Intercontinental and Asian flights
to dominate airline industry by 2050
"I think the airline industry is a unique
phenomenon in the business world.
It's particularly sensitive to a number
of factors," says Kaisa Niiranen.
MSc (Tech) Kaisa Niiranen's Master's thesis is a comprehensive guide to the history, present state and future of air travel.
Kaisa Niiranen has been fascinated with flying ever since she was a young girl. Prompted by her determination to make her childhood dream a reality, she decided to suspend her studies in information technology and knowledge management at TUT and pursue flight attendant training.
After working for Finnair for three summers, Niiranen's enthusiasm for air travel was showing no signs of waning. She wanted to achieve a broader understanding of the operations of the industry and accordingly decided to explore the topic in her Master's thesis. The thesis focuses on European air travel and especially its future prospects all the way to 2050. Niiranen's findings suggest that in 2050 the majority of flights will operate between continents, especially Europe and Asia. Intra-Asian air traffic is set to balloon.
UK professionals share their views
According to the thesis supervisor Professor Jorma Mäntynen, Niiranen's excellently graded thesis is especially noteworthy, because it features interviews with some of the foremost thinkers in the field. Niiranen interviewed a number of UK-based experts, such as Professor Peter S. Morrell, and Dr Keith Mason from Cranfield University, Dr Nigel Dennis from the University of Westminster, and John Strickland, an airline industry consultant.
"They were all confident that the airline industry will thrive in the future but highlighted that the industry is going through a transformation," says Niiranen.
The experts were, however, divided in their opinions. On one hand, others stated that they were not expecting any major changes. The European market will continue to grow at a moderate pace, whereas Asian air travel is heading for rapid growth. On the other hand, some of the world's leading aviation professionals ventured to follow more radical trains of thought, saying that profound changes will sweep the airline industry: the number of low-cost airlines will drop and more and more passengers will opt for railways.
"Flying will nevertheless remain an important part of the European lifestyle," summarizes Niiranen.
Four scenarios for the future of the airline industry
Niiranen describes the future prospects of air travel through four scenarios. They are based on global development trends explored in the thesis, including the demographic developments in Europe and global megatrends, such as urbanization. Rather than creating a clear representation of the future, the scenarios offer new ways of thinking and can help airline industry professionals develop long-term strategies.
"From the numerous possible scenarios out there, I decided to focus on the ones that are the most likely and the most intriguing. I personally think that the ‘Wind Beneath the Wings' scenario is challenging but highly attractive and the one we should pursue."
Niiranen says that ‘Easy Does It' seems the most likely scenario at the moment. Nevertheless, ‘Isolated Europe' appears topical due to the crisis in Ireland.
The effects of energy prices and environmental problems on the airline industry are critical factors in the development of the scenarios. Niiranen says that rising oil prices and the increasing pressure to protect the environment will, among other things, put a strain on low-cost airlines. Public willingness to pay more for green alternatives will also play a significant role. These trends could radically slash the demand for cheap flights.
"Europe still presents a huge untapped potential for low-cost airlines. A surprisingly large percentage of the European population is yet to set foot in an airplane."
Scenarios for the future of Europe
- ‘Air beneath our wings' is an appealing, almost utopian scenario that would benefit all parties. The industry is governed by the principles of sustainable development, but economic growth is also secured. To become a reality, this scenario would require unprecedented collaboration between all industry stakeholders.
- ‘Slow and steady' describes a plausible hypothesis for the future. The industry grows at a steady pace and by respecting environmental regulations. This scenario is based on the present state.
- ‘Isolated Europe' is based on more negative economic prospects and serious energy problems. Europe is becoming increasingly isolated and the amount of air travel drops dramatically. European airlines are struggling.
- ‘Climate change turns into a reality' is a shock scenario, whereby survival and safety are number one priority. Phenomena that are not dependent on airlines are operating in the background. Airline industry continues to have an important supportive role in society.