Bain & Company expert expects electronic flight delays

29 December 2017 Consultancy.uk

The aerospace and aviation sectors have seen profits fall amid rising costs, with automation and electrification viewed as key strategies for reversing this. However, while this has seen investment in electric, autonomous and vertical-takeoff-and-landing concepts, the delivery of such projects remains a distant prospect.

A number of established aerospace players are presently making moves to prepare for an electronic revolution in the industry. Firms are aiming to take off in one or all of three emerging technologies, with early investors already pouring tens of millions of dollars into electric, autonomous and vertical-takeoff-and-landing (VTOL) concepts like Zunum Aero, Volocopter and Aurora Flight Sciences.

A failure to keep up with digital disruption in the aviation sector has already proven fatal for long-term market incumbents such as UK airline Monarch. In an attempt to avoid being similarly left behind, Boeing, one of Zunum's main investors, represents one of many legacy aerospace companies aiming to keep up with an industry-wide push to evolve electric technology. Fellow aerospace giant, Airbus, claims its quadrotor flying taxi is on track to make its first flight by the end of 2018, with plans to start flying the craft in cities by 2023 – with professional services firms Rockwell Collins and Honeywell also looking to benefit from advancements in autonomous technology.

Increasing costs have seen commercial aerospace profits fall slightly over the past year, and many industry players view electrification, automation and innovation as methods of cutting costs relating to labour, as well as drawing more business to their respective brands. Italian airways giant Alitalia entered bankruptcy earlier in 2017, following their failure to execute a $2.2 billion saving scheme drawn up by Roland Berger, involving cuts in pay and conditions, along with over 1,700 job-losses.

Bain & Company expert expects electronic flight delays

"Don't get carried away"

However, while an industrial arms-race to leverage new technology in order to drive down operating fees is understandable, an Aerospace and Defense Partner at Bain & Company has that suggested firms would do well to avoid getting carried away on the matter. Recommending the aviation sector does not neglect the provision of its usual services in the meantime, as consumers will likely have to wait longer than some more boastful companies might suggest for electronic flights, Jim Harris said, "2022 feels early to me. We're likely 15 to 20 years out for something like an electric aircraft being used for commercial passenger transportation."

Electrically fueled flights will also necessitate a structural overhaul of the present infrastructure available to airlines, as is the case with other forms of electronic travel. "The level of maintenance required is going to be significantly higher than on automobiles and you'll need the infrastructure to do that," Harris confirmed.

E-vehicles require serious investment to build out the infrastructure to refuel and service. In the UK alone, the Highways Agency has had to commit to a £15 million infrastructure programme designed to ensure that drivers are never more than 20 miles from a charging point on the UK’s A roads. Similarly, measures announced in the 2017 Queen’s Speech will see motorway services compelled to install a number of chargers for electric vehicles to supplement those already in place from Ecotricity with its Electric Highway, and other charging network providers.

New legacies

"The legacy in aerospace is hardware with a little software. Now software is becoming a much bigger part of this," Harris said, before adding legacy aerospace companies will be required to reposition to a model based on software. However, while this is going to necessitate a sustained period of sustained investment, most of which is currently taking place outside of the traditional aerospace areas, spikes in venture capital expenditure and M&A activity in the sector over the coming years are unlikely to see an immediate return on their commitment.

Harris warned that, regardless of the substantial resources involved in supporting projects developing electric, autonomous and vertical-takeoff-and-landing concepts, the first-generation of vehicles produced are unlikely to turn the world of aviation on its head. Instead, Harris anticipated that progress is more likely to come through adapting these technology advances to legacy aircraft, as a steady evolution, rather than revolution, occurs. "That will change how Americans, and people globally, get around," Harris concluded.

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