How Can Airlines Make Money in the Future?
A high share of airlines struggles to operate profitably. Innovating airline business models is therefore crucial to tap additional revenue sources and to persist in a competitive market. Future paths for the airline industry, new business models, and niche markets have been discussed within a scenario-based analysis in cooperation between Technical University of Munich, Airbus, Munich Airport, and Bauhaus Luftfahrt.
Multiple factors that have an influence on the future airline sector, such as liberalisation efforts or changing passenger expectations, were combined in a plausible and consistent way to yield three different scenario frameworks. The distinct development within each of these scenarios provided the basis for the evaluation of new airline business opportunities and related revenue sources. It showed that digitalisation is one of the main drivers for changes within this sector. In order to facilitate a seamless journey, providers of services and products along the travel chain see increased need for sharing and accessing relevant data.
Furthermore, airline business models take different shapes, ranging from an integrated service company to a mere provider of the aircraft itself. This approach and the scenario results contribute to a more detailed understanding of future challenges and opportunities for the airline sector. Being innovative and answering to passenger expectations provide the potential for a competitive advantage and resulting ancillary revenues. The discussion of potential new business models broadens the current debate circling around low cost carriers and full service network airlines.
- Airlines providing different segments of the passenger door-to-door journey: Airlines can participate in various ways in the door-to-door travel chain, set up innovative business models and thus tap additional revenue sources.
- Similarities and differences across the three different scenarios: Identifying similarities and differences across the three future development paths enables airlines to derive robust future strategies and shape their business models accordingly.