Technology is fuelling a dramatic acceleration in the pace of change within the transport industry.
Traditional planning and investment cycles used to be measured in decades, but with the advent of mobile technology coupled with a marked change in user behaviour and expectations on one hand, and major demographic shifts on the other, the industry is being forced to adapt to a far faster pace of change.
Urbanisation creating pressure on mass transit systems
The greatest challenge for transport is rapid urbanisation around the world.
The United Nations forecasts that over 80% of the world's population will be living in cities by 2050 and the ability to provide good transport services can make the difference between a city being an engine for national economic growth, or a catalyst for inequality and economic stagnation.
Growing middle classes have new demands
A growing urban middle class also creates challenges. Increasingly sophisticated and web-connected consumers demand a better customer experience as has been shown by the UK Customer Satisfaction Index which continues to plateau year on year, as consumers in a fast paced, connected world become more discerning.
And in high-growth markets, their pre-disposition to holding onto the status symbol of the 20th century, the car, creates its very own specific congestion and safety challenges. Although Ovum notes that in western markets, the appeal of the car shows strong signs of weakening.
JD Power studies in the US have shown that teenagers and young adults are increasingly choosing to remain car-free relative to previous generations, signalling that the market may be seeing the emergence of a "mass transit generation".
Air travel to double in demand by 2032
The final major change is the rebalancing of the globe's centre of economic gravity towards Asia, the growth of Africa, and the consequent underlying global growth of air travel.
Air travel demand is forecast by the Air Transport Action Group to double from the 8.6 million passengers per day in 2014 to twice that at 17.2 million passengers by 2032. Airlines need to fulfill their promise of delivering good customer service in a competitive market, enabling the world to become a smaller place for friends, families and business, and manage this growth in capacity demand.
Against this already complex backdrop, they also need to do so in a manner that demonstrates the industries commitment to managing and minimising environment impact.
- Gary Barnett is chief analyst of Ovum's software team. This whitepaper was produced in partnership with Samsung - follow the links for Part 2, Part 3 and Part 4.
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