The recovery will be digitized

A milestone $2 billion in 2021 e-commerce sales signals a digital ramp is accelerating recovery

Just over a decade ago, widespread use of digital tools in airline operations took root in navigation and charting. A tablet in the flight deck gave pilots the benefit of a simple, fast, reliable and digital way to negotiate the complexities of flight path restrictions.

Ten years later the entire industry, from flight decks to warehouses, is turning to digital tools to navigate today’s unprecedented turbulence. From simple parts fulfillment to dynamic staffing changes to prognostic maintenance tasks, looking inside our walls at Boeing and across to our customers, we see digital waypoints indicating a route to recovery.

Digital solutions were pursued to lower costs during the early stages of the pandemic as operators sought rapid adaptation to a leaner environment when finances were strained. Additionally, there were the dynamic challenges of a shifting operational environment caused by travel restrictions and public travel hesitancy.

Digital solutions’ operational and financial benefits were quickly realized through the course of the pandemic’s down turn, but today they are poised to accelerate the industry’s recovery. Investments in automation, integration and machine learning capabilities help minimize disruption, improve the passenger experience and will sustain lower operational costs post-pandemic.

The global aviation supply chain is a bellwether for the industry. Through 2020 and 2021, Boeing saw a continued, significant customer shift towards e-commerce parts acquisition. Maintenance organizations, acutely aware of costs associated with excess parts inventory (or worse, shortages), sought fast and simple ways to purchase the parts they need. Boeing’s e-commerce parts site saw a significant increase in visits when compared to 2019, with 5 million visits distributed over 50 countries.

In 2021, Boeing customers purchased 70 thousand parts online, worth over $2 billion. With every upgrade to our e-commerce site, customers continued to choose that path, taking advantage of increased transactional ease. The shift to seamless parts fulfillment is akin to the promise of autonomous cars that simultaneously allow more vehicles on our roads and enable higher speeds – velocity the industry will use to quickly recover.

As parts purchasing gets smarter, knowing which parts are needed, when, is becoming easier. The rapid growth of the connected fleet is enabling the industry to transition from asset-specific analytic solutions to fleet-wide (holistic) cognitive solutions to maximize savings and minimize risk. Next generation artificial intelligence and machine learning (AI/ML) will find predictive patterns across fleets and identify an aircraft’s unplanned maintenance needs weeks in advance.

Operators continue to invest in these tools knowing a wave of planned deferred maintenance is heading towards global MROs. The ability to avoid unscheduled or unnecessary maintenance will yield significant cost avoidance with a near-term capacity constraint. One Boeing customer using Airplane Health Management (AHM) prognostic insights recently shared a 95% success rate with those proactive solutions to maintain components before failure. Other customers have shared that their unscheduled maintenance costs have gone down by as much as 90% for certain components.

Data-driven insights will provide significant benefits for operators in the scheduled maintenance arena as well. For example, Boeing’s Optimized Maintenance Program (OMP) service applies analytics to an airline’s in-service maintenance data, business model, operational capabilities and goals to reveal beneficial changes to material and scheduled maintenance labor costs by over 20%, and associated ground time by 30%. A Next-Generation 737 customer recently shared that their scheduled maintenance labor hours were reduced by 47% using OMP.

Available equipment can’t operate without crew, and scheduling became critical as lockdowns and quarantines stranded both crews and jets. Today, operators are moving from reactive to proactive planning. New routes and operational models will require rethinking how to utilize equipment, active crew and re-instated furloughed talent to quickly meet pent up demand, while still remaining flexible to regional disruptions.

By leveraging analytics-powered tools, Boeing’s crew solutions customers are estimated to gain between 3-15% crew productivity improvement that translates to $1 billion in annual savings across the customer base. Additionally, tail assignment tools can yield a substantial increase in aircraft utilization.

Common across commercial, military, business and general aviation is a need to apply cutting edge technology to train the next generation of crews and maintainers. 85% of respondents to an International Air Transport Association (IATA) survey expect digital solutions like virtual classroom learning to assist in training efforts. Operators and MROs are increasingly embracing Augmented Reality/Virtual Reality (AR/VR) solutions to address training demands to keep up with the market recovery; this technology, when combined with traditional training methods, also increases training efficacy.  The same IATA survey of over 800 responding aviation human resource leaders indicated that right-skilling workers has become a top priority.

From people to parts, the industry turned to digital solutions to keep operations running and minimize the impact of the pandemic’s challenges. Now, operators are poised to use the same tools to seize opportunity as the world re-opens. Indeed, a SITA Airline IT Trends Survey found that 84% of airline CIOs expect their 2022 IT spend to be stable or continue to grow in absolute value.

Over 80% of the pre-pandemic fleet is now active and the commercial air travel recovery is well underway. Notably, Boeing’s 2021 revenue for our digital offerings exceeded pre-pandemic levels. Looking beyond 2022, the industry will recover its growth trendline. Boeing expects the 10-year total market for these digital solutions to be $430 billion with a majority of the demand coming from the commercial, business and general aviation markets.