What are the opportunities for the overall aerospace industry to develop in the near future?

The aerospace industry is facing a turning point, and many business opportunities have been bred during the transformation of the entire industry. However, the key driving factors, like many industries, still come from climate change, AI and computer computing capabilities.

Opportunity #1

Fuel saving continues to be a priority for airlines, but moves are becoming more frequent
The general public is aware of the impact of the aerospace industry on the environment. For example, passenger aircraft and cargo aircraft account for about 1.9% of global greenhouse gas emissions, 2.5% of carbon emissions, and 3.5% of equivalent radiation drive. And IATA is gradually proposing increasingly stringent carbon emission targets, and plans to achieve net zero emissions by 2050. Not only is the general trend of net-zero carbon emissions, but the current high energy prices have also greatly increased the attractiveness of fuel-efficient models, especially in North America and Europe.

A notable leader is American Airlines, the first to replace older aircraft with fuel-efficient aircraft to reduce jet fuel use. And American Airlines even said that with the continuous replacement of old models with fuel-efficient models in the past few years, it is already the youngest operating aircraft among large US airlines, with an average age of only 11.3 years, and 55% of its models are not to 10 years old. Likewise, Air India, despite being a relative new player, is investing heavily in fuel-efficient aircraft. Proof of this is that nearly 60% of their fleet consists of new generation fuel-efficient aircraft with Air India leading the way.

Furthermore, sustainable aviation fuel (SAF, Sustainable Aviation Fuel) has also entered the annual report of almost every airline, and in 2023, all aircraft of Emirates will be able to use sustainable aviation fuel. With the continuous progress of R&D and innovation, SAF will also occupy a more dominant position. IATA believes that sustainable aviation fuel will account for about 62% in 2050.

Opportunity #2

Explosive interest in space
The increasing number of objects being propelled into space is both a strategic imperative and a maturing growth opportunity. Satellite launches have surged significantly in recent years as governments and businesses capitalize on the trend of intensified investment, technological breakthroughs, and falling costs related to launch capabilities and satellite manufacturing (especially mass production). This increase in activity has played an important role in providing services and pioneering space exploration. However, as the number of launches continues to increase each year, so does the amount of space debris. The lack of proper management of the many small satellites in low-Earth orbit (LEO) megaconstellations and their launch vehicles has led to a proliferation of space debris that now exceeds the number of active satellites. This increasing debris poses a significant risk to operating satellites and the future of space activities. Prioritizing sustainability is therefore critical to ensuring that spaces remain available for future generations.

Around these challenges lie many business opportunities, and the National Space Agency, Defense Forces, and commercial space industry players will play an important role in developing guidelines and establishing a regulatory framework aimed at improving the sustainability of space. This will involve defining ownership, access and usage rights, which can help minimize potential conflicts. Additionally, the industry will shift its focus to providing situational awareness, debris removal, and in-space services, assembly and manufacturing (ISAM) services—an approach that is not only beneficial, but critical to protecting space. To take full advantage of these opportunities, international cooperation must be strengthened to ensure future access to space for all nations. Additionally, it is critical to consider satellite sustainment needs before giving the green light to any new space program, further emphasizing the need for a forward-looking, sustainable approach to our space program.

Opportunity #3

Development opportunities in space and ICTs
The space industry is currently undergoing a transformation from a hardware-centric to a software-defined model. This shift has significantly increased the industry’s reliance on technologies such as cloud computing, edge computing, big data, and artificial intelligence. Digital applications and information and communication technology (ICT) are becoming critical at every stage of a satellite’s life cycle or space mission. In addition, as satellite services and space-based data become more affordable and accessible, there are numerous use cases emerging in areas such as satellite communications (including telecommunications, broadband and connectivity) and satellite imagery (including Earth observation and geospatial intelligence).

At the same time, the space industry is evolving into a service-based model characterized by the outsourcing of everything from satellite design, manufacture and launch to satellite data processing and delivery. This “space-as-a-service” model is compressing the industrial value chain, but it also brings higher profits. To support this shift, ICT companies should focus on developing specific technologies and intellectual property to grow the aerospace industry, especially in terms of massive computing, data access, storage, analytics, monitoring, and scalability. Companies capable of providing cross-domain solutions, fast delivery, and integration services are witnessing high demand.

The emerging demand in the market is not only newer space technologies, but also modern ground connections. This enhanced connectivity can significantly increase satellite communication throughput and provide necessary redundancy. Therefore, strategic partnerships and vertical integration of ICT market players are crucial for the development of value-added services. Given these developments, the demand for space control systems and integrated production and sustainment services has seen significant growth.

Opportunity #4

Last Mile Delivery by Drones
The global pandemic has prompted a shift to drones and ground-based systems for last-mile delivery of essential supplies and consumer goods. The need to minimize human-to-human contact while maintaining delivery capacity has led many companies to turn to innovative driverless technologies. In response, regulators have temporarily exempted companies that take advantage of these technological advances, which has greatly influenced public perception and fostered greater acceptance of unmanned systems for last-mile delivery. While the global regulatory framework still needs to be fully adjusted to accommodate unmanned solutions, especially aerial platforms, increased public acceptance is expected to influence the establishment of the framework to facilitate wider adoption. In addition to providing a contactless delivery solution, the use of unmanned systems can provide substantial savings by reducing labor costs (typically 40% to 50% of traditional delivery service budgets) and minimizing fuel consumption and other expenses.

With the progress of the industry, various development opportunities have emerged. In order to further enhance the usability of UAV solutions for last-mile delivery, the industry can consider implementing more public tests to strengthen the confidence of potential consumers, and actively cooperate with regulatory agencies to share data and resources and accelerate the development of regulatory frameworks. design. And as the question changes from “is it possible to do it” to “how to do it”, and then to “how to do it well?”, that is, how to shorten the delivery time, reliability and diversity at the level of customer experience will become the development focus.

Opportunity #5

Transformation of Intermodal Systems
The mechanism of interlining was initiated by the International Air Transport Association (IATA) in 1947. However, with the expansion of the aviation industry, the large number of airlines has made traditional interlining frameworks such as the Multilateral Interlining Framework (MITA) less and less efficient. The complexity of these legacy systems, involving multiple full-service airlines, makes it difficult for low-cost carriers (LCCs) to navigate. They also include multiple expensive components such as IATA commissions, e-ticket setup fees for each airline partner, codeshare fees, database fees and interline service fees. Additionally, they lack flexibility, offer airlines limited control over commercial aspects such as currency conversions and exchange rate changes, while also suffering from lengthy processes.

To overcome these challenges, the solution lies in the adoption of hosted virtual intermodal. This modern system leverages AI for itinerary construction and offers instant fare settlement and unlimited ancillary services. Crucially, it enables all types of airlines to form partnerships without negotiating multiple bilateral agreements. This intermodal approach is designed to increase efficiency, providing a leaner and more cost-effective framework.

We see an important opportunity for airlines to accelerate the implementation of hosted virtual interline solutions during this wave of transition. Among them, Linghang’s low-cost airlines mainly expand their business through partnerships. Even if they have existing basic software capabilities, they can also cooperate with companies that specialize in the design of intermodal platforms. One such example is Dohop, known for creating the “Worldwide by easyJet” platform. In addition, for the full-service airline industry, it can also benefit from the integration of hubs such as Air Black Box.

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