What are the biggest challenges in terms of integrating digital technology into the aviation industry?
While I am new to the industry, the biggest challenges I have encountered to date are:
- Complex, highly regulated environment where airlines are not in full control of the end-to-end experience of our customers. To create a digital experience that truly delights our customers we must consider how to coordinate and possibly integrate with airports, public transportation, ground handling companies, etc.
- Technical constraints of our legacy technology that supports our core operational processes. While this older technology is not a limitation, it does add complexity and cost to initiatives to digitalise our business. We are often at the mercy of these software suppliers to add needed interfaces or features to their road-map.
- .The business and environmental complexity in which we operate. Different languages, currencies, airport systems, contractual relationships we have in place create cost barriers to introducing new digital technologies to automate manual work and create stronger connections with our customers.
How can digital technology transform the passenger experience?
From the perspective of a ULCC, the biggest transformational impact of digital on tomorrow’s passenger will be if they are someone who has never flown before. At Wizz Air, we strongly believe that our mission is to enhance people’s lives and expand their business horizons by offering low-cost travel. Digitisation will continue to drive our costs down and allow us to serve new customers in a affordable, scalable way. Over 80% of the people in our key markets in Eastern Europe have never flown before. A highly digital airline is a highly cost effective airline; opening up the world and new experiences to a entirely new portion of our society.
The other big impact from digital will be further personification and integration of the travel experience. Without waxing on too poetically, air travel is often tied to key experiences and moments in our lives – e.g. a romantic vacation with your significant other, a holiday with the family, a wedding or even an important meeting to close an important deal. By creating a deep understanding of our passengers’ preferences, needs and desires, we can build a bespoke experience and remove friction, creating an experience that delights and builds repeat customers.
So what might this look like in the not too distant future? It starts with inspiration: a personalised offer to a family of six who travels somewhere warm during the kids’ February break. Removing friction means seamless integration with transportation to/from airports via Uber or even public options like trains. Integrating meals, coffee, retail offers, beers, etc. from partners enhances the trip. And of course, once on-board the flight, the crew should be able to personally serve each customer based on past travel experiences. And further extending might mean offering personalised experiences in the destination city. While all of this exists today, no one does it well – data-driven, end-to-end, fully seamless.
This interview with Joel Golberg is part of the Digital Advisory Board Report. Go here to download the full report.
What new revenue opportunities will emerge in a digital world?
While I am sure there will be new opportunities for revenue generation, the more important opportunity will be to capture existing market share and revenue in adjacent products. As I see it, the real battle to be fought and won in the ULCC industry is who will own the face to the end consumer. Digital trends such as network effects appear to be driving us towards fewer, bigger and more powerful digital winners. Look at what Amazon has been able to do within the retail industry, essentially disrupting the ability of brands to maintain the strong relationship they have traditionally had with consumers. If airlines are not careful, we will become an essential but unremarkable
‘cog’ in the overall travel experience which will be orchestrated and owned by one of the big tech driven companies. To stay relevant, we must become digital leaders and be able to provide a digital experience on par with the tech leaders.
Which part of the end-to-end journey do you see digital having the most impact?
While in the short-term, I believe digital will still have a significant impact on the core part of the end-to-end journey that happens between airports such as self-check bags, paperless tickets, etc. as these existing digital technologies become even more widespread.
In the longer-term, however, I believe that digital will connect and extend the boundaries of how we understand and serve the consumer’s journey. The majority of money spent on a week long holiday is spent on goods and service that are not part of the core travel journey, i.e. flights and airport purchases. And yet, as airlines we have tremendous amount of data on when, where and why people are travelling. Leveraging this data and combining it with strategic partnerships in our key markets, we should help our passengers have the most amazing journey to wherever they are travelling.
What is your airlines digital strategy?
Our digital strategy is focused on three main pillars:
Pillar one is digitalizing the core operational processes that are the foundation of running a cost effective airline. One way we achieve this is creating a touchless back office built on digital work flows and powered by AI. The second way is building intuitive, digital-driven services for our consumers to obtain what they need at their convenience and do so at lower cost. By building this digital foundation for our business operations we can leverage the benefits of scalability, measurability and ever dropping cost of computing power.
Pillar two is building a deeper understanding and personalized connection with the consumers that we serve. In the simplest terms, we see this connection as the key to our ability to win, serve and retain our customers at the lowest cost. And to execute this strategy, we must have two fundamental digital capabilities in place. First, we need a single view of our customers across all touch points. And second, we must be able to use this data foundation to offer hyper-targeted content and services based on real-time context.
The third pillar is all about digitizing our workforce to maximize productivity and more importantly the connectivity across our company. The key to our success over the next decade is to be able to attract world-class talent and retain them by ensuring they feel a part of a modern, special place to work. From digital flight logs to collaboration tools, putting modern tools in the hands of our people helps them do their job better – whether it is sharing bright ideas or just working more efficiently.
This interview with Joel Golberg is part of the Digital Advisory Board Report. Go here to download the full report.
