The COVID-19 pandemic continues to create unprecedented disruption in the global aviation industry.

With Australia’s international borders closed indefinitely since March 2020, and domestic borders still prone to sudden closure, our industry’s operating environment and path to recovery remain uncertain through the continuing pandemic.

As a result, there is ongoing and significant impact to our own financial performance. Fee-paying customer traffic was 51 per cent lower for the year when compared to FY2019 levels, resulting in revenue 60 per cent lower than pre-pandemic levels. Whilst we have received government assistance to ease funding pressures, their continued support, the delivery of cost savings, and being able to access the debt market will continue to help us manage the impacts of the pandemic.

While the last quarter of FY2021 saw a scalable increase in domestic flights and routes, and a much anticipated travel-bubble with New Zealand come to fruition, Australia’s borders are projected to remain closed into the 2022 calendar year. It is still likely that FY2025 international traffic levels could be 15 to 20 per cent below previous expectations. The speed and breadth of the COVID-19 vaccine rollout and the level of sustained consumer confidence will determine the rate of recovery for the aviation industry, both domestically and internationally.

The pandemic has made everyone more aware of the vital role aviation has to play in supporting our economy and the social fabric of our communities. The commercial airline industry’s return to health is at the top of the national agenda, with the Federal Government making substantial financial commitments in support of the industry, with challenging conditions to continue for the foreseeable future.

Airspace users and aerodromes across Australia are also evolving, with a range of new manned and unmanned aircraft, the planned opening of a new international airport in Western Sydney, and new runways in Melbourne and Perth, alongside Brisbane’s recently commissioned parallel runway.

Meanwhile, we are expecting new customers to emerge as the new aircraft enable them to meet the demand for new services. It is essential that we adapt our service offerings to cater to these new and very different players in the aviation ecosystem in order to keep our skies continually safe for our users.

As the aviation industry works to embrace the ‘new normal’, we are steadfast in our commitment to ensure safety, efficiency and regularity for all those who use our skies in a volatile and uncertain operating environment.

Our purpose –connecting people with their world safely– is more relevant than ever, supporting the 6 key macrotrends affecting the aviation industry that we will navigate over the life of this plan.

Long Term-Trends

Intelligent Systems

Intelligent systems have the potential to increase situational awareness (insights) and use these insights to deliver optimal outcomes for customers. Cloud technologies can be harnessed to bring together inputs from a range of different systems and assets, process large scale data sets and simulate millions of ‘what if’ scenarios. Meanwhile, the impact of digital twins is expanding beyond the optimisation of individual assets and systems to driving improvements at the organisational level. With a focus on how decisions are made, data visualisation is also critical. Organisations will need data – and the business insights it provides – to create hyper-personalised services for customers. Applications must be designed to present the right information, at the right time and to the right people.

Increasing Airspace Complexity

The COVID-19 pandemic is likely to amplify demand for the services that could be provided by autonomous vehicles, including drone deliveries and unmanned aerial taxis, as people adjust to ad hoc stay-at-home and social distancing measures. Meanwhile, while COVID-19 has accelerated the retirement of long-range passenger aircraft such as the Airbus A380, once international demand rises again more fuel-efficient aircraft, like the A350 and Boeing 787, will drive the recovery of ultra-long haul international travel. Over the next 15 to 20 years, traditional and emerging aircraft will operate alongside each other, increasing the congestion and complexity of airspace. Examples of this include the emergence of unmanned aerial vehicles (UAVs) in lower altitude airspace and new users edging into higher altitude airspace. We must work to integrate and facilitate operations in all parts of our airspace to ensure safe and efficient air traffic operations. Government, regulators, air navigation service providers and industry need to collaborate and innovate to support the recovery, maintain safety, and ensure resilience and security.

Long-Term Growth with Short-Term Volatility

While the short-term outlook is negative for commercial aviation, long-term industry growth is still expected. Demand for domestic business travel will remain low for some time, as organisations face economic constraints and more people work from home. Once international borders open, confidence and uptake of a vaccine will be a key factor for driving industry recovery. Australia has been reliant on the use of gateway airports such as Sydney and Melbourne to connect international travellers to the rest of our nation. With more ‘point-to-point’ travel, direct international flights into ‘non-traditional’ Australian gateway cities may emerge as a growth market for our customers, also further driving complexity in our airspace.

Environment and Community

Society’s expectations in relation to environmental protection are evolving, with the impacts of aircraft emissions, aircraft noise and the industry’s reliance on other natural resources, increasingly being called out at a global, national and community level. In response, our industry is seeking to improve its sustainability, whilst also looking to address significant disruption.

More than ever, Airservices will have an important role in minimising the impact of aviation operations on the environment and community and in demonstrating its commitment to the environment via a sustainability plan.

Demand for Personalised Service

In all industries, including aviation, there is a shift away from a one-size-fits-all approach. Every customer has a unique set of needs and objectives, and service providers need to adapt or risk losing relevance. COVID-19 has highlighted the need to be responsive to customer and industry requirements. This will become increasingly important as the industry evolves and new technologies and innovations challenge the status quo, including a completely new set of customers in non-traditional areas.

Evolving Transportation Ecosystem and Value Chain

The current transport value chain has been disrupted by COVID-19. The old ecosystem, based on historically stable demand and supply profiles, no longer exists. Instead, we are grappling with a landscape where localised outbreaks can suddenly and dramatically change the profile of demand for transport services and passengers will need to become used to a fluctuating supply. More than ever, decision-making up and down the value chain will be reliant on real-time data. While incumbents are racing to provide end-to-end customer experiences through vertical integration of travel, new entrants will also face obstacles as disease transmission concerns continue to drive passenger choices.