends affect how customersand society in general view this industry, they also ultimatelyaffect business conditions for Swedavia and other players.
Increased globalisation – politically, economically, culturally andsocially – means that the world has become smaller, figurativelyspeaking. Organisations as well as individuals are affected byand increasingly dependent on one another. Organisations withoperations and production in a number of countries are expectedto have broad insight and take responsibility for the entire value chain. Freer movement, with people able to travel where they want,when they want, leads to growing demand for air travel. Increased exchanges in terms of trade, tourism and opportunities to work and study abroad also contribute to increased travel.
Surveys indicate that international contacts created through modern communication technology increase curiosity about the world and drive demand for air travel. For airlines in Europe, globalisation will mean increased competition for transit traffic to Asia and for access tonew destinations in the world’s emerging markets.
Globalisation and modern communication technology havehelped the global economic system today to transcend borders.Economic cycles have become ever shorter, and changes inone country or in a single market may quickly have major consequenceselsewhere.
From the perspective of security, increased globalisation canalso be considered a challenge, since there is great political turmoilin some parts of the world. Sudden changes may mean thatairlines quickly redirect their capacity to other destinations. Today,there are not just purely physical threats in the form of terroristthreats, civil unrest and civil war, but also different kinds of “cyberconflicts”, which requires increased preparedness and higherawareness of safety and security among industry players.
Continued urbanis ation
Urbanisation is a global phenomenon. Today half of the world’spopulation lives in cities; in fifteen years, two thirds will live in cities.Ever more densely populated urban areas increase the demandand need for effective logistics solutions for both travel and cargotransport. As a result, there are continuously growing challengesto the capacity of airports in these areas. Sweden today is the EU country with the fastest rate of urbanisation, which is also reflectedin the growth of passenger volume especially at Stockholm Arlanda Airport.
Increased awareness of sustainability issues
The third dominant trend is increased environmental awareness. Climate changes now under way may cause economic, humanand environmental disasters. Demands thus continue to grow formore sustainable social development and a broader understandingof what growth is. This means that not just financial ratios butalso corporate social responsibility and environmental concernare increasingly important.
For the aviation industry, this meansa continued focus on practical steps in the form of environmental measures to reduce emissions of chemicals, carbon dioxide andnoise, both for airlines, which have to invest in new aircraft, and airports, which need to invest in new facilities. This is being done in the wake of increased international harmonisation and increasinglystringent regulations, especially in the environmental field, but alsoon issues concerning anticorruption and labour laws.
At the same time, there has been a dramatic increase in the potential to scrutinise organisations and their operations in onlinecommunities. This places great demands on companies andorganisations in the industry, both in terms of sensitivity to newconsumer demands and transparency in day-to-day operations tomaintain and develop trust in the industry.
Changing consumer behaviour
The behaviour and values of consumers and travellers havechanged over time, which is explained by both demographic andeconomic factors. Increased prosperity in developing countries,an older and healthier population who are seasoned travellers, amore flexible work life and more single-person households increase demand for travel.
There are growing demands for collaboration between different modes of transport, and passengers increasingly want more flexible, individualised and accessible traffic systems.There has also been a shift in values. Travel and experiences have become increasingly important as status markers. Holiday travel and restaurant visits are to an increasing extent replacingpurchases of durable goods such as televisions.
The power ofcustomers is on the rise today since customers are ever moreaware, have greater options and are harder to engage. The situationis critical – purchasing decisions are based on feelings andservice, rather than on the brand. That makes it more difficult andat the same time creates new business opportunities in the form of services.
Like in society in general, e-commerce and bricks-and-mortarretail are merging. This new digital lifestyle means that thephysical space at an airport has to be adapted to the digitalspace, not just in terms of the breadth of brands, but also design.
Access to lounges, “workpods” and “thinkpods” for working and relaxing is increasingly important. For airlines, the greater share of leisure travel means that there are fewer passengers in more expensive ticket classes. To maintain revenue, airlines are investing in additional services and on-board sales. In the same way, airports are adjusting signage, products and services for the increase in international leisure travellers, especially from the emerging economies.
Cost-cutting drive continues
Airlines are seeing profits squeezed and are increasingly short-termand flexible in their operations. They are looking for attractive destinationsthat generate the best return. The consolidation that has takenplace in small steps over the past decade will continue.
The drive by airlines to cut costs is also seen at airports, where low charges even today are a competitive advantage. Major investments are being made in new technology to increase automation and self-service, in part through positioning and push services to better control flows of passengers and cargo. “The Internet of everything”, where both people and machinery are continually connected to high-speed Internet, will be adriver for cost-effective operations and increased customer satisfaction.