In last week’s article I explained how the aviation sector has suffered as a result of persistent Covid-19 shocks.
In this article I will focus on how connected risk links the aviation sector with other verticals such as travel and tourism, hotels, manufacturing, aluminium and the (surprisingly large) inflight technology business.
The global revenue for the travel and tourism industry was an estimated $396.37bn in 2020 – a decrease of around 42.1 percent from the previous year.
Additionally, this is significantly lower than the original 2020 forecast of around $712bn. Source: Statista Mobility market outlook.
In May 2020, the hotel occupancy rate in Europe saw the most dramatic effects of the virus, with occupancy rates of 13.3 percent, a drop of 82.3 percent compared with the previous year. Source: Hotel news
The release by Airbus and Boeing of full-year 2020 order and delivery figures has brought into stark view just how significantly the Covid-19 pandemic has affected the world’s two largest airframers. Combined, the companies delivered 723 jets during the year, down a staggering 42 percent from 2019. With these falls in aircraft orders, as might be expected, there has been a knock-on effect in aluminium production.
In 2019, the average price for aluminium stood at 1,794 nominal US dollars per metric ton, falling to 1,660 in 2020. World Bank Commodities Price Forecast.
The US metals market saw the removal of an estimated 33,000 vehicles per day from production as all major auto producers across the country halted operations in response to government mandates and concerns over the welfare of workers. In the US, the automotive sector is the largest end user of aluminium, according to S&P Global.
Global in-flight connectivity services
In 2019, the market for passenger connectivity services generated $1.7bn in revenue. By 2029, in a low-case scenario due to the coronavirus pandemic, this market is expected to generate $6.1bn, rather than nearly $8bn in a high-case scenario, according to Statista.
The pandemic is a connected risk that has paralysed both the services industries and global supply chains. An increased perception of this kind of connected risk exposure has elevated the discussion to the C-suite around what we should now consider remote risks to be, and the volatility associated with such risks. There is a need for better business insight and data collection on a more frequent basis, as economies emerge from their enforced paralysis. Overall, businesses will need to assess exposure outcomes more frequently than they have in the past, moving to a more near-time exposure assessment, built on real-time data collection and analysis.
Helping you think the unthinkable
We have helped clients to think about the things that they haven’t had the time to think about. We’ve helped them use data in an integrated fashion in exposure aggregation and pricing. To the point where today, we’ve got our clients to understand the connected risk, while also understanding the need for real-time analytics.
Through our proprietary analytics platform ALPS, we help your business anticipate, absorb and adapt to the effects of rapidly changing circumstances in a dynamic environment to enable it to deliver its objectives, to survive and prosper.
Russell has always been a dynamic and forward-thinking company with the imagination to create.