'The rise in fuel prices will require airlines to readjust to newer costs'

 BusinessToday.in   New Delhi     Last Updated: February 5, 2018  | 19:03 IST
'The rise in fuel prices will require airlines to readjust to newer costs'
Essa Sulaiman Ahmad, VP, Emirates

The last year was bright for global aviation industry with elevated global operations, historically low fuel prices and lower fares, leading to an overall airline profitability and traffic growth. The aviation scenario was also partly supply driven, which is evident from the increased traffic levels. However, the leading reason for last year's growth in the aviation sector was fuel prices.

Lower fuel prices along with a competitive environment have encouraged airlines to stage economical fares, resulting in high passenger growth. Although 2017 was a good year overall, the aviation industry went through some turbulent times -- ranging from bans on electronics to airspace blockade and other disruptions throughout the year.

For 2018, a lot will rely on the fluctuations in the fuel prices. The rise in fuel prices will require airlines to readjust to newer costs and market competition. In terms of innovations and technology upgrades, the airlines have already demonstrated that what can be expected in 2018. We are anticipating the disruptions to put a show.

If you look more widely at the aviation industry, people are now flying more than ever, among different age groups and all with different requirements. This means that innovation and the adoption of new technology will be key to meeting passengers' expectations in the coming years. Competition among airlines is also expected to usher in new and innovative technologies like virtual reality, inflight Wi-Fi, more efficient on-board services and use of advanced technologies at airports. Digital innovation is disrupting markets with unprecedented speed and there is little room for stagnation when it comes to tackling this parameter.

Apart from innovation, using technology to better connect with audience is also something that will evolve and shape the industry. The focus is not only on promoting on-board products but also engaging the audience and using different formats to interact with them more effectively.

Social media platforms such as Instagram and Facebook not only have a vast demographic outreach, but also provide a good platform for airlines to communicate and inform their audience on their offerings in a more interactive manner. Airlines also need to recognise that on social media, customer engagement is a two-way street. This two-way street also needs to be enabled by a well-connected back-end, and translated into an empowered customer-facing front-end.

The India story

The fast-paced growth of Indian aviation has been highly driven by the country's strengthening economy, high passenger demand, technological development, and visa reforms. However, the progress over the next 12 months will be determined by the way in which some of the key issues affecting aviation are addressed along with the challenges the industry will face.

Looking at the current scenario, development of airport infrastructure and fostering a healthy competitive industry landscape are the two areas that present significant opportunity for Indian aviation. The right policy frameworks and stewardship in these two areas will propel aviation as a real force for India's economic growth and development - opening new avenues for tourism, trade and investment, and ultimately benefitting Indian consumers.

We are already seeing movement towards developing airport infrastructure across the nation -- be it the civil stations or cargo operations -- and the reinvigoration of existing secondary airports under the regional connectivity scheme (RCS). In the recent past, we have witnessed opportunities of new flight options by an array of foreign carriers. The market has also benefitted from the network expansion of

Indian carriers which today represent Indian aviation in a much stronger way - adding non-stop flights to global destinations and competing head-on with foreign carriers. This has also resulted in average airfares decreasing and offering passengers with more options than ever.

With this robust competitive dynamic at play, and with demand outstripping supply, the market would benefit from the easing of the bilateral capacity restrictions between India and Dubai. The renewed arrangements would help to bolster the significant bilateral trade relationship between India and Dubai, which now stands at $25.6 billion.

As a long-term strategic partner for India, Emirates is committed to future investment and expansion in the market in support of India's 2020 growth target of 85 million international passengers a year, and to assist India in its goal to be the world's third largest aviation market by 2020. We are confident that with increased capacity and technological developments, Emirates can contribute even more to India in the years to come.

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