About a month ago, on 16 May, I delivered a presentation on future aircraft fuselages and likely ways in which we will be monetizing both the physical as well as the digital assets of new aircraft fuselages.
This week’s post is a script I created based on that presentation. I hope you find it interesting and useful.
Read on to find the full talk.
There was a time where people carried more flashy cash money and shiny coins in airports and on planes. At one point, American Airlines reported having swept up over USD 125,000 worth in coins found in their proud aircraft cabins. I don’t remember whether it was the total in one year, or a total so far.
Now, people don’t easily loss money or bills, and today, of course, little cash is carried in people’s pockets.
But I haven’t been invited up here to talk about coins. But I will end up talking about optimizing the monetization of aircraft and cabins, because I believe aircraft themselves will be generating the next billions of revenue.
So, we’re going to be discussing future aircraft, their fuselages and cabins, and how we can monetize and optimize them.
And for those that don’t know me, I’ve been in the airline industry for 30 years as commercial strategist, worked with many airlines such as Air Transat, Air New Zealand, Emirates, Singapore, FedEx and Etihad, and many others as advisor in strategic roadmaps. In the last 5 years, I have specialized in behavioral and organizational psychology, artificial intelligence, and organization design. In this capacity, I also work with aircraft manufacturers.
So, aircraft cabins. And let’s go back briefly so we discuss what’s next and why.
Aircraft were first designed to, well, fly. It started with Leonardo da Vinci’s 200+ designs of flying machines in the 1480s, then Sir George Cayley’s “Proposed Aerial Carriage” of 1843, and then the Wright Brothers.
The way aircraft were designed was always around fuselages that needed to be carried by wings. It’s not ideal. But that will never change. The way we do will.
So, anyway, the purpose of aircraft and wings is (1) to generate lift, and (2) to be able to carry payload (mail, passengers, and later cargo).
And since the early days, aircraft have looked more or less the same.
The basic fixed wing design remained the same but there are different variations for different applications, such as civil versus military aircraft.
We have fixed wings, rectangular wings, swept-back wings, and delta wings (for high speed military jets).
Now, as aircraft manufacturers focus on the next level of efficiency gains, we could see a very differently shaped aircraft. For instance:
Some European researchers in Italy and the Netherlands are looking at box-wing aircraft. This is different than rectangular wings in that the “box” connects the main wings with the tailplane (see picture).
Such planes can carry more passengers and cargo than current commercial aircraft without significant increase in fuel consumption.
According to calculations, box-wing planes will carry 100 more passengers than ordinary jets of this size. So we’re talking 300-400 passengers. A more efficient version of an A380 of sorts.
And researchers are hoping the real-life box-wing plane will fly by 2035.
Nonetheless, all in all, the aviation industry is facing a range of fundamentally new challenges, from economic but more so environmental, which impacts on aircraft economics of course.
The issue is that the traditional advances in engine, wing, and wingtip technology we have seen result in 15-20% more efficient engines and reduction in CO2 will not do enough toward the ambitions of regulators and industry. It won’t get us to net Zero by 2050.
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The question is, can other changes to design features like the fuselage be enough to tackle them? And what does this mean for the cabin in terms of passenger comfort, in-cabin behaviors, and the opportunities to monetize these cabins differently.
The fact that we need to carry payload will not change, but the way we do will. For instance, the Netherlands’ Technical University’s collaboration with KLM looks at a design that is referred to as the “V” airplane. And it looks like this.
The “V” airplane is what we call a blended wing aircraft. It’s where the fuselage, actually the cabin itself, is integrated into a single large wing structure.
It removes all the unnecessary aerodynamical drag that is present with an attached fuselage structure.
Airbus showed off this type of design in Feb 2020 at the Singapore Air show. Airbus calls it Maveric, for Model Aircraft for Validation and Experimentation of Robust Innovative Controls.
I think the name came before the acronym and description.
Anyway, it follows the same principle. They also unveiled a scale model demonstrator aircraft that is 2 meters long and 3.2 meters wide with a wing surface of 2.25 square meters.
The TU/KLM’s version weighed 22.4 kgs (or 50 pounds) and is slightly larger with a wingspan of 10 feet. The full version would seat around 314 but would be shorter than the Airbus A350 but a similar wingspan.
Also, there is another company, Nautilus, in San Diego, that is designing a blended wing aircraft. Even Bombardier was looking at this.
In terms of fuel consumption, wing tunnel tests have already shown a potential reduction in fuel consumption between 20 and 27% compared to current single-aisle aircraft. Seems, everybody is in the 20-25% reduction ballpark. But it’s not enough.
Even though at full scale, it is still likely to be lighter than a traditional fixed wing aircraft, further improving efficiency. That is because the wings don’t need reinforced attachment to the fuselage.
So, anyway, the demonstrator model flies. That’s one thing.
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But scaling up the technology has major challenges, not in the least the repercussions on carrying payload.
Despite that, this is potentially a game-changing and industry-forward concept.
One key aspect is that the configuration of blended wing aircraft also opens up new possibilities for propulsion systems type and integration, as well as a versatile cabin for a totally new on-board passenger experience.
So, the blended aircraft could also facilitate the transition to hydrogen aircraft.
[In fact, on Zero Emissions Day, on September 21, 2020, Airbus unveiled a portfolio of three aircraft, including one blended wing, but all hydrogen-powered proposed aircraft, known as ZEROe range. They would be emission-free, and offer a 100% reduction. The blended wing version had the highest capacity of 200 seats, with a range of 2000 nm (3700 kms)]
The blended wing concept is not an entirely new concept. It originated over 75 years ago, but was only used for military aircraft by Germany and the USA and the former USSR, and England experimented with it.
While in the last few decades there was much discussion about the blended wing, instead the focus went to (1) upgrading and more efficient engines, (2) improved wing design, (3) use of lighter components.
But now we’re proposing real passenger applications.
In reality, this is still hard to achieve.
First, the fuselage area needs to be deep enough to be usable, and that increases drag again.
In addition, control and stability is a challenge to overcome as the design doesn’t have a vertical stabilizer.
But, there are also practical challenges that affect commercial design. For example:
Such aircraft would have a large internal fuselage, so it can target the high-capacity market only
There are challenges operating at smaller airports and the required non-standard ground equipment
There could be problems with access/egress and thus safety in evacuation
Engines would be part of the main structure rather than mounted on external pods, complicating maintenance access.
Just as an example, the Boeing 747 was originally designed as a military but then civil aircraft with a full-length upper deck, but this was not possible to work under evacuation limits.
Either way, of the blended wing designs, there are two main versions of the blended wing, KLM’s delta-wing shaped aircraft and others like Airbus, with an elbow or kink in the blended wing.
So, there are additional main issues:
A. That of cabin pressurization. A tubular plane is perfect pressure vessel, and pressurizing a vessel with such a large internal cabin is difficult.
B. The wide aircraft creates higher G-forces of up to 2G for the seats on the inside, very much so when the aircraft banks, compared to people on the elbow side of the wing.
C. And there’s the evacuation egress problem when there is more distance to the emergency doors. That will be the main regulatory hurdle.
But passenger comfort is not as easy as it sounds, particularly when the aircraft banks. Otherwise, there are major benefits.
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And that is the second part of my talk.
SO, a blended wing is a volume-centric aircraft.
And because it has more volume, it can likely carry more cargo or parcels with lower weight density. That’s something that is often constrained on conventional aircraft. So, there’s about 30-40% more volume in the belly potentially.
But depends on where we put the floor and weight distribution.
The blended-wing fuselage also offers an exceptionally deep and wide blended fuselage, or better called internal cabin.
This also opens up multiple options for cabin layout.
Because of the size and shape of the aircraft, seats can be at an angle or pivot. The significance of this is that movement-forward views are possible, while groups of seats can pivot differently for small group meetings or mini lounges without loss of space.
Because the blended wing is not round or oval, the ceiling could theoretically provide more daylight or square overhead space.
The overall structure may be higher so the seats can have more clearance off the floor, providing more legroom or carry-on space.
Also, depending on how deep the internal fuselage is, there could be seats on an angle along the wing surface; there could be staggered seats, or bunk beds.
However, proximity to windows and aisles may be reduced by 40% and due to structural integrity requirements, windows cannot be added in the ceiling.
Even though some were looking at Membrane Panoramic Roofs but it’s an expensive way of looking at the sky, and it undermines structural integrity and weight goals.
So, we need artificial light and augmented reality to create the perception of outside views. But it’s also conceivable that we put media and advertising screens above the seats for when we recline, since more seats could recline, further.
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Now we get to monetization.
And while the industry has focused so much on cabin designs for comfort and entertainment, it is my view that the next billions of revenue will be generated by the very aircraft themselves.
The blended wing aircraft is a good enabler.
When you look at a cabin, we use the LOPA, the Layout of Passenger Accommodations. It’s a real-estate plan, really. Like, maximizing passenger space for comfort while minimizing the loss of space for seats that can generate revenues.
And sensory data can be obtained from nearly every object and fixture in the plane including seats and from anonymized camera data. Some of the sensors are already installed in seats to help prevent and predict maintenance.
But aircraft are more than cabins. Aircraft are platforms and have assets that can be monetized if we take a different approach.
Aircraft have physical and digital assets that can all be monetized.
Physical assets. These are all cabin fixtures, bulkheads, panels, window blinds, doors, seats, overhead bins, ceilings, and spaces that can be used for subtle ambiance and impressions (public or personal).
Digital assets. These are interactive screens (IFE), digital billboards, pop-up impressions on people’s personal devices, and not in the least aircraft systems and pax behavioral data.
Aircraft can also generate data to provide insights into the passengers’ moods. Like what they seem to do and enjoy, when they sleep, or shop, and where they go digitally, and this behavioral data is valuable for many retailers and other transportation providers (trains, ferries, bus companies).
So, it can be anonymized and sold. To airports, too. It can be done, and adds value in generating new services and interesting experiences. Combined with VR, we can do even more.
In-flight interactive billboards in social spaces (bars, lounges, gathering areas) can generate insights for advertising platforms, which would be another channel and customer group to sell to/through. And be a partner to use in improved immersive retailing, like bringing metaverses onboard.
These social spaces make more sense then when they were proposed for the 747 or A380.
Governments are also more and more interested in data generated by aircraft (systems, fuel burn, dynamic real-time route optimization for ANSPs). It will be a revenue model of sorts, or can be blended in with navigation charges.
Clearly I’m also driving at blending in more advertising tech (AdTech) in a palatable way, and the overriding requirement is to mix public with private impressions that can be personalized on the smaller ‘billboards’ and screens without being too intrusive.
We can try to monetize more of the interactions with passengers through the Inflight Entertainment & Communication (IFEC) systems and their personal devices (PDAs), but that’s already pretty common and in the works.
Airlines such as Air Asia have sophisticated inflight retail POS systems that automate the back-end and integration, too.
There will be predictive analytics and dyamic bundling for longer flights soon, too, but also to reduce waste, as I proposed to a few airlines.
But, I suggest the O&O approach to become more one of dynamic procurement, but for “ancillary retailing” of life-style and travel related products and experiences.
The potential additional spend I found was $1,500, which is what people usually spend during a 7-day trip on the ground for anything other than the airplane ticket, hotels and restaurants.
That is a large potential share of wallet to tap into with a properly executed digital cabin.
So, we need to move to commercial optimization platforms on these aircraft.
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This can be done on artificial intelligence platforms that integrate the passenger’s mood, state of mind, and well-being on board. I can do this with sensory date from cameras.
That’s how it is coming together, and that is what is proposed by Carrot in Cabin, Carrot standing for “Cabin Assets and Revenue Returns Optimization Technology”. It also applies conventional but augmented pricing and revenue management principles together with dynamic procurement, real-time contextual pricing driven out of loyalty (see article). It incorporates B2C and derived B2B as well as B2G revenue streams.
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Finally, all this has implications for lessors, too.
They will gain much better insights into how aircraft make money with more revenue streams. It will update valuation models and leasing fees, but in a way airlines can recuperate.
They can update their valuation methods for specific enabling aircraft. The Rate of Return will be more favorable.
Question is: Would people warm up to flying in these machines?
Wishing you all a wonderful day, and greetings from Montréal.
Ricardo
Montreal, Tuesday, 20 June 2023
Feel free to contact me for questions, comments, or a chat:
ricardo(at)pomonaadvisors(dot)com
my general email has changed to: info(at)ricardopilon(dot)com