I recently attended the 'Investing in Aviation - Europe' conference organized by Ishka, where investors and airlines met to discuss the challenges of creating a more sustainable future for the aviation industry. The conference provided an engaging opportunity to hear from leading institutional investors and airline executives on their perspectives and strategies.
On the airline side, the current transformational uncertainty presents significant challenges in expanding and restructuring their networks and fleets. The risks associated with letting problems slip and focusing only on lagging financial indicators are higher than ever. The airlines need to adopt a more proactive and integrative approach to strategic decision-making that addresses the root causes of loss-making operational events by combining data and insights to take coherent actions that minimize their negative impact.
On the investors' side, the question remains on how much financial support they are willing to provide to indebted airlines struggling to avoid more debt. Despite good discussions and reasoning at the conference, the answers to questions concerning investors the most, such as strategies to deal with rising operating costs, potential airline restructurings, aircraft repossessions, and additional state support, were not entirely clear. This is mostly because the financial outcome alone doesn’t address the root causes of rise in operating costs, which for such dynamic and complex organisations requires coherent approach to decision making.
Ensuring investments in creating a platform for integrative decision making may prevent future losses for airlines, make overall investments less risky and, more likely, make money in the short and long run.
In conclusion, attending the 'Investing in Aviation - Europe' conference provided valuable insights into the challenges faced by airlines and investors. It is now up to the airlines to adopt the new approach to strategic decision making that addresses the root causes of loss-making disruptions, act to reduce them, and attract more loyal passengers.
