Act now to secure the future: Part 2

Author: Michael Bryan, Founding Principal & Managing Director, Closed Loop Consulting

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Michael Bryan, Founding Principal & Managing Director, Closed Loop Consulting, with Marcus Carr, Closed Loop’s Director of Projects and Data Science and Martin Mitev, airline Captain and Aviation Futurist, shares some thoughts on planning out of COVID for a more efficient and resilient future.

In part one, we discussed some recent experiences in the airline industry. We speculated about lessons that could be drawn from them and what opportunities might be presented by taking a slightly different perspective. In part two, we’ll cast our gaze outside the cave and forge a new path, looking at some possibilities in attitude and action that will challenge past thinking but that could deliver significant value.

A FUTURE FOCUSED PERSPECTIVE

Instead of looking back to 2019 as the model, we think looking forward and challenging ourselves with a race to 2029 might drive some excellent outcomes and add to the industry’s capability and its fortunes. We’ve got a few ideas about the sort of stuff that we’ll have to get into our operational consciousness to get the industry there. What Martin and Marcus suggested in part one is that the industry needs to break out of the COVID cocoon and look forward—rather than backwards to the status quo. For as long as I can remember, we’ve all been doing the same things in similar ways and thinking that, somehow, we’re different and, even more disturbing, given that we’ve already mentioned Einstein, that, somehow, we’re going to get different outcomes.

Collectively, the industry has dug around the edges with technology, expecting it to provide the answer to everything. But did it really change anything on its own? A fearless assessment would suggest probably not. Sure, we’ve eked out some efficiencies here and there and talked a big game about the low-hanging fruit all being gone, except that it isn’t as we’ve demonstrated in earlier webinars. If all the ‘low-hanging fruit’ of efficiency is already harvested, you’d think the industry would be about as efficient as it could be. Indeed, one of the airline industry’s most revered and venerable denizens thinks we are, except that we’re not. There’s more to be done.

To thrive on the other side of COVID, we’ve got to change our mindset and focus on rebuilding and maintaining a healthy, vibrant, agile and resilient industry. To achieve that, there are some things that we’ll all have to deal with, and we think now is the time to start planning for them. Think about how these things will impact our industry…

• Airline recovery and resumption of pre-COVID growth trends;
• Hydrogen and battery-powered aircraft;
• Integrating with Urban aerial transport systems and operation;
• High altitude balloons and aircraft systems;
• Commercial space;
• Supersonic Transport (SST);
• What else?

One of the critical parts of the journey to 2029 is to think about what will be different as we project forward to a future-focused worldview for the industry. The first step is to break down some of the assumptions we make about it. One facet of that will be to decide what of the information, systems and the way we do things today is really a competitive secret on which our business survival relies. Then there’s the other stuff that we all do routinely, thinking it’s unique to us but that everyone else is doing, getting the same result and thinking they’re also unique (figure 5.1). The duplicated effort and other costs are punishing.

Marcus has significant experience helping other industries out of the disarray caused by individual company efforts to build the same systems and ending up with a tangled mess when attempts were made to bring it all together to benefit particular industries.

What’s been illustrated here is the conventional segregation of information into that which is competitive and that which is non-competitive information more or less specific to one airline and every other airline too. The issue with the non-competitive information is that every airline is essentially developing and producing the same information, documents or systems: a lot of the same information, for example, to match industry standards or regulatory and compliance requirements. All of that information is, essentially, exactly the same. So, as a result, with data that’s been done individually by airlines, the perspective is not nearly as broad as it could be. Some information is almost certainly out of date, and, essentially, those data are disconnected from the rest of the industry, making sharing and exchange difficult at best.

Marcus Carr

Thinking about what it might look like in a more unified industry (figure 5.2), we’ve maintained the illustrative delineation of information that fits in the competitive advantage frame but now broken the non-competitive information into two different types: proprietary and non-proprietary. Proprietary information is that which airlines are going to have to produce for themselves because, although it may be the same type of information that other airlines manufacture, it will be specific to their market or their organization. The non-proprietary and non-competitive information, on the other hand, is that material that every airline is producing or consuming and that is essentially identical between them. We should be looking at mechanisms that will facilitate that sort of information being collaboratively produced and maintained by all airlines. The result of that would be a massive reduction in the duplication of effort. Because there would be many of the industry’s best minds looking at it, it will probably be very high value, very current, and connected to the industry. For instance, there may be safety concerns that one airline sees that others may not have spotted yet. As that body of information grows, airlines need to put in less effort to maintain it.

Because of ICAO’s association with the UN and the WHO, it’s been broadly argued that ICAO should have been more strident in its representation of the industry during COVID. However, its history since 1944 means that it’s perceived as a regulator more than an advocate for airlines. A Centre for Aviation (CAPA) event held last year aired perspectives from some airline CEOs, and their message was clear: the industry’s emergence from COVID remains confused and evolving. While there may be a somewhat more straightforward path becoming evident as this issue goes to press, uncertainty with borders, vaccines and virus variants still drags on the industry.

The solution, we’re told by the experts, depends on collaboration and coordination. We’ve expressed our views about the lack of implementable detail in those maxims in our ‘New Usual’ video series – check them out on our website. Nevertheless, we think the industry needs to re-start and move ahead based on managed design, not by reams of somewhat obvious recommendations for everyone to interpret, too often through different perspectives. We think because of its penultimate position and representative role, IATA should stand up for this gig. Although the people at the top don’t seem to be sure how it will evolve, let’s take a pragmatic look at how collaboration across the industry eco-system could position us for a more sustained recovery and even lay down a path toward the future (figure 6).

Statistics demonstrate that strategy is often confused, miscommunicated and not well executed by the airline industry. While that’s a bold statement, there are plenty of examples if anyone wants to ask. Imagine, though, a future where the industry provides high-level strategic leadership about operational nuance from which airlines can draw; delivering a lot of that non-proprietary, non-competitive stuff that Marcus discussed.

Picture a suite of tools, exchange standards, data sharing and collaborative capability that enables the industry to support operational strategies and outcomes, and reduce the bottlenecks, delays and scarcity issues that we were all grumbling about not so long ago. Imagine the same tools supporting airline operational strategies, improving the integration of departmental processes and data within the airline and, crucially, with new partners in the likely wave of mergers and global alliances that COVID will produce. Picture too, that airlines can draw from a library of industry-based leadership, data, information and knowledge, easing the repetitive, extensive and expensive turnover of knowledge acquisition and capability replicated by every airline in precisely the same way, over and over again. Airlines would return knowledge to the industry in a symbiotic connection that frees it of scarcity driven efficiency drains and delivering more of the low-hanging efficiencies most think are gone… except they’re not.

Remarkably, all this capability exists, and airlines could benefit from it today. What doesn’t exist is the collective will and leadership to bring it together. This could be a profoundly beneficial program that could reset IATA. Hello, Mr Walsh?

ALTERNATIVELY…

The alternative might look something like figure 7.

We all want to get back in the sky as soon as possible. There’s no doubt it is the highest priority for airlines, but we think how that is done will be crucial, lest the industry jumps straight from the colloquial ‘frying pan into the fire’. Remember the other issues constraining industry efficiency from part one?

So far, it seems perception management remains the focus for the road out of COVID, not the critical strategic outcomes required to rebuild the industry into a more robust, agile and resilient version of itself. Figure 7 represents the status quo. In project management, we call this the ‘do nothing option’. While it’s a legitimate and proper project tool, we have to decide as an industry when we contemplate looking back from 2029 whether ‘do nothing’ was in the industry’s best interests.

We do a lot well, but there are some things we don’t. A lot of this discussion is about the strategic maturity of the industry and its airlines. The collective contentment with the status quo comprehensively demonstrates that we’ve got some way to go. In the context of figure 8.1, strategic maturity is where an airline might rate itself on a strategy and system maturity scale, something like figure 8.1…

… weighing key metrics against its operational and business attitudes. At Closed Loop, we use a matrix like this with our clients at the beginning of most projects. Airlines audit almost everything in the operational space. Why not the entire organization’s capability and readiness for change? We’ve included possible headings here, but these are typically client and project-dependent; no doubt, each reader’s will be different. Check the tiles that represent your degree of strategic maturity.

Drilling into a couple (figure 8.2), Closed Loop has written about the industry’s focus on technology and how reliance on technology as the panacea for everything is a handbrake on real efficiency. We know that there will be those who want to debate that point, but we have the models to demonstrate it, and we’ve talked about them since 2009. Our work with airlines to help them invert the technology perspective triangle demonstrates it to customers very quickly. Here’s what a lot of the industry looks like.

Focusing on level one, the technology first, business second and ‘system’ somewhere down the road, if at all, emphasis of projects habitually disregards the business ‘system’ aspects in which the technology must reside. Rather than technology as an enabler of next-level capability; system, processes, or procedures often become constrained by it. It’s not that there’s anything wrong with particular technology; it’s usually the result of incomplete rationale, a lack of attention to the real problem. The lack of integration at this level is pivotal: the industry has a pressing need to deliver collaborative outcomes across the sector and the entire journey supply chain. The future will be data-driven and integrated, yet many of our technologies remain closed. The IATA Webinar, ‘Adapt and Grow’ on May 26, 2020, comprehensively discussed this as a significant industry dilemma. Data integration will be crucial to the solution, but how many are doing it? How many know what it really is? Suppliers are not at fault: we said in a recent blog that, in the absence of a lead from their customer base, Suppliers will develop what they think we need, and they do that really well, so well, in fact, that it’s why the airlines tie their future vision to the next conference.

Conferences, like those organized by Aircraft Commerce, Aircraft-IT and others, provide instant gratification, seeing and touching the latest gadgets. Because it’s new every time, some airlines take years to figure out what they’re actually looking for. We’ve discussed the two-decade machinations some went through in their search for the EFB in previous articles. The struggle had nothing to do with technology; there were many capable EFB systems to choose from. The issue was the business case, and the difficulty with that emanated from a lack of systems thinking and future vision. The big problem with the current manner in which these things are approached is that without a plan, the increasing tempo of technology makes the sweet spot for a gadget ever shorter. So, focusing on technology alone becomes an ever recursive and ever-diminishing cycle. A tool like the maturity matrix illuminates the current state of an organization. It identifies the aspirational pathways needed to develop to the future state and the steps necessary to achieve them; it also helps drag thinking out of technology alone to a more infinite worldview – instead of what we think we need by this coming Friday.

A UNIFIED INDUSTRY

Stepping outside the cave and getting started on strategic objectives and plans for emergence from COVID and beyond isn’t a massive investment in monetary terms but one of will and leadership.

Airlines must look to the future instead of backwards to the past. They must choose now how 2019 and 2020 will be seen from some future vantage point. In 2029, traffic levels will have re-established, at least from COVID-19 and likely resumed the trajectory that created the obstacles in 2019. Depending on what we take from this pandemic, we may be better prepared next time. Will we be leveraging data and collaboration to combat the issues that we face, those issues that put a handbrake on our ability to operate efficiently and deliver other critical aspirations like our environmental stewardship? Or will the industry be a copy of the same, doing the same things we’ve always done but expecting a different outcome? As we plan our path out of COVID, getting planes in the air is but one aspect. It’s time to reimagine how we do many of the things we do and decide how they fit the industry we ‘see’ in 2029.

Leadership needs to come from the front; it needs to be strategic, planned, coordinated and facilitated. It needs to be from an advocate of the industry for the industry: not politicians or regulators. It needs to be ready with strategies and plans to guide airlines in planning and implementing the future. This gig belongs to IATA, and it’s up to airlines to tell them so. Here’s the perfect platform for IATA’s new leadership to reenergize the organization.

For our industry, context is king, so to set some context, here’s a bit about us to close the article.

CLOSED LOOP

As important as what we do is why we do it. At the core of Closed Loop is our belief that a unified industry operating with a unified future-focused worldview about the issues facing it and the capability to consistently deliver change successfully is crucial to its strength, resilience and growth. Our core belief is supporting the industry to achieve a new worldview and helping airlines and the airline industry along that aspirational trajectory. We’re supported by a great team (figure 10); we have the people, experience and specifically developed methodologies that deliver success every time. All this stands behind the services we provide.

In figure 11, we’ve highlighted a few of the projects we’ve helped our customers with over the eleven years we’ve been together. If it’s not there, the chances are that no one’s asked for it yet.

We’ve been involved in quite a bit over our time together, and the experience gives us insight into how the industry has developed and, we think, some freedom to discuss how it might develop into the future. We definitely believe a discussion about the future is about as crucial as it can get. If you’d like have any of the points raised in this article explained in more detail than the space here allows, please feel free to contact us.

Contributor’s Details

Michael Bryan

Michael has enjoyed an Aviation Career spanning over 45 years. Recently retired from an A380 Command with a major carrier, Michael holds a Master of Aviation Management, a business degree in strategic planning and is a certified PRINCE2™ practitioner. Michael has Airline, Corporate and General Aviation operations, airline training, system development, project and management experience. Michael’s management experience has included Strategic Planning and operational system development, and Project Management across all industry segments. He is the founding Principal and Managing Director of Closed Loop Consulting.

Marcus Carr

Knowledge of data systems has been fundamental to Marcus’ success in project management. He has been the long-time editor of a set of standards produced by LIXI and adopted by the whole of the lending industry in Australia. He has also spoken at numerous conferences, mainly dealing with the delivery of critical data sets in time-critical projects. Marcus holds the position of Director of Projects within the Closed Loop Group. He is a PRINCE2® Practitioner and a firm believer that project management is a human task, not a software function.

Martin Mitev

Martin has worked in the aviation industry since 2010. He has held many titles until today, of which “airline pilot” and “aviation futurist” for the longest. Martin has helped develop airline IT systems and advised flight operations management, flying planes and researching predictions all the while. His passion for aviation runs much deeper – since he first touched the controls of an aircraft at age 6. All this motivates his, sometimes contrarian, insights which he freely shares, hopefully for the benefit of all.

Closed Loop

Closed Loop is a global team of aviation professionals supporting industry and airline management and their people to deliver strategically crucial, business-driven, financially sustainable and assured transformation outcomes. The business specializes in assisting airlines and other stakeholders in managing and delivering the coming wave of industry change and integrating that with airline strategic and efficiency program portfolios, providing support, guidance, or direction through all airline levels – from the Board to the tarmac and into the aircraft.