Sustainability and a push towards diversity are set to be key issues for the commercial aerospace, once the industry has recovered from the pandemic, according to new research by Accenture
The global consulting firm has just published its commercial aerospace insight report, Prepare for Take Off, which looks into the near- and mid-term future for the industry compiled from data and views from industry executives. FINN caught up with Accenture’s Senior Managing Director, Global Aerospace and Defence John Schmidt and Head of Research Jeff Wheless, to find out more.
Schmidt said Accenture’s latest research had moved on from the “shock and confusion” experienced 12 months ago, towards “optimism around what would be a long haul recovery.” Accenture’s research points towards a further decline in wide body deliveries for 2021 versus 2020. But, at the same time, he said over 80 per cent of industry executives saw deliveries for narrowbodies, in comparison to 2020 would remain the same or better year-on-year. “So there’s some optimism that the recovery is moving, and it’s moving in the right direction,” he added.
Schmidt highlighted the number of orders coming through for new aircraft as well as an increase in the number of aircraft flying from one year ago as further reasons to be cautiously optimistic. “What we’re seeing is the steady increase in air traffic, it’s well below where it was in 2019, pre-Covid. On the other hand, we see that steady increase, and when you look somewhere around 2024, three years or so from now, we will be back to relatively the same level we were to pre-Covid travel levels.”
Sustainability – “the shift is happening”
Schmidt said near-term priorities for the businesses surveyed were firmly focused around financials and customer expectations. But in the mid-term, he said elements for creating truly sustainable businesses would also make it onto the agenda. He explained: “When we asked what’s going to be important in two years, over half of the executives we surveyed included sustainability and inclusion and diversity as two elements on almost equal footing with financial and with customer expectations. Certainly the shift is happening, and we’re seeing it and hearing it in the discussions we have with our clients. We’re seeing and hearing in the results of the survey itself.”
Wheless said the executives surveyed were still concerned about suppliers delivering on time and on quality. Schmidt added that the market would “improve dramatically” as the recovery gained pace. “Some of that is tied to having more confidence in what the rates are, so that the planning can be better all around and all the way down,” he explained. “One other thing we saw is that consolidation is very likely to be happening in the tier two, tier three levels. A lot of those companies are dealing with solvency risks right now.”
Technology will continue as driver for change
Technology would also be a driver for recovery as the pandemic had increased both adoption and the pace of change. Schmidt explained. “The pandemic has acted as a catalyst for companies across the industry, including the defence side of the industry in terms of really accelerating their digital journeys. Every one of the clients that we work with is accelerating how they’re looking at Cloud. For instance, it wasn’t too long ago that it was about a third of the companies were even thinking about Cloud, and when they were thinking about it, it was an IT-centric view. Now we have 98 per cent of executives we surveyed engaged in discussions with their lines of business on how they’re going to leverage Cloud as a foundational technology, which then opens up opportunities to leverage data and AI and automation in new ways. t’s actually been more of a catalyst, if nothing else.”