Quantfury Gazette


Is the future in the air or on rails?

José Albelo
Quantfury Product Communication Team
Is the future in the air or on the rails

Air travel has changed the world; on the one hand, it is becoming more and more common to fly; in the year 2004, there were 1.994 million passengers in the global airline industry; that number increased to 4.543 million in 2019, an increase of 2.27 times in only 25 years old.

On the other hand, paradoxically, the act of travelling is increasingly cumbersome; the duration of flights has increased from the 90s to now, and flights that used to take less time now take more time, mainly to save fuel, sacrificing the quality at service.

Like icing on a cake, new trends are heading towards flying less and less, in favour of other forms of transport such as high-speed trains. Perhaps this explains why in recent years, the stock market estimates the value of airlines as a whole below the value of their own frequent flyer programs. American Airlines (NASDAQ: AAL) AAdvantage program was valued at $31 billion, while the entire company is worth $8.4 billion today. 

Taking all this into account, how will the airline industry change in the coming years? Is the airline industry a polluting relic of the past in a world full of electric cars and clean energy?

One mode of transportation that seems to be gaining in popularity that commercial airliners are losing is high-speed rail. Spain is the European country (and the second in the world) with the most extensive high-speed train network in the world, the so-called “Alta Velocidad Española” or AVE.

Going from Madrid to Barcelona takes the same amount of time by plane as by this high-speed rail, but the ticket price on the AVE is about half, and the experience of the trip is much more tolerable for people with claustrophobic or fear of heights. 

For example, on a high-speed train, you have more spacious seats, a coffee shop, space to stretch your legs and walk during the journey, access to electronics and an internet connection that can turn a cumbersome trip into the opportunity to see a couple of episodes of your favourite series or enjoy beautiful views throughout the trip. This can be a great advantage for families with young children.

All this feeds the trend of flying less, favouring high-speed trains worldwide and the environment since, in general, travelling on a high-speed train is usually much less polluting than travelling on a plane. High-speed trains consume electrical energy to run, which is generally much less polluting than using fossil fuels, such as that used by airplanes.

Knowing all this, it is curious to see that the commercial flight industry is expected to grow in the future, in part because many companies such as American Airlines are no longer only in charge of transporting passengers, but together with their partners are part of financial operations that are more economically profitable, that is, their frequent flyer programs.

The point is that while high-speed trains have great advantages, there are still no transoceanic trains because it is currently impossible to take a high-speed train from New York to Madrid, so the most efficient way to travel across oceans is still the airplanes.

But, one day such a particular trip may be possible or even perhaps these trips will be made in submarines that allow us to observe the marine world, on a trip that becomes an adventure as more and more kilometres are travelled.

Even so, the airline industry is not giving up, and innovations such as hydrogen-powered aircraft are already being developed; this would strongly change the environmental perspectives of travel and could turn one of the most polluting industries in the world into a green industry.

Perhaps in the future, as the transition to cleaner forms of energy has been completed, planes will become part of the travel experience; today (and unlike high-speed trains), travelling by plane is not part of the travel experience, but in a post-oil world travelling by plane could be like travelling in a hot air balloon, a curious experience although not very efficient on a day-to-day basis.

While the technology to make commercial flights even faster already exists and could improve over the years, due to the enormous costs of the airline industry in general, it is understandable that airlines are faced with the dichotomy of choosing to travel faster or more efficient, prefer the latter, making high-speed trains or alternative forms of transportation more competitive.

For example, travelling by high-speed train today may be a better option than travelling by plane, at least between densely populated cities. Simply, not having to go to an airport can save passengers many hours since, for logistical reasons, airports tend to be on the outskirts of cities.

In any case, predicting the future is an exciting and challenging activity in equal parts; it may be that in the future, we will not use planes or high-speed trains, but we will move in some form of transportation that has not yet been thought of; the only sure thing in the world of technology is that you never know what will happen.


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