Interview: Gary Weissel, Managing Officer For Tronos Aviation Consulting
Gary Weissel, managing officer for Tronos Aviation Consulting, gives insight into the latest cabin interior trends in the post-pandemic era.
Below is a rush transcript of our interview with Gary.
Linda Blachly: My name is Linda Blachly, news editor for Air Transport World Aviation Week Network. And here with me today is Gary Weissel, managing officer for Tronos Aviation Consulting. Good afternoon, Gary, and thank you for joining us.
Gary Weissel: Good afternoon, Linda. I'm happy to be here.
Linda Blachly: Tronos has continued to track aircraft interiors trends and make forecasts throughout the COVID-19 pandemic, which has seen airlines post huge losses this year, throwing them into survival mode. Gary, as the interiors market is driven by airline profits, can you give us some insight into the trends you're seeing for cabin interiors?
Gary Weissel: Yeah, I'd be happy to. So kind of where we've seen aircraft interiors go in the past, even with the last two downturns after 9/11 and then the 2008 crash, it really doesn't recover until you start seeing continued profits. Multiple quarters of profits from the airlines is really when you start to see significant growth in that industry. So the market overall, the retrofit market as we anticipate will be down about 50%, at least over the next five years with similar results in the new delivery forecast for interior components as well.
Gary Weissel: IATA came out in late September with a number of different data sets, one of them looking at kind of load factors and break even. And even with the sort of summer recovery, which leveled off kind of in August, load factors, even on the domestic international was very low because it's difficult to travel internationally today. But even on the domestic market, I think IATA was estimating load factors kind of in the low to mid 60’s and airlines to even break even have to be much closer to 80. So until we see that, airlines, even if they're flying smaller fleets, even the flights that are flying, they're not making money on. And so we'll really need to see that happen before we really start to see a recovery.
Gary Weissel: And in terms of what has occurred so far, up until really the cabin retrofit activities came to really an abrupt halt at the end of March, really with the shutdown in the U.S. and around the world. So the market size for 2020 was effectively what was accomplished in Q1. There have been some ongoing so overall we think it's down probably about 65% just in this year that's on retrofit. And everybody's still in survival mode. The airlines are in survival mode. The suppliers are in survival mode. We've seen significant layoffs, not only at the airline side, but in the supplier side on the average of about 30% and then a number of facilities have continued to kind of be shut down. So there's very little going on, a lot of focus on clean and healthy cabins. And we have seen a few airlines and solutions out there for temporary cargo mods to take a passenger aircraft and allow it to carry cargo whether on top of the seats or removing seats and putting cargo on the main deck.
Linda Blachly: And we've seen companies roll out physical innovations and concepts to address some of these concerns of spreading germs in the cabin, such as seat isolation solutions that include plastic hoods over seats, dividers, to staggered seat rows. Have you seen airlines actually commit to implement any of these types of innovation so far?
Gary Weissel: Yeah, we have not run across it. There was a big push a couple of months ago that was ongoing for three or four months by a lot of the suppliers and design firms; I know they're coming up with the solutions. But we really think the airlines are waiting for a vaccine as opposed to a knee jerk reaction for something that could be obsolete in less than a year. As soon as the vaccine comes out, a lot of this stuff is going to be obsolete.
Gary Weissel: And what's interesting is IATA came out very recently with its data analysis of people that have flown kind of since this whole pandemic started. And I think they came up with a one and 27 million chance of a passenger contracting COVID while being on an airplane and the DOT and United, and as you know, just came out with a study, I think within about the last week, where they as well showed very low or highly unlikely transmittal, even on a 12 hour flight, if people at least are wearing masks. Just the turnover of the amount of air in the cabin really does an enormous amount to limit the potential spread.
Linda Blachly: And so what potential cabin enhancements have you seen thus far?
Gary Weissel: Sure. I mean, in terms of actual implemented enhancements, I don't know that we've seen much beyond some airlines going with more onboard hand sanitizer stations when you talk about something being permanently mounted, let's say, in the cabin. I think there's been a lot of implementation and further interest in touchless technology enhancements for both the crew and passenger interface. There have been touchless technology out there for lavatory faucets. Now we're starting to see people promoting a completely touchless lavatory being one of the areas on the airplane where kind of the COVID transmittal could happen from touching, so touchless flushing, touchless lights.
Gary Weissel: We're seeing a little bit more focus on surface materials, incorporating antimicrobial properties for seat backs even fabric and/or leather and all the touch points around the chairs and the seat-back tray tables. We have seen some, a lot of market presentations around cabin air ionization and additional cabin cleaning, but we haven't really seen a lot of that take hold. And then again, like you said, just a lot of these isolation things where we really don't see them as being as really having any legs because first of all, the airlines don't have any money to spend. And secondly, they're not willing to spend what little they can come up with for a solution that may be obsolete very quickly.
Linda Blachly: And what about passenger confidence? Have you seen any improvement in passenger confidence since the airlines have been slowly returning to the skies?
Gary Weissel: Yeah, we think we have. So IATA did a couple of really interesting things. They've been continuing to do this I think even since April, when this whole thing started, doing significantly large passenger surveys where they're looking at talking to over 5,000 total participants around the world in multiple countries, kind of a 50/50 business/leisure split. And on the last set of data that came out, I think in August, there was a little bit of an uptick on small percentage points, but at least going in the right direction for people kind of willing to travel now or being willing to travel in a couple of months. So that's really good. I think the industry in general has done a phenomenal job, at least the airline industry and the OEMs at helping passengers overcome the concern of, "Gee, I'm going to catch COVID on an airplane."
Gary Weissel: And I thought, just because of everything that's going on in the airplane, I thought it was really interesting in the latest IATA study that they just put out the results of the survey that came out just within the last couple of weeks, that actually the fear of catching COVID on a plane, it was number seven in the list of total items. And people not flying was really more driven by quarantine requirements, their concern of catching COVID while they're away from home, travel disruptions. They don't have a reason to travel. Things at their destination won't be open. Or they're concerned about having to eat out while they're traveling and hotels. And really the airplane itself, which maybe in the very beginning was number one, has really dropped down. In terms of, I think the industry has done a really good job with getting us there.
Linda Blachly: And how long do you predict it will take the interiors market to recover after this pandemic?
Gary Weissel: Yeah, I mean, we're really looking I think at probably four to five years until we start to see significant spend returning to interior retrofit. Again, we had about a 65% drop this year. We're still seeing, that's probably going to roll into next year where we maybe have 64%, 65%. Overall we're looking at the market having shrunk about 50% over the next five years. And even the spend in 2025 talking retrofits is still down probably about 15% to 20% below what the forecasted spend was for this year. So again, really the market has to come back both domestic and international. The airlines have to refill their coffers and kind of dig out of this hole that they've got themselves in, have multiple quarters of profits before they're willing to really start to turn around and address, get back to kind of where we were last year with these really large interior retrofit programs.
Gary Weissel: The problem is modifications on the interior in general are discretionary. So if you don't have discretionary funding, you're not going to be able to do these large interior retrofit programs that truly drive, the big ones are really the ones that drive the size of this market.
Linda Blachly: All right. That's really great information, Gary. And we really appreciate you taking the time to join us today and for your great insights. This is Linda Blachly reporting for Air Transport World Aviation Week Network, and have a great day.
Gary Weissel: Thank you.