The Tech Giants coming for airlines

Airlines could emerge from the COVID-19 crisis with very different business models and revenue streams.

Aviation industry experts are already envisaging new ways for carriers to make money, such as through subscriptions or membership-type services.

But taking an wider view, some see the possibility for big technology players to enter airline operations.

The thinking is that credit card companies and other data heavy technology players, think Google and Microsoft, might consider entering the space.

The idea was shared by Rohit Talwar, futurist and CEO of Fast Future at last week’s online Flightplan event.

In his presentation, which discusses various scenarios for carriers going forward, he says that big tech companies might “start to do joint ventures and pure plays in this space.”

“They have stayed away in the past,” he argues. “Maybe now they see the industry acknowledging that it is really a data industry, that happens to have planes and airports attached, with people at the core, that it’s data and the applications that process it that are really what make the industry work, might encourage big technology players to move in.”

It’s not a huge stretch of the imagination given that Amazon has operated cargo-focused Amazon Air for some time.

A further segment of the event touched on whether airlines are a good investment in the crisis.

Christoph Mueller, former-CEO of Malaysia Airlines and Aer Lingus, says that while the market caps of airlines are down and stocks have lost up to 80%, others have invested in carriers.

He pointed to a German entrepreneur doubling his stake in Lufthansa recently and Qatar Airways paying £465 million in February to increase its stake in BA-parent International Airline Group.

Mueller says: “You seem some prominent examples of careful and sound investments. I have a lot of confidence that lots of airline wll come out of this with a new, regained strength.”

A few days after this event, Warren Buffet of Berkshire Hathaway sold his stakes in four U.S. carriers, worth around $4 billion.

source: phocuswire