Interview with Chai Eamsiri, CEO THAI Airways – Embracing digital
This short interview with Chai Eamsiri, explores THAI Airways’ evolving relationship with digitisation. In line with their rehabilitation plan, the airline has shifted their approach, positioning digitisation at its heart. This evolution translates across the company from running operations with half the previous staffing levels to the different ways of reaching out to customers.
How are digital investments helping to grow your airline’s revenue?
What changes have you made to enhance the sales experience for your customers?
How will the return of China’s tourist market impact your strategy?
United Airlines and Archer Aviation announce first commercial electric air taxi route
Yesterday, Archer Aviation and United Airlines announced their plans to launch the first air taxi route in Chicago, between O’Hare International Airport (ORD) and Vertiport Chicago from 2025. Archer design and develop electric vertical takeoff and landing (eVTOL) aircraft for use in urban air mobility networks. For more information on the history of the start-up’s ties with the airline giant read here.
The pair and seeking to provide a “safe, sustainable, low noise, and cost-competitive alternative to ground transportation.” The initial point to point route using Archer’s eVTOL aircraft will reduce the journey from O’Hare International Airport (ORD) and Vertiport Chicago to ten minutes, down from over one hour at rush hour.
Michael Leskinen, President of United Airlines Ventures said:
“Both Archer and United are committed to decarbonising air travel and leveraging innovative technologies to deliver on the promise of the electrification of the aviation industry […] Once operational, we’re excited to offer our customers a more sustainable, convenient, and cost-effective mode of transportation during their commutes to the airport.”
Governon JB Pritzker highlighted the sustainability potential from the partnership:
“Here in Illinois, we are taking bold steps to lead the clean revolution – paving the way for a more sustainable future for our state, our nation, and our world […] I can’t think of a better team than Archer and United to partner with as we work to ensure our existing aviation infrastructure can support this new and exciting form of transportation. This partnership is just another way that we will achieve our goal of transitioning to 100 per cent clean energy by 2050 – all while saving Illinoisans money and creating thousands of good paying jobs in the process.”
According to the press release, Archer and United’s early launch routes will focus on airport to city centre transportation aka. “trunk” routes before expanding to “branch” routes connecting the surrounding communities.
Interview with Aldric Chau, General Manager Digital, Cathay Pacific Airways Limited – Generative AI, data science, and tech trends
In this insightful interview with Aldric Chau, General Manager Digital, Cathay Pacific Airways Limited, the conversation explores the prevalence of data science and digital innovations for the industry broadly, before focusing in on how they materialise at Cathay Pacific.
Here, Aldric also identifies the tech trends he foresees having the greatest impact on the industry in the next few years and explores the potential of generative AI and ChatGPT.
In what ways has data science influenced the industry, and how is Cathay Pacific leveraging this?
Can you explain what drives Cathay Pacific’s digital transformation?
Would you be able to outline some of the digital product innovations with the most power to transform the industry?
Could you name two or three tech trends that you think will have the biggest impact on the industry in the coming year?
Interview with Andreas Slettvoll, CEO CHOOOSE – Sustainability and regional trends
At Aviation Festival Asia 28th February – 1 March 2023, Andreas Slettvoll, CEO CHOOOSE discussed some of the climate-focused tech company’s recent partnerships, explored sustainability trends in the APAC region, and explained the dynamics between carbon capture and sustainable aviation fuel (SAF), all in this five-minute interview.
From the geographical nuances of sustainability to the dynamics of corporate travel emissions, this brief interview gives a useful insight into the factors at play in reducing aviation emissions.
Could you tell us a bit about your partnership with JetBlue and what is happening here?
Could you explain your partnership with SAP and how the client app will help corporate travellers reduce their emissions?
What trends are you seeing in the APAC region with regards to discussions around sustainability?
Could you explain a bit about carbon capture’s relationship to SAF?
ZeroAvia and Fortum partner to develop hydrogen production
This week, ZeroAvia signed a Memorandum of Understanding (MoU) with Fortum, one of Europe’s cleanest energy producers, focusing primarily on the Nordic region.
The Nordic countries consist of some of the most sustainable countries in the world including Denmark, Sweden, and Finland. These countries have ambitious goals with regards to reducing emissions. Last year, Denmark set 2030 as their target for dropping all fossil fuels from domestic aviation. Additionally, Finland set their sights on zero-emission domestic air travel by 2045.
ZeroAvia, a hydrogen-electric aircraft developer has a mission to see “a hydrogen-electric engine in every aircraft.” Only founded in 2017, the company already made history with a zero-emission flight back in January. This week, they announced a signed MoU with Fortum “to explore developing hydrogen production and refuelling infrastructure at airports in the region.”
“Scaling the renewable energy capacity and reducing costs pose clear, but fully surmountable, challenges to hydrogen as the fuel to power truly clean flights. Fortum is well positioned as a partner in this space, given the company’s clean energy focus and its emerging hydrogen leadership.”
According to the press release, the pair will look at removing emissions from flights and the wider airport ecosystem more broadly, exploring the potential development of on-the-ground hydrogen infrastructure at relevant airports.
The collaboration between ZeroAvia and Fortum creates a fertile ground for the challenges surrounding scalability to be worked through, hopefully producing advances in the hydrogen-electric space and pushing the industry closer to a sustainable future.
Korean Air harnesses Korean culture on a global scale with YG Entertainment agreement
Last week, Korean Air and YG Entertainment (YG) announced they signed an agreement to promote Korean culture globally.
The press release described the agreement as “a stepstone in further promoting K-culture and its brand value by leveraging Korean Air’s extensive global network and YG’s role as a pioneer in K-pop culture.”
YG Entertainment is a South Korean multinational entertainment agency operating as a record label, talent agency, music production company, event management and concert production company, and music publishing house.
The airline already embraces and promotes Korean culture onboard with traditional meal options and an expanding in-flight entertainment array which will now include more Korean dramas, entertainment shows, and K-pop.
This in itself is not necessarily a new approach. For years airlines have been translating their local culture into the passenger experience. For example, Eithad Airways designed amenity kits based on designs use on traditional blankets, cushions, and Bedouin tents in the United Arab Emirates. Additionally, Malaysia Airlines crafted their inflight experience blending traditional musical instruments to “offer a taste of Malaysia.” Yin May Lau, Group Chief Marketing and Customer Experience Officer, Malaysia Airlines expands on the influence of Malaysian culture on the airline in this exclusive interview.
However, Korean Air’s collaboration with YG takes this to the next level.
Explaining their collaboration, Kenneth Chang, Korean Air’s CMO said:
“Although the aviation and entertainment sectors have different characteristics, we expect Korean Air’s solid global network and YG’s insight in K-pop content to be leveraged to create synergy.”
Detailed in the announcement was Korean Air’s first step of becoming the official airline sponsor of YG artist Blackpink’s world tour, providing discounted plane tickets and waiving additional baggage fees for artists and staff part of the tour for limited time. YG will in turn provide concert tickets, signed CDs and posters for Korean Air’s SKYPASS members and Korean Air passengers will enjoy a special welcome message by Blackpink on board.
The symbiotic collaboration between the airline and YG to promote Korean culture should help Korean Air to expand their recognition on the global stage, and enhance the airline’s brand.
Interview with Dr. Kerem Kızıltunç, CIO Turkish Airlines – Technology and the aviation industry
This 15-minute interview with Dr. Kerem Kızıltunç, CIO Turkish Airlines and General Manager of Turkish Airlines Technology, covers a wide range of topics varying from the most promising use cases of generative AI to the redesigning of Turkish Airlines’ tech infrastructure to support digital transformation.
Towards the end of the conversation, the CIO selected several of the top technology trends he foresees having the greatest impact on the industry in the coming few years highlighting payments, AI, connectivity, mobile, and more as areas to watch in the near future.
Could you pick out the three most important investments to prioritise this year?
How are you redesigning your tech infrastructure to support Turkish Airlines’ digital transformation?
Can you outline some of the most exciting use cases of generative AI like ChatGPT across the industry?
How are Turkish Airlines transforming their retail offering?
Can you identify the top technology trends that you think will make the biggest impact on the industry within the next three years?
Interview with Ho Hoong Mau, Regional Director, APAC Sales, Plusgrade, and Paul Carroll, Group Chief Revenue and Network Officer, AirAsia
At Aviation Festival Asia in Singapore, AirAsia and Plusgrade announced their expansive multi-year and multi-product partnership. This will give AirAsia customers the opportunity to bid for upgrades and reserve extra seating space for travellers.
The collaboration between the ancillary revenue solutions provider and Asia’s leading low-cost carrier develops the airline’s ancillary revenue and expands Plusgrade’s presence in the APAC region.
To learn more about the partnership and its wider significance, watch this short five-minute interview.
How will this partnership between Plusgrade and AirAsia enhance the overall customer experience of airline travelers? Is this going to be available for all the AirAsia brands including Thai AirAsia X, AirAsia Indonesia, AirAsia Philippines etc?
Can you expand on this interesting opportunity that customers are enabled with to bid for more premium service offerings on flights?
How will this complement AirAsia’s overall ancillary revenue strategy? Flatbeds and hotbeds for bidding are obviously great offerings; will there be other collaborations with Plusgrade in the future (like speedpass etc)?
How do you think this partnership aligns with Plusgrade’s strategic direction? And will this partnership lead to future ventures with AirAsia?
As a leader in the ancillary revenue and commercial travel industry, how do you think this partnership and venture will shape the outlook of the industry in the near and medium term?
Interview with Sumesh Patel, APAC President, SITA – Megatrends, collaboration, and Gen Z
Sumesh Patel is responsible for developing and driving the strategic direction of SITA in the Asia Pacific region.
In this five-minute interview, Sumesh highlights the ways the pandemic has transformed the industry for the better, how passenger needs are changing, and the evolving relationship between key industry stakeholders. SITA’s APAC President also discusses megatrends for the the next 2-3 years, picking out a few key shifts to be mindful of as the industry advances.
What has been the most exciting development in the industry’s digital transformation journey so far?
How do you think the pandemic changed the relationship between various industry stakeholders?
As the APAC region resumes international travel, what is one key lesson learned from the last few years that we must take forward?
What are the megatrends that you expect to impact the industry in the next 2-3 years?
SITA and Lufthansa address the industry’s $2.2 billion pain point with the automation of reflighting of baggage
Mishandled baggage causes huge inconvenience for passengers, tainting their perception of the journey and causing unnecessary stress. It is also detrimental to the aviation industry more broadly, costing $2.2 billion in 2022 with over 4 million bags mishandled during transfer.
According to a recent press release, SITA estimates that widespread automation of reflighting baggage could save the industry $30 million a year. On 15th March, the IT provider and Lufthansa announced they are pairing up to address this industry pain point by automating bag reflight operations.
Sergio Colella, SITA President for Europe said:
“SITA’s automated baggage reflighting solution is built on the back of past successful co-innovations with Lufthansa and meets a critical industry baggage management requirement as we see the return to the skies. Our aim to make sure that when a bag is mishandled, it is reunited with its owner as soon and simply as possible.”
SITA’s WorldTracer Auto Reflight digitises the process of reflighting baggage, reducing the need for human intervention and minimizing cost on the operations side. It automatically suggests suitable flight routing for the bags and the original bag tag is used, updating the baggage system with the new bag routing. Also addressing the passenger experience aspect, the solution proactively notifies passengers of any delay with their baggage and collects delivery details allowing passengers to bypass the baggage hall entirely.
The solution uses automation to address operational costs as well as the passenger experience, transforming this costly industry pain point.
Interview with Mandy Ng, CEO of HK Express – The benefits of digitisation
In this five-minute interview, Mandy Ng, CEO of HK Express pointed towards digitisation as a priority for the airline. Throughout the conversation, Mandy outlined the ways a strong digital approach underpins success across a multitude of areas for HK Express. This includes keeping customers engaged by responding to post-pandemic expectations, improving efficiency across the board, unlocking the agility required from LCCs, and more.
The HK Express CEO also elaborates on how ramping up digital strategy has helped while the region re-emerges from the pandemic and discusses the improvements in conversion rates as a consequence of upgrading the airline’s mobile app.
How is the current macro economic climate impacting bookings and yields?
What are the challenges of scaling back up as the industry re-emerges in this region?
How much of a priority is your digital strategy and what impact does that have on the passenger experience?
United Airlines invests $5 million in algae biofuel company. Which SAF problem does this address?
United Airlines has made a $5 million investment in Viridos, a leading algae biofuel company working to produce sustainable, low-carbon, algae-based jet fuel at a commercially deployable level. Compared to traditional jet fuel, sustainable aviation fuel (SAF) produced from Viridos algae oil is expected to have a reduced carbon footprint of 70 per cent making it an effective, more environmentally conscious alternative.
The investment was made by the United Airlines Ventures (UAV) Sustainable Flight Fund whose President, Mike Leskinen, said:
“SAF is proven, scalable, and the best tool we have to reduce our carbon emissions from flying, but we face a significant shortage of available feedstock […] Viridos’ algae-based biofuel technology has the potential to help solve our supply problem without the need for farmland or other agricultural resources and marks our inaugural investment in our new cross-industry UAV Sustainable Flight Fund.”
Here, the UAV President outlines a potential paradox between SAF feedstock and environmental priorities.
As aviation attempts to mediate its impact on the planet, availability of SAF becomes crucial. IATA estimates that SAF could contribute to 65 per cent of the reduction in emissions needed to reach net-zero by 2050. Furthermore, the World Economic Forum’s Clean Skies for Tomorrow Coalition aims for the industry to run on 10 per cent SAF by 2030, up from 0.1 per cent in 2021. To meet these demands, there must be a significant increase in production. However, it is important this rapid scaling up does not have a detrimental knock on effect at feedstock level.
Currently, a few of the key resources used to produce SAF are used cooking oil, municipal waste, and waste animal fat. As noted by BloombergNEF, “about 6 million metric tons of used cooking oil and 27 million metric tons of animal fats are traded globally every year, which would cover only around 5 per cent of jet fuel consumption.” To meet the quantities required for the industry to significantly reduce its impact, considerably more feedstock will be required. However, as quoted in a recent article in the Wall Street Journal:
“You can’t just increase everybody’s consumption of french fries because we decided we need to double the amount of used cooking oil.” – BloombergNEF’s Ms. Davies
As SAF plays a substantial role in the industry’s reduction of its environmental impact, the origins of the feedstock must be kept in mind.
Discussing their process, Oliver Fetzer, CEO of Viridos said:
“By establishing production sites to grow Viridos-engineered microalgae in saltwater, we are creating the foundation for a biofuel future that moves away from fossil fuels without competing for precious resources such as fresh water and arable land.”
Viridos algae is grown in vessels containing seawater, allowing “contained deployment in hot and dry locations without taxing scarce freshwater and arable land resources, while eliminating runoff.” The algae also has high surface area oil productivities allowing for a high output in comparatively small areas. Moreover, through bioengineering microalgae, oil productivity compared to wild algae can be improved seven fold making it efficient.
As demand for SAF rises, it is crucial that the nuances around the feedstocks used are kept in mind.
Amadeus and Microsoft’s report ‘Delivering Traveller Value’ restates the potential of data
Last week, Amadeus and Microsoft published a co-authored a whitepaper exploring ‘how new technologies will make the experience of travel better.’ The report broadly explores how an understanding of the ‘purpose’ and ‘context’ of each trip would unlock value for the travel industry whilst greatly improving the experience for each passenger.
One facet of the report explores the central role of data in achieving the next stage of the sector’s evolution. The paper stated “the industry will not be able to move forward without more effective usage of data.” One such improvement, the whitepaper advocates, is a more collaborative approach across the entire passenger journey.
“Too often different stakeholders – airlines, hotels, agents, and ground transportation cannot share what they know about travellers’ preferences. Data is siloed, both within organisations and across the industry. If a plane is late arriving, a hotel may not be aware, or a transfer may depart without the delayed traveller. This will have to fundamentally change if the industry is to realize the maximum potential of each trip.”
Importantly, the paper stresses the need to dismantle these siloes, navigating a path by which insights can be shared.
Wolfgang Krips, Senior Vice President, Corporate Strategy, at Amadeus said:
“When a person travels, they go through several channels, generating data each time. Our goal is to create a link between each of these data pools and to allow our customers to extract relevant analysis, ensuring compliance at all times with applicable legislation and the highest security standards.”
This has the potential to transform the service the industry can provide passengers, creating a seamless and personalised experience whilst establishing new revenue streams. Through a collaborative approach to data, the passenger journey can be transformed, reducing friction and unlocking new possibilities.
Emirates airlines introduce a check-in robot announcing “we’ll be taking it to a step higher”
Last week, Emirates airlines, one of two flag carriers of the United Arab Emirates (UAE) announced it is set to introduce over 200 multilingual robots to improve check-in services for their passengers. These check-in robots are AI-enabled and will help the airline to efficiently process high levels of passengers, avoiding bottlenecks at the airport with the user-friendly, guided machines.
Adel Al Redha, Emirates’ Chief Operating Officer said:
“We are the first airline globally that has introduced or plans to introduce portable check-in robotics. We will be the first one to use a robot that can complete all check-in processes, including issuing a boarding pass that will be sent to your registered number or email, and facial recognition by scanning your passport. […] You will go through the passport control and then go through the gates or the lounges without having to show you documentation again.”
Emirates’ check-in robot on display at the airline’s aviation innovation event ForsaTEK. Image credit: Deena Kamel / The National
Offering assistance in a minimum of six different languages, the technology is just one product of Emirates’ investment in tech and innovation. This AI-enabled technology will facilitate a seamless experience for passengers, but this is only the beginning.
Emirates’ COO explained:
“We will be improving it and taking it to a higher level where it will be able to link with immigration to establish whether you have the right permission to enter the country, whether you have got the right visa, give you a hotel booking confirmation, or book a hotel.”
Rolling out initially at Terminal 3 of Dubai International Airport, the first robots will be seen in the next few months and will increase in number over the coming years.
The Travel in Motion and Oystin teams attended Aviation Festival Asia this week. We had the opportunity to catch up with industry colleagues in warmer climates, and the opportunity to taste some fantastic local dishes too! Though there was one experience that we rarely get to trial at home in Europe: the super app.
Super apps are prominent here in Southeast Asia and China. They offer a wide range of financial instruments and online-to-offline services such as food delivery, package delivery and transportation. These super apps position themselves in their user’s daily life and create a marketplace around just about anything. The apps are typically connecting buyers with suppliers that, until now, may not have had a digital presence, for example taxi drivers, takeaway houses, and laundrettes.
The super apps have the similar measures for success: user acquisition and retention. It’s all about user activity (and accompanying revenue, of course). They prioritise having access to the right content overlaid with making a customer’s shopping, booking and fulfilment experience excellent. In doing so they increase their share of sales with the supplier, putting them in a superior distribution position. For some services they even set the price, for example with ride hailing.
Customers who find something easy to use return time and time again, often no longer giving the competitors a second look. The super apps are a snowball, the value users place in their brands are increasing and the more daily users they acquire, the easier it is to launch a successful new service.
Airlines too have capitalised on their well-known brand to become part of a user’s daily life, albeit in a different way – the loyalty programme partnership. Your wallet may contain a credit card with an airline logo, your supermarket may advertise the opportunity to earn points and whilst you top up fuel for your car, you may also be topping up your air miles account too.
Whilst airlines are striving to become better retailers, a super app is an extreme form and its value versus cost is unproven. Here are some questions to consider before going down this path:
“Is it a feasible proposition for an airline to execute on? Would it lead to positive daily experiences with its brand or lead to negative brand impact?”,
“Why would consumers choose an airline over Grab, Uber, WeChat etc…?”,
“Should an airline offer these additional services and become a more integral part of users’ daily lives?”,
“Does the current loyalty play, where airlines partner with everyday brands, already go far enough to build brand loyalty and affinity to the airline?”, and
“Would it lead to consumers valuing the airline brand so much that they don’t shop for flights elsewhere?”
Super apps are built on a deep motivation for excellent user experience, consistency, and commercial policies which promote an ease of doing business. To meet these expectations, super apps have modern, fast, and scalable systems.
One question that arises is whether super apps pose a risk to an airline’s distribution and commercial strategies, could a super app change the airline market in the same way it did for ride hailing. Very few super apps offer public transportation services today. Air Asia’s super app does sell flights and hotels. However, it is powered by an online travel agency (OTA) so the experience is limited to what the OTA can provide, which in turn is often limited by the functionality of the airline. Uber has recently launched trains and coaches on its app and has shown an intent to sell flights too. However, they obtain their content, they are likely to face the same issues as Air Asia, the experience they can provide is limited to what the airline’s capabilities are.
So, should an airline enter this space too? Are they at risk of missing out? Airlines have a lot of competing priorities to contend with, such as their own financial stability as they recover from the COVID-era. Purists may argue that airlines should focus on efficient, safe, and enjoyable transportation. Others within the airlines are focused on a diversification of income streams by leveraging the airline brand. An example of where this has been successful is the airline loyalty business units. They were able to raise funds during COVID, which for some airlines provided a significant lifeline.
Travel in Motion’s (TiM) opinion is that running a consistent experience across multiple services is not for the faint-hearted. This takes considerable focus to get it right, and that will lead to less attention on the airline’s core business. However, we do believe airlines still can learn a lot from the super app experience to guide their own digital offering. Offering relevant and personalised offers, easy-to-use booking systems and a well-designed digital experience to accompany the physical travel journey is extremely valuable to a growing segment of customers.
Airlines have already started down this path by pursuing modern offer and order management systems, a key enabler to meeting the modern customer’s expectation. Those systems could help airlines become a super app. However, we at TiM believe there are many areas airlines will choose to improve once they have a modern technology stack. In doing so they will strive to improve customer satisfaction, revenue, and de- risk being commoditised.
In the meantime, whether you are attended Aviation Festival Asia or not, consider downloading a super app and experience what your customers are experiencing on a daily basis.
AirAsia and Plusgrade Announce Partnership to Enable Bid for Upgrades and Extra Seating Space for Travelers
PRESS RELEASE: Montreal – Tuesday, February 28th, 2023
Expansive multi-year and multi-product Plusgrade and AirAsia partnership announced at Aviation Festival Asia in Singapore
AirAsia guests will soon have the opportunity to bid for upgrades and reserve empty seats beside them on flights
This is a significant partnership for Plusgrade as they continue to expand their footprint in the APAC region
Plusgrade, the leading provider of ancillary revenue solutions for the global travel industry, is proud to announce its partnership with AirAsia, Asia’s leading low-cost carrier. This extensive partnership will soon allow AirAsia customers to bid for upgrades and reserve the seat(s) beside them for extra space and comfort. The deal was unveiled today in Singapore at Aviation Festival Asia, the largest aviation tech event in Asia.
With the relaxation of the remaining travel restrictions in the Asia-Pacific region in early 2023, travel industry recovery is well underway. Ancillary services that delight customers and drive revenue will be an essential tool for airline, hotel and rail companies as travel returns to – or even exceeds – pre-pandemic levels. Today’s travellers are looking for streamlined travel experiences with a focus on comfort and innovative services to improve their journeys.
For consumers, ancillary services such as upgrades or the ability to reserve open seats beside them on their flight can make travel more enjoyable, giving them room to stretch out and relax, or enabling them to experience premium products and services that might otherwise be out of reach.
“We are thrilled to join forces with AirAsia to support them in driving meaningful ancillary revenue through incredible traveler experiences,” said Plusgrade CEO, Ken Harris. “We look forward to supporting AirAsia as they continue to innovate and develop new products and services for their customers, and to expanding our footprint in the thriving APAC region.”
Ms Karen Chan, Group Chief Commercial Officer at AirAsia added: “This collaboration will enable us to offer more passengers the chance to access our premium products and services, such as our award winning premium flatbeds or hot seats with extra legroom. We are confident that our guests will love this innovative and seamless way to enhance their travel experience.”
AirAsia is the World’s Best Low Cost Airline, flying to more than 130 destinations in the region and beyond. Founded in 2001, the airline has flown close to a billion passengers. With the resume of travel worldwide, AirAsia has gradually reinstated flights for many of its popular routes whilst launching new ones. AirAsia’s vision and mission have always been to serve the underserved. Throughout its two decades of service, the airline has connected people and places, and has largely been credited for democratising affordable air travel in the region with its now famous tagline ‘Now Everyone Can Fly’’.
Plusgrade powers the global travel industry with its portfolio of leading ancillary revenue solutions. Over 200 airline, hospitality, cruise, passenger rail, and financial services companies trust Plusgrade to create new, meaningful revenue streams through incredible customer experiences. As an ancillary revenue powerhouse, Plusgrade has generated billions of dollars in new revenue opportunities across its platform for its partners, while creating enhanced travel experiences for millions of their passengers and guests. Plusgrade was founded in 2009 with headquarters in Montreal and has offices around the world.
Letsfly Co-founder – 3 Key Elements For Airlines & Retailers To Improve Distribution Strategies
The travel & airline industry always undergoes a rapidly changing commercial landscape. Understanding how to navigate it is a key component of success.
One of the biggest challenges airlines face is the shifting dynamics between carriers and their distribution partners. Could this be a sign of fragmentation for airline distribution? If so, then could there be signs of reaggregation emerging on the horizon?
GDS to NDC and Direct API
GDS has historically dominated the distribution market, and airlines must seek flexible and cost-effective distribution solutions and other alternatives. As a result, Next Generation Distribution Solutions (NDC, Direct API) surged in popularity as they offered more agile adoption methods.
However, there are still critical aspects that require special attention, and airlines and retailers must first know how to analyze them, before defining their approach. And that begins by looking beyond the traditional solutions, and preparing for success by knowing how to effectively adopt a New Distribution Solution.
How to prepare for success with a New Distribution Solution
Kelvin Fu, Co-founder of Letsfly (a provider of high-quality content so airlines and travel organizations lower distribution costs and reach new markets), believes that the New Distribution Solution model presents both challenges and opportunities. Which is why he states that it’s important for airlines and retailers to first understand three key aspects to prioritize their efforts.
The 3 critical elements airlines and retailers must prioritize
How to cover more markets at lower costs for airlines
How to support the sales of diversified products more flexibly, such as ancillaries and bundles
How to ensure a satisfactory ticket purchase and post-sales service experience for travelers under the New Distribution Solution
To achieve success, companies need to focus on important areas such as expanding market coverage while reducing costs, supporting the sales of diversified products like ancillaries and bundles, ensuring a seamless customer experience throughout the ticket purchasing process and post-sales services, and assessing technical performance and effectiveness.
According to Kelvin Fu, Co-founder, Letsfly:
“It’s crucial to have a distributor with extensive and quick market coverage, who can establish direct API connections, and handles the entire case, this especially means post-service. Only in this way will distribution strategies be optimized in the New Distribution Solution model”
How to solve the 3 critical key elements:
Ensure your distributor has extensive and quick market coverage.
Reduce third-party process, build direct API connection with distributors.
Partner with a distributor that provides end-to-end solutions to your case.
By focusing on these key aspects and collaborating with distribution partners – airlines and retailers can be in a position to adapt in this rapidly changing landscape. Through this, they optimize their distribution strategies and provide a better overall experience for their customers.
“It is essential to pay attention to issues such as market coverage, product diversification, customer experience, and technical performance to succeed in a rapidly changing market. By doing so, airlines and retailers can benefit from greater efficiency, cost savings, and customer satisfaction.” – Kelvin Fu, Co-founder, Letsfly.
New Distribution Solutions have been around for some time, but airlines always need to adapt to changing consumer preferences and seek to diversify their product offerings. As a result, more airlines have been adopting lightweight and flexible distribution methods, moving away from the traditional GDS model. While this trend was initially led by low-cost carriers looking to save costs, it has evolved into a more fragmented market.
Flexible, Adaptable, and Tailored Solutions
To tackle this issue, Letsfly offers tailored solutions that are more flexible and adaptable. The goal is to offer airlines and retailers a distribution solution that helps expand market coverage while keeping costs low, support the sales of diversified products, ensure satisfactory customer experiences, and improve technical performance.
“New innovations will continue to emerge and disrupt the industry, as more companies are open to adopt these solutions. Those who understand how to navigate this landscape successfully can expect to achieve greater efficiency, cost savings, and customer satisfaction.” – Kelvin Fu, Co-founder, Letsfly.
Collaboration and Customer-Centric Strategies
As with any industry, the travel, aviation and hospitality sector will always continue to evolve, and collaboration with distribution partners is key to success in this ever-changing industry. Airlines and retailers must be open to embrace new technologies and collaborate closely with their distribution partners to achieve success.
Many new companies are emerging to innovate and potentially replace the traditional GDS’s position, and become the new dominant solution. So it is important for airlines and retailers to work together with their distribution partners.
This will help to foster long-lasting relationships with customers in order to remain competitive in an industry that is constantly changing.
In the end, success in the travel industry is all about the customer. By investing in strategies that are customer-centric and tailored to their needs, airlines and retailers can build long-lasting relationships that will keep customers coming back for more.
It won’t be an easy road, but those willing to embrace change, experiment with new approaches, and collaborate with their distribution partners will be the ones that thrive in it.
Letsfly is an innovative company focused on providing high-quality content to travel organizations while helping airlines lower their distribution costs, reach new markets and maximize profit. Its mission is to improve travel distribution with cutting-edge technology and provide long lasting value to its customers. The company was founded in 2014, with headquarters in Beijing (China) and offices in Hong Kong, Sydney, Singapore, and Dublin.
Seamless Air Alliance and GSMA collaborate to “bring mobile roaming to the skies”
This week, it was announced that the Seamless Air Alliance and the GSMA are collaborating to “accelerate the availability of seamless mobile roaming onboard commercial airlines.”
The cooperation between the pair represents a significant step in the journey towards a smooth connectivity experience for passengers, bridging the gap between data roaming in the air and on the ground.
The Seamless Air Alliance was founded by Airbus, Delta, OneWeb, Sprint, and Airtel and drives the development and implementation of Global Standards for Inflight Connectivity. Collaborating with the GSMA, a global organisation unifying the world’s mobile ecosystem, has potential to significantly accelerate the accessibility of seamless mobile roaming onboard commercial airlines.
In the press release, Jack Mandala, CEO of the Seamless Air Alliance said:
“Working with the GSMA positions us in front of over 750 mobile network operators and other service providers, paving the way to open dialogue and cooperation in bringing roaming services to airlines worldwide. The agreement with the GSMA is a ringing validation of our goal to bring seamless connectivity to airlines and their passengers.”
Adding to this, Alex Sinclair, CTO of the GSMA said:
“We’ve come a long way since the first SMS was sent in 1992, but even now there is no guarantee that airline passengers can connect with their contacts on the ground during a flight. Our collaboration with the Seamless Air Alliance will facilitate and accelerate agreements between airlines and MNOs around their own route network to improve connectivity. We are excited to work with members of the Seamless Air Alliance to bring mobile roaming to the skies and deliver the best possible customer experience for airline passengers”
Working together, the pair are aiming to create a scalable framework for establishing commercial roaming agreements between respective members and bring roaming to the world’s airlines.
Takeoff with AI: Five Reasons the Airline Industry Should Embrace AI
Technology is revolutionizing the way that businesses interact with customers, streamlining operations and uncovering new opportunities for growth. Artificial Intelligence (AI) is playing an increasingly important role in the airline industry, allowing businesses to take advantage of a range of benefits that enable them to stay competitive and profitable. By leveraging the power of AI, businesses can gain a competitive edge in the airline industry and identify new opportunities for success.
Here are the top five reasons to use AI in the airline industry:
1. Optimized Operations
Airline companies can optimize network planning, adjust flight schedules, and manage aircraft capacity to maximize efficiency and reduce costs using AI. This can help airlines to better manage fuel consumption and emissions. AI can also be used to automate routine tasks and processes, allowing airlines to focus on more important tasks.
2. Improved Customer Service
AI can provide personalized service to customers, such as recommending travel itineraries and providing real-time information about flight status and delays. AI chatbots can also be used to answer customer queries and resolve issues quickly and efficiently. This can help improve the overall customer experience and increase customer satisfaction.
3. Revenue Optimization
Gathering detailed insights on customer demand is an essential prerequisite to optimize the revenues and margins of the overall network of any airline. As such, solutions that harness the power of AI are a clear competitive advantage for airlines – under the right conditions, they can bring highly accurate forecast capabilities that can be leveraged to make better informed decisions, and ultimately have direct impact on the bottom line both from a revenue and cost perspective.
4. Cost Savings
By leveraging AI-driven automation, airlines can reduce operational costs and increase operational efficiency, leading to a substantial increase in profitability and market competitiveness.
For instance, airlines can automate their inventory management, pricing, and revenue management processes to optimize their operations and reduce the risk of overbooking, which has a high cost per offloaded passenger, not to mention a very poor customer experience. AI algorithms can analyze historical data and current market trends to make real-time pricing decisions, thus reducing manual labor and human errors. This can also lead to increased sales and revenue uplift.
In addition, AI-powered predictive maintenance can help airlines identify potential aircraft malfunctions before they occur, leading to fewer flight cancellations and maintenance costs. AI can also streamline operations, such as baggage handling and check-in, leading to a reduction in staff and labor costs.
By embracing AI, airlines can unlock significant cost savings and gain a competitive edge in the market, making it a worthwhile investment for any airline looking to stay ahead in the industry.
5. Increased Scalability
AI can help airlines scale up their operations quickly and efficiently. This technology can be used to automate customer service inquiries and other processes, streamlining workflow and allowing airlines to focus on more important tasks. Additionally, AI can be used to provide predictive analytics and insights that can help airlines identify potential opportunities and make decisions more quickly and accurately. With the help of AI, airlines can stay ahead of the competition and be up-to-date with the latest trends.
AI has the potential to revolutionize the airline industry. By automating routine tasks, making better decisions, improving customer experience, and optimizing maintenance, AI can help airline companies become more efficient, cost-effective, and competitive.
Hong Kong air passenger traffic thrives with the relaxation of travel restrictions
Airport Authority Hong Kong (AAHK) recently announced the January 2023 air traffic figures for Hong Kong International Airport (HKIA). The numbers speak to a strong recovery following the relaxation of COVID-19 related travel restrictions.
The announcement showed passenger traffic reaching 2.1 million in the first month of 2023, a year-on-year surge of 28 times. Reportedly all passenger segments grew substantially following the relaxation of travel restrictions towards the end of 2022, but the most significant increases were recorded with passengers moving to and from Southeast Asia and Japan.
The Airport Authority added:
Due to the relaxation of travel restrictions, all passenger segments experienced significant growths, particularly Hong Kong residents, compared to the same month last year […] Strong passenger demand was observed in the second half of the month due to the Chinese New Year holiday. The re-opening of the Mainland market to international travel also drove a recovery in passenger traffic between Hong Kong and Mainland China.
The start to a strong recovery is visible in these latest figures with the airport handling over 80,000 passengers daily at its peak last month. This volume of passengers is representative of approximately 40 per cent of pre-pandemic levels. Notably, international passenger flights also increased from 4,427 to 10,665 year-on-year, up 141 per cent.
The figures supplied by AAHK marking a promising start to the new year and bode well for the reopening of the region more broadly.
At Aviation Festival Asia next week a CEO panel will discuss “What is the future of the Asian aviation industry as we come out of the pandemic and how will further digital technology adoption, sustainability, collaboration, and new business models help shape the outlook for 2023 and beyond?” Get your ticket now to be a part of the conversation.