Adapting to the Shifting Sands of Supply and Demand

Blog

 

Kaihan Krippendorff shares a post that identifies the need for agility in the face of major disruptions, such as COVID-19, and explains how companies can adapt their product to meet the shifts in demand.

“As the COVID epidemic rounds through its second year, Gen Xers, like me, are happy to avoid airplanes. On average, compared to younger travelers, our houses are bigger (so why risk leaving?), we have kids at home to be with and care for, we have the seniority at work (so who is going to tell me I can’t work from home?). While younger Millennials are itching to escape smaller apartments for warmer beaches with friends or conferences with colleagues, we are happy to stay put.

This creates a challenge for airlines. While air cargo reached an all-time high in 3Q 2020, US airline passenger volume is down by 60% compared to 2019. Not only has volume bottomed out, but the mix of customers flying has shifted. Gen X business travelers are out. Gen Y vacationers are airlines’ best hope of a recovery.

Now, as my analysis of industries’ vulnerability to the COVID crisis shows, airlines are in trouble. They have low profit margins and weak balance sheets. In the most optimistic case, experts project that US air traffic volumes may recover to normal levels in 2024. In a pessimistic scenario, by 2024 we may still be almost 20% below normal volumes.”

 

Key points include:

  • Adapting your product 
  • The attribute map 
  • How to adapt 

 

Read the full article, Adapting Your Product Is A Life-or-death Skill … Here Is How, on Kaihan.net.