Scenarios for the aviation industry: A Del

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expg toithg cbilitsubenti.

enger,industry segments are experiencing strong

term vx andion, inource sbulentf addrsions.examitry wit

While there are numerous studies dealing mainly with quanti-tative scenarios on the development of aviation fuels and emissions,and other individual aviation topics, there have only been a fewscenario studies on the potential development of the aviationindustry as a whole, based on the development of multiple externalfactors, have been identied (Mason, and Alamdari, 2007). Table 1

derivation of future scenarios. This method is suitable for thederivation of probable and surprising wildcard scenarios (Nowacket al., 2011). In this context Delphi delivers valid and reliable dataand the Delphi process itself can be easily integrated into thescenario composition process (Kameokaa et al., 2004). The Delphimethod is a judgmental forecasting procedure in the form of ananonymous, written, multi-stage survey process (Rowe andWright,2001). The Delphi method aims at systematically fostering expertconsensus about future developments, which are formulated as

Contents lists available at

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Journal of Air Transport Management 22 (2012) 28e35E-mail address: marco.linz@ebs.edu.aviationmanagers in developing robust long-range future strategiesand to challenge strategies that are already in place. To considerwhat is the most probable scenario for the future of aviation 40projections are developed portraying potential developments in thesocial, technological, economic and political environment.

2. Prior work

tion, the studies mainly focused on the passenger business. Specialdevelopments in the air cargo and business aviation segments ofthe aviation industry have not been taken into account before.

3. Methodology

Many authors specically recommend the development ofDelphi-based scenarios for the explorative and long-term orienteddevelopments in the aviation indusbut are also confronted with short-a result of an increasingly compleFurther liberalization and deregulatchanging customer demands and resthe factors contributing to a more turaviation. Scenario planning is a way olong-term planning and support deci

Here scenarios are developed to0969-6997/$ e see front matter 2012 Elsevier Ltd.doi:10.1016/j.jairtraman.2012.01.006long-term growth rates,olatility and shocks asdynamic environment.tensifying competition,carcity are just a few ofand uncertain future foressing uncertainty to do

ne potential long-termh a view to supporting

a nding in accordance with Varum and Melo (2009) who revealedthat 70% of all scenario articles were published after year 2000,conrming a substantial increase in academic research in this eldin recent years. The planning horizon of the studies varied from oneyear to 44 years. According to the recommendations and ndings ofNowack et al. (2011), all studies but one used a qualitative explor-ative methodology in view of their long-term planning horizon.None of the studies attempted to identify both a probable aviationfuture scenario and surprising and disruptive wildcard scenarios asrecommended by Cornish (2003) and Grossmann (2007). In addi-The future of the aviation industropportunities and threats. The passnamic and poses manybusiness and air cargo

methodology and content.Most of the studies we found were published after 2000;y is dycontributions are classied by scenario type, focus, planning horizon,Marco LinzAviation Management Institute and Center for Futures Studies and Knowledge Manage

Keywords:Aviation industry scenariosWildcard scenariosDelphiScenario techniquePassageBusiness aviationAir cargo

a b s t r a c t

A Delphi panel of aviationaviation in 2025. Accordinsegments will be faced wprimarily linked to emerginincreasing industry vulneracargo carriers and air cargowildcard scenarios were idproducing fabbing society

1. IntroductionJournal of Air Tran

journal homepage: www.elAll rights reserved.phi-based analysis for 2025

t, EBS Business School, Soehnleinstrasse 8F, 65201 Wiesbaden, Germany

erts is used to anticipate probable and wildcard scenarios on the future ofthe experts estimations, the passenger, business aviation, and air cargo

27 probable high-impact developments. These include long-haul growthountries, a number of substitution threats, liberalization and deregulation,y, niteness of fossil fuels, and emissions trading. The emergence of low-coststitution by sea transportationwere identied as potential surprises. Severaled such as natural catastrophes, era of virtual communication, and home-

2012 Elsevier Ltd. All rights reserved.

provides an overview of these studies. The different research

SciVerse ScienceDirect

port Management

vier .com/locate / ja i r t raman

ingon

Methodology Research details

/2011 Genius judgment Development of three end game scenarios for thetime after the 2008 recession

Scenario matrix Development of four scenarios for theEuropean aviation industry

ort Management 22 (2012) 28e35 29short and concise future projections. The Delphi process employedhere is based on the classical procedure from the RAND Corpora-tion, (Dalkey, 1969) and follows the multi-stage process proposedby Bood and Postma (1997): First, 40d projections were developed;as a next step, aviation experts were identied, evaluated, selected,and recruited for participation in the Delphi survey; third, theprojections were evaluated online by the experts, followed by anautomated interim analysis of the statistical group opinion andaggregated arguments; fth, the experts were asked to revise theirrst round estimations based on the feedback of the interim resultsin real-time. Up to ve Delphi and revision rounds were possible.Research fatigue was kept as low as possible, which, in turn,assured a higher response rate and greater validity of the data(Mitchell, 1991). After the closure of the online Delphi survey,scenarios were developed based on the Delphi data provided, deskresearch and scenario writing. In addition, a discontinuity analysisand an expert check for plausibility and consistency were carriedout. The derivation of scenarios was mainly based on a hierarchicalcluster analysis.

Standardization and pretesting are considered to be the mosteffective means to ensure reliability in Delphi research (Okoli andPawlowski, 2004). Therefore standardization was implemented inall Delphi and scenario processes: The denition of the researchaim and scope; the structuring of the scenario eld; the selectionof experts; the development of projections; and the interimanalysis all followed phase-based standard procedures. In addi-tion, the entire online survey process was standardized since itwas planned and executed in line with the total/tailored designmethod. To assure a high quality of work in terms of creativity,credibility and objectivity several measures were undertaken. The

Table 1Prior analysis.

Author(s) (year) Type ofscenarios

Focus Plannhoriz

Franke and John (2011) Explorative External factors 2010

HHL (2010) explorative external factors 2015

ICE (2010) Explorative External factors 2040

Mason and Alamdari (2007) Explorative External & internalfactors

2015

CONSAVE (2006) Explorative External factors 2050

Advisory Council for AeronauticsResearch in Europe (2004)

Explorative External factors 2020

Jarach (2004) Explorative External Factors 2004

M. Linz / Journal of Air Transpanonymity of the experts was guaranteed in order to eliminatea potential bandwagon effect. Additionally, the experts commentswere communicated to all experts in each Delphi round as rec-ommended by Nowack et al. (2011). Objectivity was assured bycarefully selecting industry experts with an overall averageindustry expertise of 22.7 years and following the neutral STEPframework for the projection development as suggested byNowack et al. (2011). Credibility of the scenario process wasguaranteed in line with Nowack at al. by integrating the Delphiprocess into the scenario process, by incorporating discontinuitiesand surprising wildcard scenarios. A standardized and docu-mented process was applied to assure that the study is replicable.As recommended by van der Heijden (2005), an additional nalexpert check of the probable and wildcard scenarios was con-ducted to ensure plausibility and consistency of the scenarios andcompliance with quality criteria. Additionally, further deskresearch was conducted to support the plausibility and consis-tency of the scenarios.3.1. Development of projections

The Delphi survey consisted of 40 projections on the future of theaviation industry in 2025. These projections were developedaccording to the neutral STEP framework in order to include social,technological, economic and political developments and to avoidbiases in the questionnaire design as suggested by Nowack et al.(2011). The exploitation of several sources for developing futureprojections is recommended in Gausemeier et al. (1996). Theprojections used in this study were therefore based on three sources(Table 2).

First, an internal workshop was organized with two academicsfrom an aviation research center in Germany. The workshop startedwith a brainstorming session which produced 66 future events anddevelopment factors. These were grouped into seven broad topics(Table 3).

Second, three external experts were selected based on theiraviation knowledge, years of industry experience and willingness tocontribute to the development of the future projections. Theseparticipants discussed potential developments in the aviationindustry up to 2025 in brainstorming andmapping sessions. Seventyrelevant projections were identied.

Third, secondary data mainly consisting of industry studies wasreviewed in desk research. This highlighted 80 inuencing factors.Similar to hypothesis development in survey-based research, theformulation of projections directly impacts the quality of the entirestudy (Micic, 2007). In order to ensure their reliability, as well ascontent and face validity, the projections were pretested at twostages in the Delphi process. After their initial formulation, theprojections were assessed by two internal experts who checked for

Scenario matrix Development of four scenarios for theEuropean aviation industry

Delphi Assessment of eight predened passage scenarios

Modeling, simulation Development of four global aviationbackground scenarios

Genius judgment,workshops

Development of three global aviation scenarios

Genius judgment Scenario of the European Airline Industrycompleteness and plausibility of the content as well as methodo-logical soundness. To ensure methodological rigor, the projectionswere checked for ambiguity and precise wording was used toguarantee specicity in formulation without including too manyelements (Salancik et al., 1971). In addition, conditional statementswere avoided by making the primary question dependent on thefulllment of a series of conditions or by urging experts to evaluatethe two parts of the projection in the same manner, even if theyhad a different opinion on each statement. If a projection was

Table 2Sources of potential future projections.

Projection generation phase No. of identied factors

1 Internal expert workshop 662 External expert workshop 703 Desk research of existing industry studies 80

rt MTable 3Projections on the future of aviation 2025.

M. Linz / Journal of Air Transpo30formulated with conditions, it was split into two projections. Afterthe completion of the questionnaire design, another pretest wasconducted by a monitoring team of 17 external industry experts(Turoff, 1975).

consultants (18%) and C-level managers (9%). All geographicalregions dened by the UN were represented so that the study can

No. Future projection

1 Passengers and cargo customers will accept self-service in airtransportation.

2 There will be rising demand for easy air transportation to avoidwasting time.

3 Travel budget cuts will force the increased use of low-cost carriers forbusiness travel.

4 Customers will demand unbundled services.5 Customers will increasingly demand integrated services, door-to-door,

out of one hand (one-stop-shopping).6 The use of business aviation will be accepted by society.7 Business aviation benets will be less valued in short-haul markets

than in long-haul markets.8 Demand for transportation within, from, and to emerging countries will

be the major growth driver in the aviation industry.9 Long-haul national and international transport will grow faster than

short-haul international, national and regional transport.10 The non-aviation business of airports will safeguard further airport

growth.11 Low-cost carriers will grow faster than full-service network carriers and

business aviation providers in short haul markets.12 The leisure travel sector will be the major driver of growth in the aviation

industry.13 Value-added cargo will grow faster than standard cargo.14 Courier, express and parcel (CEP) cargo will grow faster than value-added

and standard cargo.15 The share of build up pallets (BUPs) will increase tremendously.16 The demand for business aviation will exceed the projected annual

growth rate for general air transportation.17 Business aviation will provide access to remote areas like free trade zones

and export processing zones.18 The consolidation trend in the aviation industry will continue.19 Yields will continue to decrease.20 The members of the aviation transport chain (airlines, airports, ATC, etc.)

will collaborate in system partnerships.21 Business and corporate jets will be managed collectively in pools.

Fractional ownership will become common.22 Dedicated business aviation airports will evolve.23 Regional and low-cost carriers will provide feeder services for

international network carriers.24 Dedicated cargo airports will evolve.25 Very light jets (VLJs) and air taxi services will increasingly be used to

accommodate short-haul demand and individual requirements.26 Medical air transportation in chartered business jets will grow rapidly.27 Business jets will be increasingly utilized for emergency freight

transportation.28 In long-haul markets, low-cost carriers will be an established and

successful business model serving the majority of international routes.29 Low-cost cargo carriers will be an established and successful business

model.30 Legally binding emission rights and trading policies will be established

for air transportation.31 Problems related to the scarcity of fossil fuels will not be resolved.32 The vulnerability of the aviation industry will increase due to

unexpected events.33 The growth of the aviation industry will be limited due to capacity

constraints.34 The liberalization and deregulation of aviation markets will be nearly

completed.35 The traditional air cargo transport chain will be intensely challenged by

integrator chains.36 Virtual meetings, telephone conferences, and video conferences will

increase tremendously.37 Air transport will be substituted by land transport in short-haul markets.38 Air transport will be substituted by sea transport in long-haul markets.39 New smaller aircraft and jet types will allow long-haul and transatlantic

point-to-point ights, thereby bypassing hubs.40 International (satellite-based) air trafc control will be available.claim to be global. The majority of the experts originated fromEurope (49%) and North-America (25%), Asia (9%), South-America(7%), Africa (5%), and Oceania (5%).

All experts took part in at least two Delphi rounds, correspondingto a drop-out rate of 0%. On average three Delphi rounds wereconducted. The fact that all of the experts participated in the secondround indicates a high level of satisfaction in terms of survey contentand questionnaire design. It is reasonable to assume that a high levelof satisfaction increases commitment and involvement, whichinevitably results in high survey data quality. In addition, researchhas revealed that the majority opinion changes over rounds and,therefore, the most important contribution occurs after the rstiteration (see Rowe et al., 1991; Woudenberg, 1991).

3.3. Evaluation of projections and interim analysis

In each Delphi round, the experts assessed each projection interms of its estimated probability and impact on the aviationindustry for the year 2025. The estimated probability was measuredas a percentage and the industry impact on a 5-point Likert scale. Inaddition, the experts were asked to provide awritten justication foreach of their estimates.

After each round, an interim consensus analysis was conductedbased on descriptive statistics (mean, standard deviation and inter-quartile range). The interquartile range (IQR) is the measure ofdispersion for the median and consists of the middle 50% of theobservations (Sekaran, 2003). The consensus criterion for the esti-mated probability was an IQR of 30% or less. Since the panelists wereasked to provide arguments for their estimates, a huge amount ofqualitative data was produced. In total, 1364 usable arguments,mostly written inwhole sentences, were collected. These argumentswere aggregated together with a summary analysis of the content.The following Delphi round included the group response andaggregated arguments for each projection. Each expert had thechance to revise answers from previous rounds based on the statedgroup opinion and justications.

In the nal analysis, all questions were answered. Therewere nomissing values demonstrating a high degree of involvement and3.2. Selection of experts

The study aimed at involving 20e30 industry experts, a recom-mended panel size for Delphi surveys including quantitative andqualitative data collection (see e.g. Parent and Anderson-Parent,1987; Skulmoski et al., 2007). The initial pool of potential expertsfor this study comprised 80 airline strategists, C-level managers,aviation researchers and aviation consultants from companies allover the world. For each of the expert candidates, a score wascalculated to reect their individual expertise since the improperselection of experts is considered to be the most severe validitythreat in Delphi research (Creswell, 2003; Hill and Fowles, 1975).The scores were based on a set of criteria including the manage-ment level, job specialization, functions inside and outside of theorganization and industry expertise in years (Lipinski andLoveridge, 1982; Mehr and Neumann, 1970). In total, 57of the 80experts approached agreed to take part in the Delphi survey.

Forty-two percent 42% of the 57 participants had expertise inpassenger aviation, whereas 25% had business aviation background,and 33% air cargo background. All experts had at least 1.5 years ofexperience within the aviation industry. On average the expertshad 22.7 years of industry experience. Most of the experts (47%)were airline strategists, followed by aviation researchers (26%),

anagement 22 (2012) 28e35commitment among the participating experts. Additionally, the fact

ort Mthat many comments were provided at the end of the survey can beseen as an indicator of low fatigue.

3.4. Scenario development

A cluster analysis was conducted in order to identify structuresand similarities in the Delphi data. In order to identify possibleclusters, the data was processed using the furthest neighbor(i.e. complete linkage) method with simple Euclidean dissimilaritymeasure.

The variables considered in the cluster analyses were the meanvalues of expected probability (EP) and impact (I) of each projection.Numerous authors have argued that clustering along these twodimensions is reasonable in order to derive appropriate actions andstrategies (see e.g. Akkermans et al., 2003;Hder, 2002; Ogden et al.,2005; Rikkonen et al., 2006). Furthermore, the values of probabilityof occurrence and impact were transformed by standardizing vari-ables into Z-scores as they were on different scales. The descriptionof the most probable scenario is based on the experts qualitativearguments in support of their estimations during the Delphi rounds.

Many scenario studies exclude discontinuities and wildcardscenarios (Grossmann, 2007). Suchwildcard events or developmentshave a low probability of occurrence, but a high impact on theindustry. Their inclusion helps to increase the ability to adapt tosurprises and to test the robustness of strategies and decisions (Micic,2007). Based on a coding and further analysis of the expertscomments, nine wildcards were extracted, of which three will bepresented later.

As recommended by van der Heijden (2005), a nal expert checkof the probable and wildcard scenarios was conducted to ensureconsistency and compliance with quality criteria. Additionally,further desk research was conducted to support the plausibility andconsistency of the scenarios.

4. Research results

4.1. Results of Delphi survey

Table 4 summarizes the Delphi statistics with regard to thedevelopment of consensus after the twoDelphi rounds. An analysis ofthe estimated probabilities revealed a decrease in the standarddeviations (SD)ofmostof theprojections after round two. In linewiththe rationale behind the Delphi method, after receiving feedbackfromroundoneon the statistical groupestimation and theargumentsgivenby the experts in support of theirestimation, round two showeda greater convergence among the expert panels opinions and anincreased consensus. The strongest convergence was measured forprojection 5 (integrators). Its standard deviation decreased by 5%.Projection 66 (virtual communication) showed a slight increase instandarddeviation of 0.7%. Consensuswasmeasured after twoDelphirounds for 25 of the 40 projections. Consensus was already achievedin the rst round for 9 of the 18 projections.

4.2. Strategic mapping and the probable future of aviation

The visualization of the clustered Delphi results in the form ofa scatterplot on a strategic future map allows a logical clustering ofthe aviation projections examined. Each number represents thecorresponding projection listed in Tables 3 and 4.

Fig. 1 provides interesting insights. It can be observed that mostof the projections have an average impact of three or gretaer, aswell as an average estimated probability of 50% or more. In general,this demonstrates the relevance of the projections developed in therst phase of the research project. The results indicate that the

M. Linz / Journal of Air Transpa priori formulation and selection of projections was accurate (vonder Gracht and Darkow, 2010). Projections, where consensus wasachieved predominantly, exhibit a probability of 60%. This nding isquite common in Delphi studies (Ogden et al., 2005) becausedissent is more likely to be associated with projections for whichthe future development is difcult to assess.

In addition, the strategic futuremap allows for strategic gradingofprojection clusters, comparable to a portfolio analysis. The strategicclusters conglomerate various projections according to their char-acteristics so that the projectionswithin a cluster are quite similar. Asa consequence, the strategies used to deal with these projectionsshould also be similar. Using the estimated probability andindustry impactdimensions for a hierarchical cluster analysis, threeclusters of particular strategic importance were identied: 1) high-impact expectations forming the probable future scenario; 2) even-tualities; and 3) potential surprises.

High-impact estimations are characterized by high estimatedprobability of occurrence (in this study over 55%) and high industryimpact. They are, therefore, of great strategic relevance and shouldbe considered in long-term strategic planning. However, strategistsshould bear in mind that expectations may turn into potentialsurprises. Thus, their non-occurrence should also be considered indiscontinuity analyses. Here 27 projections fall into this clusterforming the probable future of aviation scenario.

According to the expert panel, the probable future of aviation in2025 will develop as follows: In 2025, passenger aviation and busi-ness aviation customers demand easy air transportation withoutwasting time (projection 2). Self-service (self booking, self check in,self cargo capacity booking, etc.) is widely accepted in passenger andcargo air transportation (projection 1). Passengers increasinglydemand unbundled services whilst business aviation and air cargocustomers increasingly demand integrated services (door-to-door,one-stop-shopping) (projections 4 and 5). The use of virtual meet-ings, telephone conferences, and video conferences has increasedenormously (projection 36).

Transportation to, from, and within emerging countries(especially Latin America, Russia, India, China and the Near East) isstill the major driver of aviation growth (projection 8). In general,long-haul national and international air transportation has grownfaster than short-haul national and regional air transportation(projection 9). The growth of the aviation industry is impeded bycapacity constraints (projection 33) although an international(satellite-based) air trafc control systemwillmost likely be available(projection 40).

As regards aviation business models, low-cost carriers are stillgrowing faster than full-service network carriers and business avia-tion providers in short-haul markets (projection 11). Due to reducedtravel budgets, low-cost carriers are also increasingly used for busi-ness travel, especially for short distances (projection 3). Themembersof the passenger aviation and air cargo chains (airlines, airports, airtrafc control, forwarders, travel agencies, etc.) are expected toincreasingly collaborate in system partnerships (projection 20).

In the air cargo industry, courier, express and parcel (CEP) cargo isgrowing faster than value-added cargo (projection 14). Value-addedcargo is growing faster than standard cargo (projection 13). The useof build up pallets (BUPs) has increased tremendously (projection15).

Liberalization and deregulation of aviation markets has furtherprogressed but is not complete in 2025 (projection 34). In contrastto business aviation yields, passenger and air cargo yields are stilldecreasing in 2025, with some exceptions (projection 19). Asa consequence of both developments, the consolidation in theaviation industry continues (projection 18).

In 2025, legally binding emission rights and trading policies arewell established for air transportation (projection 30). The problems

anagement 22 (2012) 28e35 31related to the scarcity of fossil fuels remain unresolved (projection

Fig. 1. Strategic map on the future of aviation 2025.

Table 4Delphi statistics.

Thesis no. and short title Estimated probability (EP) Impact (I)

Round 1 (n 57) Round 2 (n 57)IQR Mean SD IQR Mean SD Mean change SD change Mean

1 Acceptance of self-servicing 10 81.3 11.7 10 81.7 11.2 0.5 0.5 3.92 Easy air transportation demand 18.8 79.7 8.5 18.8 79.6 8.4 0.1 0.1 3.53 Low-cost business travel 30 63.3 19.1 30 64 18.1 0.7 1 3.74 Demand for unbundled products 30 61.8 19.3 30 61.4 19.4 0.3 0.1 3.35 Demand for integrated products 20 66.8 19.6 20 66.1 19.3 0.8 0.3 3.46 Societal acceptance of business aviation 35 41.1 21.2 35 41.1 21.2 0 0 3.27 Lower value of short-haul business aviation 20 42.1 17.6 20 40.7 16.4 1.4 1.1 3.28 Emerging markets 10 83.3 9.8 10 83.9 8.9 0.6 0.9 49 Long-haul growth> short-haul growth 35 67.9 18.2 25 69.6 16.7 1.6 1.5 3.510 Non-aviation business of airports 10 72.9 10.8 10 76.1 10.8 3.2 0 3.211 LCC growth> full-service carrier growth 30 68.6 15.4 17.5 69.7 13.8 1.2 1.6 3.712 Leisure travelers 50 42.1 23.3 38.4 37.8 20.8 4.3 2.5 3.213 Value-added growth> standard cargo growth 20 73.4 18.5 20 73.2 18.3 0.3 0.2 3.414 CEP growth> value-added growth 25 74.7 17.9 20 64 16.4 10.8 1.6 3.615 BUPs 27.5 64.5 15.9 22.5 65 14.7 0.5 1.2 3.816 Business aviation growth> general

aviation growth47.5 53.6 23.6 47.5 53.6 23.6 0 0 3.2

17 Business aviation to remote areas 37.5 46.4 21.2 37.5 46.4 21.2 0 0 2.518 Consolidation trend 15 79.8 9.7 15 80.3 9.2 0.5 0.6 4.119 Decreasing yields 40 61 19.5 40 60.6 19.1 0.4 0.4 4.420 System partnerships 40 58 17.8 20 58.4 15.7 0.4 2.1 421 Jet pools and fractional ownership 37.5 66.4 20.7 37.5 66.4 20.7 0 0 3.322 Dedicated business aviation airports 40 62.5 22.1 40 62.5 22.1 0 0 3.623 LCC and regional feeder services 28.8 49.8 17.3 22.5 49 16.7 0.8 0.6 3.124 Dedicated cargo airports 62.5 50.6 28.3 60 47.2 27.5 3.4 0.8 3.225 Very light jets and air taxis 30 48.8 18.2 30 45.8 15.7 3 2.6 2.826 Medical air transportation 45 46.4 24.6 45 46.4 24.6 0 0 2.627 Emergency freight 55 46.4 25.5 55 46.4 25.5 0 0 2.628 LCC in long-haul markets 20 39.9 12 18.8 39.3 11.6 0.5 -0.4 3.329 Low-cost cargo carriers 35 35.3 19.3 35 34.2 18 1.1 1.3 3.930 Emission rights 40 64.5 18.7 30 73.1 16.7 8.6 2.1 3.831 Scarcity of fossil fuels 40 69.1 19.9 30 71.8 17.6 2.6 2.3 4.332 Vulnerability 30 62.5 22.3 30 63.3 21.3 0.7 1 3.733 Capacity constraints 50 62.8 25.2 40 63.6 24.4 0.8 0.8 3.834 Liberalization and deregulation 40 60.1 21.1 35 60.2 18.8 0.1 2.4 435 Integrators 40 65.8 23.9 30 65.5 18.9 0.3 5 4.236 Virtual communication 30 62.4 17.6 30 62.4 18.3 62.4 0.7 3.337 Substitution by land transport 40 61.3 22.9 30 63.1 20.7 1.8 2.2 3.438 Substitution by sea transport 47.5 45.3 24 47.5 44 23 1.3 1 3.739 Smaller long-haul aircraft 47.5 62.4 23.3 47.5 62.1 23.3 0.3 0 3.540 Satellite-based ATC 40 57.5 19.9 30 57.1 19.3 0.4 0.6 3.6

Note: Bold font marks theses where nal consensus was achieved.

M. Linz / Journal of Air Transport Management 22 (2012) 28e3532

ort M31). The vulnerabilityof the aviation industry ingeneral increases dueto unexpected events such as economic crises, fuel price explosion,war, pandemics, terrorism, volcanic eruptions, etc. (projection 32).

Passenger aviation and air cargo transport is increasinglysubstituted by land transport for short-haul markets (projection37) in 2025. In addition, the traditional air cargo transportchain, consisting of forwarders, ground handlers, airportsand airlines, is heavily challenged by integrator chains(projection 35).

New, smaller aircraft for long-haul, transatlantic, point-to-point ights are available for business aviation in 2025. Theiremergence in the general passenger aviation business is unclear(projection 39). Business and corporate jets are managed collec-tively in pools. Fractional ownership has become common(projection 21).

Airports will search for new growth potentials in 2025. On theone hand, the non-aviation business of airports promotes furtherairport growth (projection 10). On the other hand, new airportbusiness models, such as dedicated business aviation airports,evolve (projection 22).

Eventualities refer to projections that are characterized by a lowto moderate estimated probability. In contrast to potentialsurprises, these projections are considered possible, but not verylikely. Eventualities are usually subject to dispute. They representthe highest degree of uncertainty and are neither believed to beprobable nor very improbable. Nevertheless, planners should payparticular attention to high-impact eventualities in strategic plan-ning and monitor them continuously since they may inuencebusiness radically. Projections will remain the primary basis fordeveloping strategies, with particularly high-impact eventualitiespossibly forming a secondary basis.

Eleven of the projections considered in this scenario study fallinto the high-impact eventualities cluster. These include thepotential emergence of a disproportionally high leisure and busi-ness aviation growth (projections 12 and 16), the societal accep-tance of business aviation and its appreciation in short-haulmarkets (projections 6 and 7), the provision of access to remoteareas, medical and emergency airfreight transportation by businessaviation providers (projections 17, 26 and 27), feeder services fornetwork carriers provided by low-cost carriers and the emergenceof long-haul low-cost carriers (projections 23 and 28), dedicatedcargo airports (projection 24) as well as the establishment of verylight jets and air taxis (projection 25).

Over the next few years, these projections could become high-impact expectations and therefore key variables in strategydevelopment.

Potential surprises are characterized by low estimated probabilityand average to high impact. Due to their relatively low probability,they are often neglected in strategic planning. However, if they dooccur, they have a high impact on the industry or individualcompanies. It is, therefore, necessary to consider such developmentswhen developing robust strategies. In this study, two future projec-tions have been identied as potential surprises for the aviationindustry:

According to the experts consulted, the use of low-cost cargocarriers as an established and successful business model (projection29), as well as the substitution of air cargo by sea transportation inlong-haul markets (projection 38) would have a very high impact onthe industry in 2025 if they occurred.

4.3. Discontinuities and the surprising future

The previous scenario mapping gives insights into the mostprobable scenario for the aviation industry in 2025 as well as even-

M. Linz / Journal of Air Transptualities and potential surprises. An in-depth analysis of thesurprising future and the derivation of wildcard scenarios isanessential aspect of scenario development. Wildcard scenarios look atthe consequences of individual surprising events or developments.Such incidents have to be considered as innite in terms of time. Thewildcard scenarios presented in the paper outline possible situationsin the future for which aviation companies have to prepare contin-gency plans.

Based on an extensive coding and analysis of the Delphi expertsqualitative comments and arguments, nine wildcard scenarios couldbe deduced for the aviation industry. The comments on the projec-tion about an increasing vulnerability of the aviation industry(projection 32), for example, were used to formulate wildcardscenarios on aviation terrorism, global pandemics, naturalcatastrophes, global economic crises, wars and oil price shocks, aswell as a potential deglobalization and the return of protectionismscenario. The projection was selected because its content has simi-larities with wildcard scenarios, it achieved a consensus within theexpert-panel, and it has high probability and impact. The wildcardscenarios on a possible energy revolution, a revolution in trans-portation technologies and concepts, an era of virtual meetingsand a fabbing society are based on the comments related to theprojections on resource scarcity (projection 31) and substitution(projections 37 and 38) and were included because of their potentialhigh impact. Desk research revealed additional information on theselected wildcards. The nal wildcard scenarios have undergoneaworkshop-based expert check for consistency and transferability tothe industry reality.

Wildcard scenario 1: Natural catastrophes have recently shownthat they may signicantly impact the aviation industry. In 2010,the air transport industry experienced a major disruption ofservices following the eruption of the Icelandic volcano Eyjaf-jallajkull. The volcano spewed an ash plume in the upperatmospherewhichwas potentially dangerous to aircraft. Particlesof volcanic ash can seriously damage engines, causing them toshut down, as well as sandblast aircraft windshields, hamperingvisibility, block fuel nozzles and air intakes for air speed instru-ments, and endanger passenger health. Flights were signicantlydelayed or canceled as a result and major European airports andairspace closed. IATAs initial and conservative estimate of thenancial impact of the volcanic eruption on airlines exceeded$200 million per day in lost revenues and immediately affectedairlines and airports stock values. In addition to lost revenues,added costs were incurred to re-route aircraft and to take care ofstranded passengers and stranded aircraft at various airports.According to Smithsonians Global Volcanism Program, approxi-mately 1500 volcanoes are still active. Each year, 50e70 of thesevolcanoes erupt. The probability is high that future eruptions,especially the very active Icelandic volcanoes, might affect globalaviation. Another danger for civil aviation might arise from space.Planet Earth has always been subject to impacts from comets andasteroids, which pose a signicant danger to life and property.Although the annual probability of collision with a large asteroidor comet is extremely small, the consequences of such a collisionwould be catastrophic. According to the Ames Research Center atNational Aeronautics and Space Administration (NASA), studieshave shown that the risk of cosmic impact increases with the sizeof the projectile. The greatest risk is associated with objects largeenough to inject large quantities of dust into the atmosphere. Ifthey do not directly affect the world climate and destroymankind, there is still the possibility that the corresponding dustplume will affect global aviation, comparable to ash clouds fromerupting volcanoes. Signicant losses in revenues and additionalcosts would be incurred, and global air transportation may even

anagement 22 (2012) 28e35 33become impossible for a longer period of time.

Icet reircraldwer yds asultiel cn atua

f Deens froringbe

nspofre

rt MWildcard scenario 2: The intensive use of virtual meetings has thepotential to substitute air travel to a signicant degree. Businesstravel makes up for about 40% of total air travel. Studies haveproven that between 10% and 35% of all business trips could besubstituted by innovative communication methods. Whethersubstitution of travel by new means of communication is a suit-able alternative depends on the purpose of the journey. Kick-offmeetings, for instance, still require face-to-face communication.The results of regular and follow-upmeetings, in contrast, are notaffected if they are held virtually. The benets of virtual meetingsinclude lower expenditure in terms of time and money, sustain-ability considerations and the familiarity of the next generationwith multimedia applications are just a few of the reasons whycompanies could switch to such forms of communication tech-nology. Research and development has also signicantlyimproved the applicability of these technologies, while at thesame time reduced their costs. Thus, the technology of virtualmeetings and other online events may be considered a potentialrisk for the typical high-yield business travel segment. In addi-tion, the leisure travel segment might be affected because peopleare living more and more in virtual communities.Wildcard scenario 3: The fabbing society could revolutionizeproduction fundamentally. Fabbingmeans the direct fabricationof objects from computer models. Since the 1980s, this type of

Table 5Wildcard scenarios describing eventualities and discontinuities.

Wildcard scenario name Content in brief

Wildcard scenario 1: Natural catastrophes - Costs of the eruption of the$200 million per day in lospassengers and stranded a

- 1500 active volcanoes wor- 50e70 volcanic eruptions p- Several comets and asteroi- Danger from ash clouds re

Wildcard scenario 2: Era of virtual meetings - 10% to 35% of business trav- The sustainability discussio- New advanced forms of vir

of impersonal contact- The so-called generation o

does not differentiate betwWildcard scenario 3: The fabbing society - Direct fabrication of object

3D printing and laser sinte- A personal fabricator could- Strong increase in bulk tra- Decrease in air cargo afne

M. Linz / Journal of Air Transpo34fabrication has been researched under the term rapid prototyp-ing, but so far has only been applied in the industrial sphere.However, with technical advancements and falling equipmentprices, these technologies could also bemade available for privateuse in 2025. In the fabbing society, consumers would be able todownload a digital model of an object they would like andproduce it by their own personal fabricator. Only very large orcomplex objects as well as the basic materials necessary forpersonal fabricators would be produced centrally. Fabbing tech-nology could potentially affect the air cargo industry. The trans-portation of time-critical, simple products, in particular, such asfashion, could be the rst air cargo services substituted bypersonal fabrication. Over time, even more complex products,such as electronic articles, which are usually transported via aircargo because of their high value density, could be produced bypersonal fabricators. The Fraunhofer Gesellschaft has alreadybeen successful in developing a technology to print entirebatteries. It is just a matter of time before more complex productscan be produced via decentralized fabricators. Even if we assumethat decentralized production technologies will become moreimportant, the scenario of everyone having a personal fabricatorby 2025 is still difcult to imagine from todays standpoint.However, it cannot be ruled out. For example, the advantages ofPCs were underestimated for a long time. Ken Olsen, founder ofthe Digital Equipment Corporation, anticipated in 1977 that [t]here is no reason for any individual to have a computer in hishome. By 1998, 21 years later, the US Census Bureau found that42.1% of US households possessed a computer and 26.2% hadaccess to the Internet.

Table 5 provides a summary of the important elements of thewildcard scenarios and allows for easy comparison and analysis:

5. Conclusion

This paper shows that various high-impact eventualities, poten-tial surprises and wild card scenarios are conceivable alongsidea probable scenario for future of aviation in the year 2025. Therefore,long-termplanning based on the pure extrapolation of historical datais dangerous, does not necessarily cover all potential developmentsand might be misleading. The scenarios developed should conse-quently be used as a basis for strategy and contingency planning. Fororganizations already investing in environmental scanning, theDelphi data and scenarios can provide a validation or expansion oftheir own scans. The aviation scenarios developed might be used to

landic volcano Eyjafjallajkull and the corresponding ash cloud:venues and costs to re-route aircraft and to take care of strandedftideearre on collision course with planet earthng from comet or asteroid impacts affecting air transportationould be substituted by virtual meetingsnd potential cost and time savings favor the usage of virtual meetingsl meetings are continuously developed reducing the disadvantages

igital Natives is used to live and act in virtual communities andpersonal and impersonal contact in the same way former generations dom digital models by using additive-fabrication-technologies, such as

an affordable device for the production (fabrication) of goods in ones own homert of fabbing raw materialsight like fashion items and electronic devices possible

anagement 22 (2012) 28e35update or develop new strategies or to test existing strategies withrespect to their robustness and adequacy. The wildcards are partic-ularly suitable for developing contingency plans for the future andmight be integrated into corporate risk management and earlywarning systems.

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M. Linz / Journal of Air Transport Management 22 (2012) 28e35 35

Scenarios for the aviation industry: A Delphi-based analysis for 20251. Introduction2. Prior work3. Methodology3.1. Development of projections3.2. Selection of experts3.3. Evaluation of projections and interim analysis3.4. Scenario development

4. Research results4.1. Results of Delphi survey4.2. Strategic mapping and the probable future of aviation4.3. Discontinuities and the surprising future

5. ConclusionReferences