Flying Into the Future: How Will AI Reshape the Aviation Industry?

SPEAKER_1 (0:00)

Introducing Fidelity Trader Plus, the next generation of advanced trading from Fidelity. Customize your tools and charts, and access them seamlessly across desktop, web, and mobile. For faster trades, anywhere you go. Try the all new Fidelity Trader Plus. Learn more about our most powerful trading platform yet at fidelity.com/traderplus.

Investing involves risk, including risk of loss. Fidelity Brokerage Services, LLC. Member NYSE, SIPC.

Luke Vargas (0:34)

Hey, What's News listeners. It's Sunday, July 26th. I'm Luke Vargas for the Wall Street Journal, and this is What's News Sunday, the show where we tackle the big questions about the biggest stories in the news. And this week, we've talked here before about AI and automation taking on driving. But what about flying? With the aviation industry facing an array of challenges from backlog of planes to safety concerns and shortages of pilots, mechanics and air traffic controllers, maybe AI can come in handy. But if you thought turning over the wheel to AI was tricky, the margins for error in the skies are even tighter. Let's get right to it.

I am a self-professed av geek, the nickname for plane enthusiasts, but I am no expert in aviation, which is why I've brought in my journal colleague, aviation reporter, Ben Katz, to supply that bit of expertise to the matter. Are you ready?

Ben Katz (1:29)

I'm ready, thank you for having me.

Luke Vargas (1:31)

You and I both spent the past week at Farmboro International Air Show outside of London, where the sound of jets screaming overhead frequently interrupted our interviews. I for one pretty much broke my recording equipment at one point and definitely blew up my ears trying to record an F-35 Lightning, which you're now hearing, but I'm glad I went to the show because I could hear firsthand about the role that folks in the industry think AI can play and the problems that it might be able to fix, because Ben, there are a lot of problems. I think frequent listeners of the show will be familiar with some of these, but if you could just sketch kind of a scene for us of what has broken down across a number of fronts in the aviation world.

Ben Katz (2:10)

As you say, Luke, the industry is really battling with a number of things. At the moment, we're dealing with record high fuel prices, which is weighing on airlines, a lot of disruption, a lot of geopolitics, but even at an industrial level, if we go back 30, 40 years, competition was something that was more rife back then than it is now. We used to have three, four different airframers all kind of competing, giving airlines a lot more choice than they have now. At the moment, we have a duopoly, right? We have Airbus and Boeing that for the most part, dominate the sale of big commercial aircraft to airlines. Part of that problem is just simply the technological hurdle and the associated cost of how much money it takes to develop a new aircraft. And that's really kept out new entrants. Bombardier is a good example.

The now A220, that was an independent aircraft that fell into hard times and was snatched up by Airbus. That was an attempt to kind of break the duopoly. But the promise of AI maybe lowers the burden of that threshold a little bit.

Luke Vargas (3:05)

We'll see, though we should say even for Boeing and Airbus, they can't make enough planes, which is another issue.

Ben Katz (3:10)

Absolutely. I mean, manufacturing delays is something that has been plaguing the industry since even before the pandemic. Coming out of the pandemic, suppliers have really been struggling to keep up, to meet the aggressive ramp up schedules. A lot of frustration out there from airlines that they can't get their planes.

Then of course, there's just the fact that the planes that are being built, a lot of questions around quality of those aircraft that are coming out. Obviously, Boeing in particular has faced a lot of challenges in that space over the last few years with the 737 MAX and more recently with the 777X. There's an irony here because it's the question of human labor and the people that are, you know, at airports managing ATC towers that are conducting the maintenance, that are doing the ground handling, that are making the planes, that are flying the planes. I mean, it's endless. There are millions and millions of millions of people in this industry and we lost a lot of them during the pandemic.

Luke Vargas (4:00)

Okay, we're going to get to really all those challenges over the course of our conversation here. And let's now start to bring in some of the voices I spoke to at Farm Bureau to talk about how AI could help fix things. And let's start with competition, one of your first points. Basically, as you said, the kinds of commercial aircraft in the skies now are more or less variants of the same design, Boeing and Airbus making most of them.