What Aircraft Do We Need?

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I am certainly not a great scientist or a forecasting specialist, but that does not prevent me from asking myself what aircraft we will need over the next two decades. We face two contradictory certainties. On the one hand, passenger numbers will double by 2040, everyone agrees on that. On the other, we will have to achieve carbon neutrality by 2050, as announced in 2012 by Giovanni Bisignani, then CEO of IATA. This goal has never been called into question since, even though it seems impossible to achieve. Meeting this enormous challenge will certainly require new aircraft to be brought to market.

The major manufacturers, Boeing and Airbus, are undoubtedly exploring the issue. Yet we have the impression that they are in no hurry, probably because their current aircraft ranges sell easily and their production processes are well established. In other words, the big two make so much money from existing aircraft that they feel no urgency to develop new models. And yet we will need them.

To carry the approximately 10 billion passengers expected in the next 10 to 15 years, we will first need very large aircraft capable of carrying 1,000 passengers. Merely mentioning this figure is enough to be met, at best, with derision. And yet, what would people have said in 1960 about anyone who envisaged aircraft with more than 300 seats capable of crossing oceans, when the iconic Boeing 707 had only just entered the market, carrying just 110 passengers with a very limited range? We will have to make a comparable leap, moving from aircraft accommodating around 350 passengers, I am thinking of the Airbus A350 or the Boeing 777 in their various versions, to aircraft with 1,000 seats. If we do not, we will have to triple the number of flights, which would be unacceptable to people living near airports. Nor can the number of airports increase indefinitely, unless we build enormous facilities in very sparsely populated areas. These would then have to be connected to major cities through substantial investment in ground transport links.

The environmental challenge adds another layer of complexity to accommodating this growth. One very large aircraft would do the same job as three of today’s large-capacity aircraft. It is also difficult to see how air traffic could be managed if the number of flights tripled. This raises the question of how these new aircraft will be powered. The answer has yet to be found. Of course, sustainable aviation fuel (SAF) offers part of the solution, but it appears to have its limits. We are still searching for the technological breakthrough that will provide the answer.

We are beginning to see significant progress in electric propulsion. For now, experts describe it as unrealistic because it cannot provide enough power to get aircraft off the ground, even if it can be used once they reach altitude, as Bertrand Piccard demonstrated with Solar Impulse. But until the end of the 19th century, similar doubts surrounded the possibility of heavier-than-air machines flying while carrying passengers. We have to trust researchers. Of course, we are always impatient to see their work bear fruit, and we are reluctant to fund it until we are certain it will succeed. But we must accept that failure is part of the path to success.

Then there is the development of high-speed rail. The TGV, introduced in France in the mid-1970s on the Paris–Lyon route, has since been followed by the widespread expansion of high-speed rail across Europe, where distances lend themselves to its use. Similar developments can be seen in Asia, beginning with Japan and now China, as well as in the Emirates and the United States. In regions such as California and Texas, some major cities are close enough together to justify building and operating fast trains as an alternative to flying. Morocco is acquiring such systems, Russia is doing the same, and Chinese companies are building new railway lines across Asia. This could offer a promising way to accommodate the anticipated growth in travel demand.

The fact remains that research in air transport will have to be funded, and the cost will be borne mainly by consumers, in other words, passengers. We should therefore expect fares to continue rising.

Air Pricing or Organised Confusion

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I have before me a few extracts from Amadeus showing the fare lists of certain carriers. I do not intend to name them here because, in any case, regardless of which companies are examined, they all follow the same practices. I would simply like to demonstrate the absurdity of this way of operating.

On major international routes, such as the northern and southern transatlantic routes, the battle is fierce. Admittedly, in “business” class, fares are closer together because carriers aim to maximise high-contribution revenue. Nevertheless, ten options are displayed, and the difference between the highest and lowest fares is around 30%, which is still reasonable.

On the other hand, when you move down to the lower classes, “premium economy” or “economy”, you cannot help but be surprised by the ingenuity of the “yield managers”. In “premium economy”, there are around twenty one-way fares and slightly fewer round-trip fares, yet the differences between them can still be as much as two to one. Where creativity really comes into its own, however, is in the very ordinary economy class. The route managers have clearly had a field day.

On the North Atlantic route, taking the same flight on the same day, I found 22 one-way fares and no fewer than 109 round-trip fares, ranging from €2,902 to … €200 for a round trip. The differences are somewhat smaller on the South Atlantic route, which merely suggests that there is less competition there. I also note that on the Los Angeles–Honolulu route, no fewer than 200 fares, ranging from one extreme to the other, are displayed by four carriers.

In short, I have been wondering for years how such aberrations can be justified. Why is it useful to have more than 100 different fares for the same flight, in the same class of service, on the same day? More fundamentally, what is the point of displaying so many fares? I am surprised that carriers continue to pay for advertising campaigns promoting prices that clearly do not cover their costs. Below €50 or $50 per hour of flight, making a profit is impossible. In other words, offering round-trip fares of less than €500 on transatlantic routes amounts to selling at a loss and, if I am not mistaken, this practice is prohibited. Yet it continues with remarkable consistency.

The consequences are far from trivial. Displaying, and even promoting, extremely low fares devalues the noble and complex activity that is air transport. It creates the impression in the public’s mind that flying an aircraft across the oceans for more than ten hours, in acceptable conditions of comfort and complete safety, at a speed of 900 km/h, is worth virtually nothing. I find that sad. And when customers come to buy their tickets, they are often surprised to discover that the fare they were promised is nowhere to be found and that the actual price is much higher, reflecting what it costs to provide the service. In other words, airlines pay for advertising campaigns that devalue both their product and themselves.

It is certainly normal for different fare levels to exist depending on when a ticket is purchased. This has always been the case, even when fares were regulated through IATA agreements. But why this avalanche of fares? Why have airfares become so incomprehensible? Can we not return to a little common sense?

As far as I know, other sectors, such as the catering industry, have always maintained a relationship between their prices and the services they provide. Hoteliers are increasingly following the example of air transport, while rail operators are not missing out on the trend either. But can this really be considered progress?

On the other hand, we are witnessing a return to quality of service. This is particularly true of European carriers, which, since the end of the Covid pandemic, have begun to recover the excellence they displayed in the 1970s, before the major decline of the 1990s, when “low-cost” carriers began to make their presence felt in force.

I am also pleased to note that European airlines are beginning to climb back up the Skytrax rankings. Air France has entered the top ten in seventh place, while Lufthansa is in 14th place, Iberia in 16th, and Swiss in 19th. For years, no European airline appeared in the top 20. This is a good sign, a very good one. Air France has even taken first place in the First Class category.

Let us not despair. Perhaps the quality of the product will finally be recognised as the key element in air transport marketing, and carriers will compete on the strength of their service rather than through the advertised reduction of fares, even when those reductions are artificial.

Air Transport Distribution, a System Close to Excellence

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In 2025, according to the latest available global figures, air transport generated a turnover of $1,008 billion, or $2.76 billion per day or $115 million every hour, across some 1,300 scheduled airlines. We will pass the 5 billion passenger mark in 2026. And the system continues to grow by 4% to 5% per year, which means a higher traffic volume of around 250 million passengers from one year to the next. More than 25,000 planes are used to transport all these people.

How did we get to this point?

Air transport has enjoyed such popularity for at least three good reasons, each of which is a determining factor. First of all, there is the desire of the inhabitants of the planet to travel: it is the expression of the freedom to be able to go from one country to another, even if obtaining the necessary visas can limit the possibilities. Secondly, it is the extraordinary technological development that has had the effect of making this type of transport more accessible while ensuring reliability close to perfection. And then there is the highly intelligent organization of the marketing of this activity, thanks to a unique distribution system.

The management of marketing criteria and distribution tools is the work of IATA. This organization (International Air Transport Association) was founded in Havana in April 1945, i.e. before the end of the Second World War. From that moment on, the founders immediately recognized that passengers might need to travel using several carriers during the same trip. This was all the more true since the range of aircraft was infinitely shorter at the time than it is today. It was therefore necessary to find a way to simplify the formalities and avoid having to buy a separate ticket for each carrier used. This is how the concept of “interline” came into being.

On paper, it seems very simple and even obvious. In fact, it consists of the companies agreeing to carry passengers with a ticket issued by another carrier. This is elementary, except that the money that comes in return for the purchase of the ticket is received by the issuing company. It was therefore necessary to ensure the correct transfer of the share due to the companies that transport the customer on a single part of the journey. For this to happen, the companies also had to have a great deal of trust in each other and agree to collaborate, even, and above all, I would say, with their competitors. For example, a passenger could make a round trip between New York and London with an American Airlines ticket, while flying with American Airlines in one direction and BOAC in the other.

This organization has been the basis of the success of air transport. I will pass over the complexity of the administrative process, which must both respect the decisions of each carrier and ensure the reliability of the flow of funds while guaranteeing passengers a smooth journey. This system has survived 80 years of history and the dazzling development of this activity. It has been adopted by almost all carriers, and even the “low-cost” carriers are beginning to adopt it. To my knowledge, there is no equivalent in other sectors of activity, except perhaps in telecommunications.

It remained to improve the lives of distributors—travel agents—who had long been very dominant in the distribution of air transport before the arrival of the Internet and the possibility for customers to buy their tickets directly from their carrier. This is why IATA created what is known as the BSP (Billing and Settlement Plan). Before the BSP, each airline had to deposit a stock of tickets in each travel agency it wanted to accredit. This required the latter to keep a rigorous inventory of these stocks, of which it could hold as many as there were carriers. The concept of the BSP consists of holding only one stock of tickets managed by IATA and assigning each ticket issued to the carrier chosen by the travel agent.

At the end of the agreed period, IATA deducts the amount of the tickets issued minus the distributor’s commissions and distributes the total among the carriers designated by the travel agents. This has not only simplified the management of both distributors and carriers, but it has also made financial payments more reliable. Its widespread adoption has not been easy; it has taken half a century from the first BSP introduced in Japan in 1971 to its adoption in nearly 150 countries.

Of course, everything that was manual has been computerized and digitized, but the concepts remain as defined when they were created.

To give an idea of the scale, the total amount of payments that passed through IATA was $492.4 billion in 2025, with an unpaid-bill rate of less than 0.05%. Hats off to those behind it!

Towards a Revival of IATA?

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There was some very important news following the last IATA General Assembly in Rio last June: the appointment of Mrs. Saadia Zahidi to the coveted position of Director General from 1 November 2026, replacing Willie Walsh, who left his position on July 31 to take over as CEO of IndiGo, where he replaces Pieter Elbers, himself a former CEO of KLM. In short, this is an interesting game of musical chairs to examine.

IATA is no small organization! Founded in Havana in 1945, IATA is the trade association for the world’s airlines. In fact, out of the 1,200 or so air carriers, only around 370 are members, but they represent 85% of the world’s air transport. And the figures are impressive: global airline industry revenues are set to exceed $1 trillion this year.

To make this whole thing work and, above all, to ensure that operators cooperate with each other while they are intended to be competitors, we need global tools that are efficient and accepted by all. It is not the least merit of IATA to have created them and to ensure their management.

Among the essential services for air transport, I would mention the BSP (Billing & Settlement Plan), which was introduced in the early 1970s and has become the standard system for issuing tickets and settling the sums collected by travel agencies on behalf of carriers. Currently, the BSP is used by more than 400 companies and 59,000 travel agents, with a sales volume of $242 billion and an on-time settlement rate of 99.99%. The equivalent of the BSP for cargo, called CASS (Cargo Accounts Settlement Systems), processed $47.5 billion.

Other financial services have proven their effectiveness: the ICCS (IATA Currency Clearance Service), which allows the repatriation and conversion of the different currencies in which tickets are purchased at the best exchange rates. It processed $43 billion in the last financial year. The Interline Clearing House (ICH) processed $66 billion in transactions between airlines. In addition to the financial services that are essential for the smooth movement of passengers and goods, IATA also plays an important role in aviation safety through the IOSA (IATA Operational Safety Audit) program. IOSA registration is a condition of IATA membership, and members must remain registered to retain their membership.

All these figures show how important IATA is and remains to one of the world’s most prosperous industries and to the exchange between peoples. However, since its inception, this association of airlines, governed by a board of 32 members, was almost exclusively led by men. Her appointment is nevertheless symbolically significant: she will be the first woman to lead IATA.

It must be said that Saadia Zahidi has, at least on paper, all the qualities to lead this organization, even though she has not worked in the aviation sector. Her international career at the World Economic Forum, combined with degrees from Smith College, the Graduate Institute in Geneva and Harvard University, gives her substantial experience in international economic and policy issues.

We expect a lot from her arrival and hope that she will shake up this venerable institution, which sometimes appears to be resting a little too comfortably on its dominant position. The NDC (New Distribution Capability) program still faces challenges in achieving broad adoption. Artificial Intelligence may also compete with traditional training activities, which must represent a significant part of IATA’s financial results, although these results are, incidentally, very difficult to assess. Above all, IATA will need to establish more constructive and friendly relations with the network of travel agencies. It is not normal for such a sector of activity to have conflictual relations with its distributors, to the point that traditional airline commissions to travel agents have been reduced or eliminated in many markets, even though the distribution of airline tickets directly concerns them.

Saadia Zahidi is a bearer of great hopes. Let’s wish her good luck and success in her new position.

The Future Air Majors

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For a long time, American companies drove air transport. Then came Europe, which was subsequently supplanted by the newcomers from the Gulf, who created a new standard of comfort. It seems that all these carriers have reached a peak in terms of their growth and now have to make do with slower development for several reasons, including the brakes put on the industry by environmental groups, which have targeted aviation because of its effectiveness in the media.

And yet, whether we like it or not, air transport continues to grow. We only have to think of the 20,000 or so aircraft currently on order, bearing in mind that the average value of a modern aircraft is $100 million. The figures are dizzying, and it is difficult to see how such growth could be sustained solely by the countries that have made this sector prosperous so far.

So, of course, there is Asia.

Two countries are now driving air transport on this huge continent: China and India. Chinese airlines currently operate 4,476 aircraft and have an estimated need for 6,810 new aircraft by 2035, while India, which currently operates only 860 aircraft, has ordered 2,250 new aircraft for the same period. This gives us some idea of what lies ahead.

By comparison, all European airlines currently operate around 6,500 aircraft, with orders estimated at 3,500 by 2035, while the figures for the United States are of a similar order. This clearly shows that, in less than 10 years, the leaders in air transport will be Asian.

But apart from these two giants, the other countries of Southeast Asia are beginning to make their presence felt very seriously. If we define Southeast Asia broadly as a region stretching from the Philippines to Bangladesh, there are no fewer than 60 significant scheduled airlines. In Vietnam alone, nine carriers share a market that is expanding rapidly.

New operators are springing up like mushrooms. One of the latest arrivals, Viet Travel Airlines, operates only five aircraft but has just ordered 50 from Airbus during the most recent visit of the President of the French Republic, Emmanuel Macron.

VietJet, created in 2009, has 97 aircraft in its fleet and has 76 on order, more than a third of which are long-haul aircraft. The latest Vietnamese operator, Sun Phu Quoc, created in 2025, operates 18 aircraft and has ordered 49, a high proportion of which are long-haul aircraft.

Little-known airlines outside Asia, such as Cebu Pacific in the Philippines, Lion Air in Indonesia, and AirAsia, are now largely comparable in size to many European airlines. The AirAsia group alone has placed orders for 500 long- and short-haul aircraft.

For a long time, only a few established operators were identified as major airlines worldwide: Singapore Airlines, Air India, and Air China, for example. But the newcomers are much more dynamic.

IndiGo is on its way to becoming India’s leading airline, and it has even had the distinction of attracting former IATA Director General Willie Walsh to its leadership team. I also note that Air India has appointed Tewolde Gebremariam, the emblematic former head of Ethiopian Airlines, as its new CEO.

We are not at the end of the surprises coming from this continent. How long will it take for Chinese manufacturers to become serious competitors to Airbus and Boeing? How long will it take for newcomers from this continent to make a significant push into Western countries? After all, they will have to find destinations on which to deploy the fleets they have on order.

I would add that Western carriers would be well advised to bring their service standards up to a level comparable to those of their counterparts in this region.

These countries have understood that air transport is a key factor in economic development, which they very much need in order to meet the needs of their young populations. These populations are increasingly well educated and connected to the world, and they have a strong appetite for new technologies.

They will not be held back by environmental opposition to air transport.

Air transport is once again proving its usefulness for the good of the planet.

Where Is the Low-Cost Concept Going?

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The “low cost” concept is not new. It dates from 1971, the year Herb D. Kelleher created Southwest Airlines, then confined to the state of Texas, to 1978, the year President Carter introduced Open Skies in the United States. This decision freed up energies and allowed any airline to serve any route by putting on the market the fares it wanted. We are now used to fare freedom, but it only dates from that year and the adoption of freedom to operate really opened up air travel to new layers of customers when it was then reserved for the “rich”.

The arrival of “low-cost” carriers was a real shock for the incumbent operators, who were used to practices that allowed them not to be too careful about their costs. They quickly saw the danger without really wanting to admit the new reality: new players could make money by selling services on the basis of one-way trips and not round trips, and by putting on the market rates that were often 50% lower than the usual prices. This was incompatible with the habits of traditional airlines which, in order to become competitive, had to review both their operations and the management of their staff while maintaining a higher quality of product than that of the new entrants. In short, sacrifices had to be made that the traditional operators did not want to admit.

However, traditional customers began to prefer a lower service against very competitive fares, especially for short flights. This is how Europe became a real opportunity for newcomers. EasyJet demonstrated the validity of the concept in 1995 and around the same time, Michael O’Leary took over Ryanair with the success we know. And little by little, new “low cost” carriers have spread to all continents. To date, 183 airlines operate on this model: 14 in Africa, 41 in America, 71 in Asia, 47 in Europe and 10 in the Middle East. They have become essential and use a considerable number of aircraft, for example, 809 for Southwest, 651 for Ryanair or 356 for EasyJet. And Airbus’ largest order was placed by the Indian low-cost IndiGo with 500 aircraft.

It would seem at first glance that this model will dominate future air transport. Nothing is less certain. First of all, Covid has passed through and the frustration of passengers deprived of their trips has been such that they have accepted considerable fare increases to have the right to travel by plane. And then traditional airlines have gradually put on the market fares that are competitive with those of “low cost” even if this was more cosmetic than real. Finally, “low cost” airlines have also aged and, like their traditional counterparts, have increased their charges under pressure from unions largely supported by the administrative authorities. This is how we have seen social conflicts set in because employees are demanding to be treated like their colleagues in traditional airlines.

Faced with this phenomenon, the “low costs” are themselves having to adapt their concept. Instead of fighting over prices, they are now deciding to do so on the quality of their product. Southwest, for example, has just announced the opening of about forty lounges in airports. While one of the bases of “low costs” was to do without the distribution channel and not to issue tickets, we see these operators entering into “interline” agreements with traditional carriers, which means the obligation to issue tickets and to use GDS to give access to their inventory to travel agents. Add to this the announcement of price increases, which is very new even if the pretext is the Gulf War.

For their part, traditional operators are rethinking their product and modernizing it in a sense of greater comfort. American Airlines has just announced the transformation of its “business class” which will look very similar to what was the first class before. The European incumbent operators are reintroducing their first class into service, all with more modern and incomparably more comfortable aircraft than those of previous generations.

The interface between the terminals and the planes still needs to be rethought. The boarding procedures, which consist of cramming passengers for very long minutes into the gangways, are questionable, to say the least.

The customer is winning the game and he is becoming the real challenge for operators, whether they are “low cost” or traditional. And that’s good.

Can Air Transport Do Without Travel Agents?

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In the face of the rapid evolution of technologies, the question can be asked. Indeed, the arrival of the facilities offered by Artificial Intelligence represents a real evolution in the world of air distribution. The last real innovation before AI dates back to the arrival of the Internet and before that of GDS. This takes us back in time almost 50 years.

For a very long time, the position of travel agencies remained very strong. This distribution channel accounted for 70% of ticket issuance until the early 2000s. It is still very significant, although it has evolved considerably and the marketing methods between OTAs (Online Travel Agents) and traditional distributors have little to do with each other. Nevertheless, they are both recognized intermediaries because they have an operating license and access to airline inventories. In the absence of documented global figures, distributors probably still account for more than 50% of the airline sector’s turnover.

However, relations between operators and distributors have never been simple, and they have sometimes been very conflictual, to the point that they led to the end of the commissioning of travel agencies by companies at the end of the 1990s. This break occurred when carriers were tired of paying both commissions and royalties to GDSs, which pay a significant portion of them to distributors to encourage them to multiply the transactions that are their source of income.

Curiously, these GDSs created by the large companies have become the essential tool for air transport distributors. Their remuneration mechanism, initiated by the carriers, combined with a growing increase in the demand for transport, has led them to a considerable financial valuation. And the traditional companies that own the GDS, in difficulty with the arrival of “low-cost carriers”, have sold these jewels to investment funds who have been quick to increase the price of their service, which is fully paid for by the carriers. This is what is called shooting yourself in the foot.

It was a first step in the breach between the relationships between distribution players and operators. The second was the massive arrival of the Internet. All airlines then developed their own booking sites for their consumers in the hope of avoiding paying the GDS. The latter have reacted by offering distributors ever more efficient tools without being able to curb the proportion of tickets issued by the agencies. The presence of “low-cost carriers”, fiercely hostile to the use of GDS and even ticketing, has accustomed consumers to making their own reservations on the websites of new carriers, which has led traditional companies to equip themselves in such a way as to directly attract consumers who are already familiar with making their own reservations, a way of freeing themselves from distributors.

So to go a little further, IATA has initiated a new, more efficient transactional system called NDC (New Distribution Capability) so that all companies can use this new facility, which is incompatible with GDSs that use another transactional language. But the investments to migrate their operations to this new language are very important and even if the major operators have been able to afford it, the vast majority of carriers still remain attached to their old practice. The rise of the NDC language, which makes it possible both to secure access to the inventory of companies and to incorporate reservations on many other services such as hotels, car rentals, museum entrances and so on, is still very slow. Moreover, the GDSs have also embarked on this adventure, if only to keep their relationship with travel agencies.

And what about travel agents? First of all, they are far from remaining inactive. They are grouped together in groups capable of discussing on an equal footing with even the largest carriers, because they provide their customers with a local service, a personality that airlines are unable to provide.

And then they keep all their influence for long-haul destinations on which they have a great ability to direct their customers to this or that carrier. For long journeys and exotic destinations, which make up the bulk of the development of air transport, they are still somewhat essential, if only to ensure that their customers receive a quality of assistance that is particularly popular with consumers.

It remains for the two sectors of air transport marketing to find a balance in their relationship. One will have to ensure the payment of the sums they receive and the other will have to ensure the service, all with a more balanced contractual relationship.

Does Europe Want To Kill It’s Air Transport?

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We may ask ourselves this question given the constraints imposed by the European Union but also directly by European states on their air transport. Long gone are the days when this activity was the pride of the continent. Between the 1960s and 1980s, European companies represented the jewel of the Old Continent, which was in the process of rebuilding itself after having spent centuries in internal struggles that almost destroyed it. It was the time when the national carriers: Air France, Lufthansa, British Airways, Alitalia, SAS, KLM and so on had developed the world’s leading international network, far ahead of even the United States, which was largely concentrated on its domestic space. Times have changed. Traditional operators have not been able to manage the arrival of “low-cost” carriers, which they saw as enemies instead of considering them as fantastic market developers. Let’s face it, airlines were the first to create their own difficulties.

But as they struggled with new low-cost competitors, government authorities, instead of helping them, continued to slow down their expansion. The first difficulty came in the contest of airspace management. The latter is fragmented by its geopolitical geography, each state being the owner of its aeronautical environment. While it has been possible to create a single currency whose benefits cannot be over celebrated, it has been impossible to create and manage a common civil airspace until now. The design of air routes no longer matches aircraft capabilities, and the loss of time is estimated at 8 minutes on average per flight, which is also an aggravating factor for fuel consumption and CO₂ emissions. In addition, the entire European area is penalised every time an air traffic control strike affects any of the states. One may wonder why governments and the European Commission have not managed to address this difficulty, even if it must be admitted that it is not easy.

Ecological pressure has also taken hold of governments, and they, through a curious demagogy, have placed the burden on air transport, which is accused of all evils, even though it is one of the few activities that has become aware of the importance of achieving carbon neutrality. Instead of supporting the necessary transition, the response of the political authorities has been to force operators to reduce their offer, without having consulted consumers for their opinion. This is why some airports such as Amsterdam or London Heathrow, or even Paris Orly and others that I am forgetting, have had to reduce or cap the number of aircraft movements even though their facilities allowed them to be expanded. We have also seen states outright ban air services when rail allows them to be replaced in 2 hours and 30 minutes.

At the same time, new and important traffic rights were allocated to Gulf carriers, such as Qatar Airways. I note that the Gulf Emirates have clearly perceived the political and economic importance of supporting the development of their airlines. We cannot blame them for that, but we would have liked the European authorities to do the same instead of penalising them. I also note that the latest European regulation on air passenger rights will impose new obligations on airlines, if it is adopted by the European Parliament and the Council of the European Union.

It is paradoxical, to say the least, to see that everyone agrees that air transport should achieve carbon neutrality by 2050, which, by the way, is impossible without a technological leap that we do not see taking shape, and at the same time, that we are clipping the wings of this activity. The investments required to decarbonise the air industry are prodigious, probably several trillion dollars, and we will have to find the resources to finance them. Where can this money come from if not from air transport itself—in other words, from passengers who will have to accept serious increases in fares that will produce increased profits for carriers, a large part of which will have to be devoted to research to achieve environmental targets. For this to happen, European air transport will need not only the neutrality of governments but their support, not financial, but administrative.

Without strong cooperation between all the players in the aviation sector and the states that hold the regulations and air traffic control, it will not be possible to make sufficient progress. Everyone must take their responsibilities, first and foremost the European Commission.

Where Will the Diversification of Airport Services Stop?

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There is a great constant in air transport: everyone complains. Manufacturers are unable to deliver their orders due to a lack of manpower, carriers cannot earn enough money, with a few notable exceptions, airports are constrained by their pricing agreements with airlines and customers, and finally passengers themselves are not happy with the services provided by the entire chain of operators in this sector of activity. This does not prevent air transport from continuing to grow steadily since the end of the Second World War, i.e. more than 80 years.

In the middle of this activity are the airports. It is the obligatory and almost monopolistic crossing point if you want to get to a city by plane. Their position is sufficiently protected that they can afford to set their prices without fear of competition. However, the airlines are reluctant to pay the fares requested and have managed to ensure that these fares are governed by agreements between the users, which are the carriers and the owners of the infrastructure, the companies managing the airports. However, this practice puts the latter in a state of fragility. They are obliged to finance the development of their technical and commercial facilities for long periods of time, while operators can at any time change their strategy and, for example, abandon services deemed unprofitable, which takes essential revenue away from airports.

So to overcome the uncertainties and find the resources necessary for their development, management companies have resorted to two strategic developments. Firstly, for the largest ones, to broaden their field of activity by taking control of airport platforms that are sometimes very far from their historical base, and thus create a network capable of balancing revenues in the event of difficulties at one of the airports managed. And then to diversify their service offer within their facilities. Based on the principle that a clientele with high purchasing power was forced to spend long periods of time, sometimes several hours, in their terminals, the major airports have created shopping malls that are sometimes very large and attract major commercial brands and bring in a very significant income, up to half of the revenues of the major “hubs”, while providing a fun occupation for passengers.

Of course, the airlines have complained because they believe that the customers of these new shopping centres belong to them and that they are entitled to claim a share of the profit it brings. Airports, on the other hand, are fiercely opposed to giving up anything, arguing that without this resource they would have to drastically increase their fees, which is unacceptable to the airlines, and the latter claim that they are the only players in the air transport chain to lose money. This balance in the allocation of commercial revenues is unlikely to be upset.

On the other hand, large airports have to face a new risk: the development of surface lanes. The great progress made in rail transport and ecological pressure naturally lead to a reduction in the number of vehicles using airport car parks, which are so profitable, and even to a reduction in the number of passengers, and therefore of aircraft movements for services of less than 3 hours of flight. The safety constraints imposed on air passengers and not on rail transport customers are not for nothing. So imagination starts to run, and airports start thinking about new services.

Always based on the principle that customers spend a lot of time in their facilities, that they have an above-average purchasing power and that they are not afraid to travel, the managers of these large airports are embarking on the activity of travel agencies, as has recently been announced by Aéroports de Paris. This can become dangerous for the profession of tour operators unless this service is provided by an agency that buys a concession in the airport concerned. But it is difficult to see how, given the low margins made by travel agencies and the operational risks of tour operators, it will be possible to levy fees on this activity.

Once this new service is launched, it is difficult to see where it could stop: why not banks or real estate agencies, what do I know? Imagination knows no bounds… except perhaps those of common sense.

The End of the Distinction Between Low-Cost and Legacy Airlines

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This seems to be a fundamental trend. The models that were once so different between traditional carriers and low-cost carriers are increasingly being copied. It took almost 40 years for the two models to gradually come together, and in the future only the distinction between short-haul and long-haul flights will remain. We go back to the origins of air transport.

Long gone are the days when historical companies saw the arrival, with some condescension, not to say disdain, of new entrants who claimed to make a place for themselves in a universe that was, after all, quite closed. To do this, they had the absolute weapon: the ability to put on the market fares so low that they were impossible to achieve by traditional carriers, all with the same aircraft. The difference in product was certainly real; there were, and still are, strong constraints: increased density of cabins, the need to buy tickets well in advance, the obligation to pay, in addition to the transport itself, for almost all the often-essential extras, for example the carriage of luggage or onboard services, even the smallest ones.

The vast majority of the companies already established despised these intruders and predicted an uncertain future for them, to say the least. Except that their analysis was wrong and that, for a flight time of less than 3 hours, customers began to favour price, which was often half that of the traditional carriers. The difference was even greater for business passengers, on whom the companies made their profits. The gradual loss of this prestigious clientele, who refused to pay up to three or four times the price on the same destinations, made even the largest companies think seriously. They gradually adopted the same practices as low-cost airlines, even if these practices did not cover their costs. They then tried to group together in essentially cosmetic alliances, without necessarily having great success.

The losses accumulated in competing with low-cost airlines led many air transport giants to file for bankruptcy. It should be remembered that the three largest American carriers – United Airlines, Delta Air Lines and American Airlines – have all gone through the American-style bankruptcy filing called Chapter 11. To regain decent financial health, the major carriers had to make considerable savings. These were painful, and the staff of these companies paid the price: up to a 30% reduction in workforce across all continents. In fact, the strategy of traditional airlines was to lower their level of service and even their product offering in order to almost entirely copy low-cost airlines, all while displaying fares identical to those of their new competitors.

Only the low-cost airlines themselves had to face the demands of their customers, who began to balk at the sometimes abusive practices of their carriers. They started to invent new services to compete with the incumbent operators. This is how they opened their sales to travel agents, which they had stubbornly refused to do. They then moved into major airports, whereas their strategy had been to serve only secondary airports for reasons of cost and speed of turnaround, allowing them to make an additional rotation per day. Finally, they began to establish interline agreements with the major carriers, despite having previously been their fiercest enemies.

In short, gradually, each taking a step towards the other, the two models have been converging, at least for flights of less than 3 hours. But for long-haul flights, the situation is different. Since the end of the Covid-19 pandemic, airlines have noticed that customers are accepting fares much higher than those they were used to charging, provided they find a product superior to what had become the norm. As a result, airlines embarked on a strategy of improving their services, particularly on long-haul routes, helped by manufacturers who brought to market much more efficient aircraft capable of operating non-stop flights of unprecedented duration. They created an intermediate class, often called Premium Economy, intended to accommodate customers tired of the increasingly basic service in Economy Class.

And whether they like it or not, low-cost carriers wishing to enter the long-haul market will be forced to provide a product that is compatible with their passengers’ expectations.

Thus, we can predict that in the near future, the distinction will no longer be made between low-cost carriers and traditional airlines, but simply between short-haul and long-haul flights, each trying to differentiate itself in order to attract customers.