We’re hearing the church bells ringing, the waves of the Mediterranean Sea crashing into one of Europe’s most ancient forts, the smell of pasta is in the air, and the sky has not even one cloud. In case you haven’t guessed it by now, we’re in Malta, one of the smallest countries in the world, with a history that goes back thousands of years, and where new history is being made.
Exploring the island’s roads we’re taken back in time by seeing megaliths older than pyramids or the knights of Malta. But in a country full of ancient history, something really innovative is happening.
Like so many travels in the history of the Mediterranean Sea, embarking on the digital journey can be quite a challenge for many companies, and if we add a pandemic in the process it might seem like an impossible mission. Well, that was not the case for Air Malta. The determination this team has shown to make this digital dream come true was an example of how companies should face the many challenges that come in the way.
We had the pleasure to meet two of the members of this airline, Antoine Vella, Head of Digital Commerce at Air Malta, and Stephen Gauci, Head of Corporate Communications at Air Malta. Both are ready to be part of the change coming to the travel industry.
Can you tell us what this Air Malta project in terms of digital transformation entails?
We come from a legacy background where we were extremely tight down in our technology. We decided to reinvent the way we do digital, with a new website and a new e-commerce platform. We felt we needed to really move forward with our digital and leave the traditional legacy behind. The new way we’re doing things now gives us the flexibility we want from our technology to move quickly and grow faster and reduce our costs of distribution.
What is so special and innovative about the solution you implemented?
It’s modular so we can choose exactly what we want to take, for example just the website or just the e-commerce platform, or the mobile app. Apart from that, there’s also the personalization aspect which is very important. When you have data on your customers you can focus on creating products just for them. The engine will help us to provide the right product at the right time of the customer journey. It’s flexible, so it gives the airline people to change things as they want without having to wait for the traditional release cycle. All these aspects will help Air Malta to grow quickly and since the designs were very clear, UI was very good, it helped us in terms of conversion rate.
That’s amazing. Are you saying that before the digital team from the airline couldn’t just change something as part of the booking process themselves?
It was very limited. They could change some things like text or translations, but they couldn’t change big items because the previous platform was shared among airlines so it couldn’t be customized to a specific airline as much as we wanted to. So, if we wanted to introduce a new product it could take months because we had to follow a release plan and wait to see if that product would also make sense for the other airlines attached to this platform.
What does it mean for Air Malta’s customers? What’s different for them now?
The products are now clearly displayed, the way the customer flows from one page to another page is more user-friendly, so they see their flights first then they can move to select extras. These things are not constantly showing to customers so everything is well displayed. That improves conversion because there is no opportunity for the customer to get lost in the product offer. Everything is clearer.
You said you saw the results in conversion quite fast.
Yes, after two weeks. We went live in August and each month the results were better. We have more sales, better conversion rates, and more revenue.
I assume you compared it with the pre-covid time, so it was not just the peak season.
Yes, it was not just because of the peak season. The results were visible immediately after we launched the platform.
How long did it take to launch the platform?
We started working with the technology, in January 2021, and we went live in August. We’re talking about seven or eight months to implement a new website and a new booking engine. In my opinion, that’s extremely fast.
Yes, it’s fast. Particularly, if we consider that Air Malta faces all the complexity of connecting flights or interlining.
And we’re not just selling Air Malta-operated flights. We have to consider ancillaries like bags, seats, sports equipment, fast track. All of these were incorporated in the booking engine. We have the website operating in seven different languages so it’s quite complex. Being able to do this in just eight months is quite an achievement.
There must have been some problems as well. What were the problems and did you manage to solve them?
Problems were mainly related to APIs and getting the right information based on our PSS APIs. We had some issues, but with the Brachspace team, we were able to fix them quickly. Seeing the two teams working together was really important to see the results and get things working.
Air Malta has a big team in digital, it requires people with the right know-how and experience, right?
Definitely. In terms of the number of resources in Air Malta I would say we were a small team, but everyone was super immersed in building this project, and we had good support from the developing team and of course the Branchspace team.
So, collaboration is key.
Yes, collaboration was key. There was never a team trying to take over the other one so to have a clear synergy between teams is really important. The whole project was handled like a big family project so that’s nice.
This was more like a partnership than just a supplier-vendor deal.
It was much more. It was a big team.
That’s what makes this even more amazing. I understand you started this project amid covid so the team couldn’t really meet personally.
Yes, all the preparation was done online.
And now it was the first time that the Branchspace team could come to Malta and meet everyone personally.
To think about a project of this size, you’d think we need to meet personally, but we managed to do it successfully without any physical meeting.
And there must have been a lot of trust in the process.
Trust was very important. It was a very transparent project and everyone stuck to their timelines. That’s how we managed to deliver it on time.
Is there anything you would do differently if you had to start again?
Maybe invest in more resources for Air Malta. I think that would have allowed us to do more. And maybe the physical aspect of being able to meet would also have helped.
There are innovative things still coming up, some game-changing areas, what is happening?
One of the things is our mobile app. It will be the very first mobile app for the airline so it’s important for us. This will help not just with sales, but also so customers can have all the necessary information in their hands. Another thing is the loyalty program. For the first time, customers will be able to redeem points online. This can grow to other areas outside Air Malta and build a community in the country. That’s our vision.
That’s quite unique and that’s what customers are looking for.
We want customers to earn points not just by special travel dates or classes, we want to move away from the old manual process.
So this program will be applied in a much wider area, not just flying.
Exactly. We’re talking about restaurants, hotels, coffee shops, supermarkets maybe even car rentals. The more options the customer has to spend these points the better it will be for the airline.
It’s a lot of good customer-centric initiatives.
We’re trying to become more customer-focused in our approach. And through every channel not just digitally. Our focus should be the customer because, ultimately, we’re here to serve the customer. We need to provide a good service and the technology to serve that purpose.
It can make a difference to your competition. It must be great for you Stephen to be able to communicate about the project. It is a journey so over time there are so many new things happening.
Definitely. We’re having positive news and news that benefits the customers. The website has been having a great impact on the customers which ultimately will benefit the airline with loyalty and repeat visitors.
How did the cooperation in other areas work? There are elements linked to this project like loyalty, distribution, strategy…
It was very important from day one that there was internal alignment between all departments. Everyone knew what the end result was, so all were working in the same direction. Even though it was difficult with covid, the project brought the employees together, so it wasn’t just a digital department success, it was an Air Malta success.
I’ve been in contact with the chairman, David Curmi, and he said this is the beginning of your digital transformation journey. So, it’s a very important element.
It’s one of the most important parts for the airline in terms of how it should grow and how quickly. Digital is really important.
Looking back to January 2021 and now May 2022, in one word, what comes to your mind about the project?
Exciting. It had so many new things and it was happening so fast that sometimes we don’t even have time to process it all. So, that was very exciting.
In a famous interview in 1995, Bill Gates explained the Internet to Dave Letterman, the host of a TV show. Letterman argued that he could listen to the news on the radio and wasn’t sure why would someone need the Internet. Today, we can listen to the radio on the Internet.
As the metaverse is getting a lot of attention, including in a recent article by Johnny Thorsen, many are wondering if it’s another technology looking for problems to solve, if it’s going to be more successful than Second Life (the first attempt at a virtual world) and if it may have an impact on air travel (you can’t fly virtually, can you?).
Let’s understand first what the metaverse entails then let’s have a look into the current trials and a longer look into the future.
What is the metaverse? How does it relate to Web3?
My personal understanding of the metaverse is a term that covers computer-generated virtual worlds and the tools to navigate them. As such it is more than AR/VR tools, it is really a graphical interface layer on top of the internet, pioneered by developers of video games such as Minecraft and Fortnite.
In a related space, Web3 is the blockchain-based iteration of the Web, which was built originally on the internet. If you consider blockchain as a secured and decentralized evolution of the internet, designed to handle digital assets or tokens, your navigation layer is called Web3.
If you mix the two concepts – metaverse and Web3, you can visit a virtual world and handle digital assets in this virtual world. By digital assets I mean virtual properties, virtual currencies and other virtual goodies. Following this simplistic presentation of the new concepts, where is the link to physical travel and tourism?
Current air travel initiatives with the metaverse
The most recent example of current initiative is the airline Vueling that announced testing the metaverse to support customers will trip planning and to sell (real) tickets. They partnered with NextEarth, a platform in the metaverse, and Iomob, a mobility platform helping with the integration.
Another example is Qatar Airways presenting a virtual cabin crew, inspired by the avatars in the virtual world. This initiative focuses on giving the customers a taste of the inflight experience.
More airlines are exploring the technology based on their priorities: trip planning, product review, etc. Looking at the current initiatives gives us a hint to the future: the metaverse will be a new sales channel for travel and tourism, including air travel – like the internet enabled 25 years ago online sales, and 10 years later mobile phones enable mobile sales. Get ready for “meta sales”!
Looking into the future
The future of “meta sales” is two-fold: 1) reaching customers where they are and 2) showing the product to the customers.
As hundreds of millions of customers spend time in the virtual worlds they will come across people and brands, including travel and tourism brands.
In the case of a virtual world that represents the real world – like a digital twin of our world, think Google maps or Google Earth – the navigation in this world will lead to the digital twin of a hotel or of an airport. Airlines may want to offer a visit of their aircraft.
It is difficult to predict how long it will take before we feel that it is normal to pay a virtual visit to a hotel and to an airline before making a purchase, like it is normal today to visit their website.
This exploration of the metaverse may seem to be a stretch as some airlines still need to fix the basic features of their mobile app. History shows us that new technologies don’t wait for everyone to master the old ones.
Most people and companies will probably adopt a “wait & see” attitude, while watching the pioneers who experiment and commenting from the side lines. As we’ve seen above, some players have already adopted the “test & learn” attitude. Indeed, the best way to predict the future is to build it.
The Changi Airport Group, which manages Singapore’s Changi Airport, has announced a phased re-opening of the refreshed and updated Terminal 2 beginning May 29. Biometric identity will help expedite passenger processing at this terminal as Changi Airport prepares for increased passenger traffic in the coming months.
Changi’s T2 closed for upgrading work in May 2020, taking advantage of a reduction in passenger numbers due to the COVID-19 pandemic. The upgrades are ongoing, with a planned completion date of 2024. When work is finished, the upgraded terminal is expected to handle five million more passengers than it did before the project began. This increase would put the terminal’s capacity at 28 million passenger movements per year.
The first phase of T2’s progressive re-opening addresses the needs of peak-hour travel for airlines operating in Terminal 3. It adds capacity for critical touchpoints, including arrival immigration, baggage claim belts, and contact gates at the southern wing of the terminal. A few flights will depart from boarding gates at T2, though passengers will still check-in and clear departure immigration at T3 during this phase of the reopening.
Mr Tan Lye Teck, CAG’s Executive Vice President of Airport Management, said of the reopening, “CAG is encouraged to see the strong pickup in travel demand and has worked closely with our partners to bring forward the progressive reopening of T2 ahead of the June travel peak to meet this demand. The start of flight operations at T2 will provide more capacity to support our airline partners, who are also gearing up to serve more passengers in the months ahead. T2 will reopen in phases over the next two years to support Changi’s recovery as a regional air hub.”
Biometric automation at immigration
One of the expanded T2 features will be a larger Arrival Immigration Hall. It will rely on automated immigration lanes and wider special assistance lanes to speed up passenger processing. The automated immigration lanes will be available to Singaporeans and residents who have enrolled their iris and facial biometrics with the Immigration and Checkpoints Authority (ICA). Eligible foreign visitors who have registered their biometrics on arrival in Singapore can also access these lanes.
Singapore’s ICA has embraced biometric ID, introducing the Multi-Modal Biometrics System (MMBS), which captures iris, facial and/or fingerprints of arriving and departing travellers at ICA passenger halls. ICA also has plans to make biometric identification available to foreign travellers who may visit Singapore often and prefer the speed and convenience by allowing them to register for Biometric ID for future trips. The Straits Times reports separately that the ICA intends automated clearance to be the norm for all travellers to Singapore beginning next year, 2023. The automating of these processes also supports pandemic containment, reducing the number of interpersonal contact points throughout the journey.
73% of passengers are willing to share their biometric data to improve airport processes (up from 46% in 2019).
51% would be willing to share their biometric data with partners, including hotels and car rental companies, if it helps facilitate their onward journey.
36% have experienced using biometric data when travelling.
86% of those who have used biometric data to travel were satisfied with the experience.
And the immigration process accounts for two of the top three touchpoints where passengers welcome the ease of biometric identity:
51% Entry Immigration
47% Exit Immigration
34% Security check
Airports have been investing in IT to support greater automation of the journey, with biometrics playing an essential role in that. SITA’s IT Trends report reveals:
84% of airports will invest in self-service processes.
83% of airports will implement touchless solutions for passengers and staff.
Nearly three-quarters of airports are also investing in biometric ID management solutions for passengers (74%), with 45% of those planning significant programs and 29% conducting R&D programs.
As SITA reports, “Investment in solutions for passenger identity management have increased in 2021, with several areas seeing growing implementation.” SITA says biometric identity will support several passenger processes beyond border control.
Self-check-in remains a key aspect of identity management solutions, with over half of airports (59%) in 2021 having implemented this (up from 46% last year).
A further 23% plan to implement self-check-in by 2024. Self bag-drop also remains critical, with 46% having invested (up from 35% last year) and a further 32% planning to do so.
Airport security (up from 28% to 40%) and enrolment at the airport (up from 20% to 29%) have seen growth in the past year.
For future investment, the focus is on departure and boarding gates.
27% of airports have implemented automated border gates at departure using biometrics and travel documents, but 64% plan to have these implemented by 2024.
24% have implemented self-boarding gates using biometrics only, but 62% plan to by 2024.
Over the next three years, 38% of airports plan to implement a secure, single biometric token for all touchpoints, though this is only implemented in 3% of airports today.
Is this the dawning of the age of passport-less travel?
Big hullabaloos made over the colour of passport books may be a thing of the past sooner than we might have imagined. As biometric identity becomes the norm, these paper documents could go the way of the dodo.
While the universal deployment of biometric identification is a welcome concept in the travel space, some issues with the technology will still need to be ironed out before we leap forward. Addressing data security, privacy controls, restricted access to biometric databases, and eliminating false-positive/false-negative results are only a few of these issues. There are ethical concerns, particularly in terms of the broader application of biometric data in commercial spaces. What is the risk of our biometric identifiers being sold or traded between companies and for consumer profiling? It is far greater than zero.
Singapore’s broad adoption of biometric identity, and similar programs advancing elsewhere in the world, could mean at least some of us will get to experience a journey right out of what has been, up to now, merely speculative fiction.
When low-cost carriers designed their business models to simplify their business and reduce costs, they went ticketless. But why do legacy network carriers need tickets (now e-tickets) after all? Will they still need to issue tickets to customers who accepted their NDC offers? What are the steps for airlines to move to Order management?
Would we invent airline tickets today?
If you ask the question “what is an airline ticket, and can airline live without tickets?” pundits may argue that it is critical to many airline processes (which is correct), and it makes no sense to get rid of tickets. But if you ask the question differently “if we invented network airlines today, would we invent tickets?”, the answer will certainly be different.
In today’s world, network carriers are selling through travel agencies and through airline partners, they are operating at shared airports, and they are doing business like retailers, making offers to customers and delivering their orders. Indeed, they don’t need to issue tickets. Being ticketless and moving to orders is a goal shared by other modes of transport, like railways.
In September 2016 IATA published a report that studied the transition to order management, meaning retiring tickets from all airline processes and replacing them by orders. The report was drafted by Travel in Motion, on behalf of IATA’s airline distribution standards team. What are the key questions for the transition?
1 – Cost benefit analysis
The customers benefit from order management because they can easily create their own order and modify it before or during the trip. The airlines benefit from the increase in ancillary revenue, including for interline flights, and from the reduction in costs related to customer servicing and IT systems. Of course each airline has a different mix of customers and product offering, which will influence their analysis of the costs and benefits of order management.
2 – Impact on stakeholders
The report explores the vast impact on stakeholders of such a transition. Within each airline, customer service will access orders, ground and inflight staff will deliver orders, revenue accounting will process and settle orders, reservations will create and modify orders, digital channels will display orders, sales teams will notice the satisfaction of customers, revenue management will create offers than can be fulfilled in orders. Outside of airlines, interline partners, travel sellers, ground handlers, and payment providers will handle orders and benefit from them.
The PNRgov message containing Advanced Passenger Information, sent by airlines to governments prior the flights, will be based on Orders instead of PNRs.
3 – End state Architecture
The report recommends an architecture based on an “Offer and an Order management system” that support sales channels and rely on internal delivery and accounting systems. This architecture is free from any legacy record or message, such as PNR, E-ticket and EMD.
The alternatives include the “encapsulate” option, where the legacy records and message are encapsulated into orders, and the “on-top” option, where the core functions remain in the PSS and the new management functions are built “on-top” of the PSS.
4 – Approaches to transition
The report recommends the “staged” approach, as opposed to the “shadow” or “big bang” approaches. Indeed the approach that takes place in phases or stages help minimize risks. The steps can be defined by channel or by product or by function, which progressively cutover from the PSS to the new Order Management System.
Each airline may start the transition with a different configuration, either a PSS and a website, or already a merchandizing platform creating offers and an NDC API distributing offers. Each airline may have a different end state architecture in mind, which generates as many possible transition paths.
5 – The right transition
The report argues that different profiles of airlines may choose different paths, which find the best compromise for them. At a high-level, the three airline profiles are network airline, hybrid airline or low-cost airline, and within those profiles there are innovative or follower airlines. The decision criteria include cost/benefit, architecture, transition approach, impacts and risks.
In summary, the air travel industry has moved from asking “if” to “when” to “how” the transition will take place. In the “how”, the 5 questions to ask are: What are the costs and benefits? What is the impact on stakeholders? What is the end state architecture? What are the possible transition paths? Which transition is right for my airline?
The airlines which will get this transition right will be the first to deliver a smoother travel experience to their customers.
Carriers should look for a software provider with a data-first, cloud-based mentality, which means putting data security front and center. Customers’ security and data privacy should be taken seriously and follow the most stringent SOC 2 cloud-based storage regulations.
Leveraging data as efficiently as possible is essential for airlines to compete in an industry with ever-tightening margins. Airlines entrust their software providers with the use of massive volumes of confidential and proprietary data, and the way that data is treated – with the highest fidelity of data security and privacy – is of utmost importance.
How data is cared for can greatly depend on the local governance rules for the region in which the data is stored. Of course, as a carrier, you want the most stringent rules – without compromise. The best method is to find an experienced provider who can hand-pick specific combinations of data storage locations per airline customer to balance the need for data protection governance against performance and reliability.
How should customer data be protected?
When a software provider receives data, they should maintain full encryption at all times – both in situ and in transit.
There are two aspects to this data encryption strategy. One is protecting the data from the place of origin and destination so that only authorized recipients can access the content. At the same time, recipients can also be assured that the content is created by the senders they trust. Transmission of the data over the internet must be protected with industry-standard encryption so that no one else will be able to eavesdrop on the content.
Customer data should be stored in separate domains so that data is not commingling, never leveraging one customer’s data to use on another’s. Each customer data set must be kept securely in its own protected area, and the data should never be shared with other clients without their permission. There should never be a risk that an airline could give its vendor data and have it fall accidentally into a rival’s hands, for example, through human error.
Managing and protecting data in transit
The other part of the encryption strategy, called data in transit, protects the data when it is being moved from one place to another. In this instance, a software provider will use encryption along the way so there cannot be any eavesdropping on the line, for example. This ensures end-to-end encryption with the data at rest and data in transit. Nobody can eavesdrop on it and then pick up what the content is until it reaches a place within the provider’s four walls. Then it is decrypted and processed internally.
But not every airline software provider follows this stringent method of data protection. Many solutions are actually held in-house – also known as on-premise solutions. They are located within the airline itself, on the airline’s servers – they don’t move data around outside the airline – so data security is focused around internal employee access control.
It all comes back to the way a provider has built their cloud solution from the ground up, putting data security front and center. Only then can the front end deliver – with accuracy and authenticity – the most advanced revenue management and commercial insight solutions for airline customers.
While safety, on-time performance and cost effectiveness made air travel the preferred mode of transport for business travelers, the new priority is on sustainability and carbon emission levels, and air travel cannot compete with rail on this metric. As business travel is coming back after the pandemic, is rail ready for business travel?
If we take a simple example of a trip from Geneva to London. By plane, the journey takes 1 hour and a half, produces about 100kg CO2 and costs about EUR 100. By rail, it takes about 8 hours with 1 stop (change station in Paris), produces about 5 kg CO2 and costs about EUR 200. Let’s assume the environment-conscious business travel favors low CO2 emissions compared to time and cost. What are the other points to watch when traveling by rail?
Air journeys including connection use “Minimum Connecting Time (MCT)” which build a contingency when connecting between two flights. Rail journeys don’t include MCT, i.e. an itinerary may show a 3-minute time between the scheduled arrival of the train and the departure of the next one, which is barely the time to change platform. This may work with Swiss railways that operate like clockworks, but not in other countries. Railways don’t track on-time performance of trains, in the same way FlightRadar tracks flights. Railways don’t check if passengers are on board and won’t wait for connecting passengers, unlike airlines. Railways don’t provide assistance in case of missed connections like IATA airlines do. These differences mean that it is safe to add contingency in the rail itinerary compared to what a website may suggest.
Websites may not recommend the best itinerary if they don’t search the right websites. For example, I searched a solution to go from Bremen to Berlin in Germany. The Kiwi website recommended a combination of flights via Palma de Majorca on the way out and via London (7 hour self-transfer from Gatwick to Luton) on the way in, whereas the direct 3-hour train connection was available on DB website.
Air travel has made electronic tickets and boarding passes a norm since 2010. For rail, electronic tickets exist at national levels but are not ubiquitous for international journeys. In a recent example I booked a train ride from Germany to France using the SNCF (French railways) website which required to collect the ticket for the DB (German railways) segment on a kiosk in a French train station! Not only the delivery of tickets should be completely electronic and mobile, but in case of changes the customer expectation is to receive the new document on the mobile phone.
The travel experience
The longer the journey the more important is the travel experience, for the business travelers who’d like to be productive. Forward-facing seat, wifi on-board, plug for the mobile and laptop, spacious table are examples of attributes valued by a business traveler. Assuming that the train cabin is equipped, the traveler should be able to book the seat and access the attributes.
While airlines have designed products for business travelers (calling it business class), railways still operate first and second, with sometimes very little difference. In another example, the fare difference between a first and second class on SNCF is 2 euros on a 52 euro fare, or 4%. The ticket can be modified with conditions in both options, bags are included and electric sockets are available in both options.
The disruption management
The longer the journey and the larger the number of connections, the higher the chances of missing the last train and ending up in a station closed for the night. While IATA airlines accommodation for the travelers who missed their connection, railways don’t have procedures in place. This is simply due to the nature of the contract with the carrier: the airline commits to carrying a customer at a specific time to a destination, whereas the railway simply allows the customer to occupy the car.
In a recent example in Germany, after all trains to France were cancelled for the day, I ended in a German train station at night, with DB offering to sleep in a parked train. There are no alternatives by bus or no hotel accommodation. Although the cancelations are not the norm, the business traveler must know that in this case hotels will be full and the only option to stay warm for the night is the car reserved to refugees and homeless people.
The refund process
The airline refund process is not designed for simplicity and automation. The airline fare may not be refundable, but the government taxes and fees collected with the fare are not due in case of cancelled flight and should be returned to the customer. I’ve not seen yet an airline ticket which can clearly show the refund value in case of a customer decision to cancel or in case of airline decision. This would not only add transparency but also enable automation.
In the case of railways, the complication is augmented by the lack of real-time traffic information. In my example above, SNCF didn’t know that their train stopped in Germany and I received a confirmation that the train had arrived in Paris, while obviously it was blocked in Germany. In the case of DB, the refund process requires to fill an online form and send it by post. The claim request is not valid without a “confirmation of delay” which is not provided by the carrier, defeating the entire process. In this case, I eventually found a hotel room, at EUR 100 for the night, which is unlikely to be paid by DB or SNCF.
I love traveling by train and live in a country with excellent rail services, Switzerland. But rail is designed for mass local transit, not for internal business travel. This article looks at the gap between the modes of transport from a customer experience perspective, trying to use rail for business travel.
It shows that there is a clear opportunity for rail operators to capture business travel demand in a time of sustainability-consciousness, until air travel deploys massive fuel alternatives becomes competitive from a CO2 emission perspective. Adapting rail for business travel means addressing ticketing, itineraries, customer experience, disruptions and refunds.
If any rail operators have already implemented some of the changes suggested in this article, I encourage them to comment below and I will gladly feature them in a future article.
As Valour Consultancy explains: “Airlines want to see EFBs [electronic flight bags] (and cabin crew devices to a lesser extent) become increasingly holistic platforms which operate in an integrated system rather than as lots of standalone apps which operate in isolation; however, they also want to retain the ability to select solutions from different vendors to suit their users’ needs. Marrying these two desires is one of the major challenges facing the industry, and efforts to do so are already well underway. This trend will be one of the primary drivers of growth over the coming years.”
Airline industry veteran and Jetliner Cabins author, Jennifer Coutts Clay also covered this trend in a recent article for Inflight Magazine. As she writes, the days of paper-based flight logs and charts are at an end. “[T]he advent of apps has fundamentally changed the traditional cabin-management process.” Cabin crew can now use their airline-issued PED (Personal Electronic Device) to offer superior and more personalised passenger service. With access to live information on passenger food preferences, the status of a passengers’ flight connection, or recent complaints about the journey, cabin crew can quickly address issues and foster loyal flyers.
So what does that look like for the passenger journey? Take an example of an average digitally savvy passenger who has booked their reservation online, obtained digital documents for travel, dropped off their luggage at a digital self-drop location, helped themselves speed through the security line and boarded the aircraft using biometric ID. When they board the aircraft, they will likely want to either use the seat-embedded in-flight entertainment (IFE) or stream content to their own personal electronic device from the airline’s wireless IFE platform. A number of airlines have already made their systems compatible to link with passengers’ own electronic devices so they can queue up content ahead of boarding that will begin playing whenever they like at their seat. But more than that, passengers may want to pre-select their meal options, or order a-la-carte from the menu of snacks and beverages available onboard. Having a ‘smart’ cabin means that passengers could use either their PED or their seat-back screen to place their FAB orders. The inventory system in the ‘smart’ galley could automatically assign dishes top passengers seats, updated to crew’s PEDs so they know who gets what, and keep a running stock in real-time so that passengers can be offered alternatives either by the application or the crew when their first choice is no longer available. The data gathered from that process can help inform the airlines’ catering choices, ensuring less food waste onboard, and adequate stock of more popular items on a specific route. Less food waste is not only better for the environment, it also represents a significant boost to the airline’s bottom line.
On a connected aircraft, passengers can also be alerted on the status of their RFD-tracked baggage, and on the status of their connecting flight. Informed passengers will have fewer reasons to seek-out help from customer service representatives either on the ground at the airport or at call centres or on social. That passengers can self-serve through digital tools to be in control of the journey saves both the passengers and the airline time and money.
Valour finds the effort companies are putting into these cabin digitalisation developments is yielding returns, even in harsh market conditions. “Despite the impact of COVID-19 on airline expenditure, many cockpit and cabin application vendors have performed resiliently in the face of extremely challenging market conditions. Indeed, some have even emerged stronger from the past couple of years. This is because applications such as performance optimisation solutions and electronic tech logs (ETLs) offer considerable cost savings to airlines by either saving on fuel or improving turnaround times,” they write. “Still, significant challenges remain. The market remains fragmented and the dual effects of integration difficulties and dependency on connectivity, which some applications require to have full functionality, means growth is hindered to a degree.”
The IoT of planes
The integration of various digitalised cabin systems is another challenge ahead, as Valour points, out. But vendors are actively working to ensure that happens.
While recent headlines have drawn attention to ‘teething’ issues with 5G roll-outs near airports in the United States, the technical benefits of this new high-speed connectivity both on the ground and in the air will boost airline digitalisation, addressing some of the barriers to growth that Valour Consultancy identifies.
“In a world where some three billion of us – and counting – have our world on our smartphones, people’s dependence on universal, ‘always-on’ mobile connectivity is set for surefire growth,” SITA writes. “And this is just as true onboard the aircraft, as on the ground. When our predecessors conducted the first inflight cellular data transmission more than a decade ago, no one would have anticipated having to adjust to life in a pandemic. But in the today and tomorrow of the post-COVID-19 flying experience, new inflight mobile services, offering expanded capacity and capabilities, will become increasingly relevant to airlines and passengers.”
SITA concludes: “While there is a famous lag in the time it takes for terrestrial trends to land in the cabin, it’s just a matter of time before inflight 5G comes onboard. And when it does, it’ll not just enable an improved and unified passenger experience. It’ll have the performance and capacity necessary to handle fast-mounting rates of mobile and connected device usage, and all the innovation potential that lies within.”
Digital transformation is no longer an option. In fact, it’s a prerequisite to organisational resilience, success and your ability to comfortably pivot in an ever-changing world.
With the prevalence and unprecedented growth of technology acting as a catalyst to digitisation, there’s no better time than the present to embrace the cloud and all of its glory.
Now, more than ever, this necessary shift in technology and service is disrupting businesses in the most positive way:
Digital transformation investments are set to amount to almost £5,23 trillion, between 2020 and 2023 alone.
Enterprises that have undergone digital transformation are predicted to account for £39.6 trillion of the global nominal GDP in 2023.
There are an abundance of benefits that can come out of digitally transforming your business.
You can have recommendation or prediction engines like Netflix. Or simple, yet ingenious chatbots to deal with a multitude of customer journeys. You could even get process automation throughout your entire organisation to cut costs and speed-up delivery.
With digital transformation, the choices are abundant.
But first, you need to consider your existing infrastructure.
Legacy Tech Doesn’t Cut It In 2022
In order to fully embrace the new, it requires a re-evaluation of the old.
Most companies still have antiquated IT systems and are dependent on technology that can no longer serve them.
The big problem with relying on outdated, obsolete technology is that you fall behind. You end up slower than your competition. Unable to keep up with change and vulnerable to threat.
The term ‘legacy’ describes these outdated and inefficient technologies, systems or infrastructures.
Cambridge Dictionary defines it as “a legacy product or system is one that is no longer available to buy or no longer used very often, but that is still used by some people or companies”.
In relation to IT systems and infrastructure, having any form of legacy technology will ultimately act as a hindrance to the longevity and potential growth of any business.
With outdated technology, you run the risk of falling behind, losing out on missed opportunities and laying waste to valuable resources. Legacy technology simply doesn’t work. And the advantages that come with Cloud don’t compare.
In fact, the stats speak for themselves:
A study on the cost of maintaining legacy systems in the US revealed that ten of the government’s legacy systems cost about £255 million a year to operate and maintain.
Stats have also revealed that banks and insurance companies dedicate upwards of 75% of their IT budgets to preserving legacy systems.
To add insult to injury, legacy systems can cost an organisation up to a staggering 15% budget increase every year for maintenance.
The Cloud: Your Key To Digital Longevity
To have a basic understanding of the Cloud, it’s important that we establish definitions for a few key terms.
The Cloud – is essentially a collection of IT services (servers, software, databases) that exist on the internet. While these servers exist in data centres across the world, they can be accessed and managed by users at any given time and in any given place.
Cloud migration – is a company’s decision to move their data, software and IT infrastructure to one of these cloud ecosystems. This way, they have open access to unlimited storage and greater flexibility, security, compute, as well as secure backup
Cloud providers – are third party companies that provide cloud computing services.They offer customers a cloud-based platform that replicates and improves standard IT infrastructure, practices and even software.
CloudOps – is enacted once you’ve migrated to the cloud. Your next step is to manage, maintain and optimise your new environment for optimal results. CloudOps is essentially the process behind making your new investment perform at its absolute best.
How Well Does The Cloud Work?
To begin unpacking the cloud, we need to answer a very simple, but important question:
Does it work? (And if so, how well?)
These facts might clear things up a bit:
Gartner predicts the public Cloud market to reach over $623.3 billion by the year 2023. This means that more enterprises and SMBs are investing in Cloud technology and understand the positive effect it will have across industries.
Forbes cites advantages such as significant cost reductions, improved scalability and faster innovation as a few of the basic benefits of Cloud technology. That’s right, only a few of the basic benefits.
Accenture indicates that businesses that take a strategic approach to new technology achieve more than twice the revenue growth of those that don’t. A strategic approach entails using Cloud in a way that tailors it to your company’s specific needs.
Still not completely convinced?
The Cloud is also environmentally friendly. That’s right. Cloud technology will significantly reduce carbon emissions, save massive amounts of electricity and heavily cut back on resource usage (hardware, facilities, housing).
The Cloud will save money in more than one way. Besides cutting down on hardware, labour and maintenance costs, overall productivity is also improved and you save huge amounts on capital expenses with affordable pricing models.
Security on the Cloud is also extremely safe and constantly improving. Cloud providers employ the best security professionals to ensure that your data is encrypted and kept safe from cyber attacks. Gartner even predicts that by 2025, 99% of Cloud security failures will be the user’s fault.
Get Started On Your Cloud Migration Journey
Every business will inevitably undergo some form of digital transformation. It’s simply a matter of when.
And the cloud, with all of its many advantages, is essential to that journey.
To remain competitive, to evolve and to innovate in an age that puts technology at its core is critical to any organisation. While it might appear to be a fairly complicated and uncomfortable shift to take – you can rest assured that this isn’t necessarily the case.
You need to either have the right talent, or work together with the right people that understand the value, importance and impact of your data, as well as the role that it plays in your success.
COVID-19 has caused an unprecedented challenge to the aviation industry, requiring lower IT spend in line with depleted traffic levels. As the industry continues to recover, with certain States such as the U.K aiming to now live with COVID, and drop testing for fully vaccinated travelers, there appears to be some hope for the sector in 2022. 81% of airports in the latest IT Trends survey by ACI World and SITA show that they are looking to maintain or even grow their IT spend in 2022. The planned spend at airports was 5.1bn USD in 2021, up from an actual spend of 4.1bn USD in 2020. Whilst this is only 50% of actual spend in the pre-pandemic year of 2019, the signs are an encouraging trend.
As expected, whilst the pandemic continues, there is much focus on digital transformation at airports. ACI World released an updated Digital Transformation handbook in 2021, designed to support airports in their planning and rollout of the journey. This is a way airport can look to:
Reduce OPEX through staffing costs.
Simplify the passenger experience
Implement self-service solutions including touchless processes
Continue with biometrics rollouts.
All of these initiatives are crucial for recovery by reducing the face-to-face contact with airport staff. This adds to hygienic journeys and the welfare of passengers and staff, but also boosts an airport’s bottom line with lower OPEX. This helps airports with their staff management as it is becoming increasingly difficult for airports to hire front line workers a many have left the sector since the first wave of the pandemic and don’t appear to be rushing back. This is evident by 84% of airports implementing self-service technology in 2022, with 86% of airports using cloud infrastructure to make this a seamless possibility.
Biometric ID management has been spoken about for the last decade, but only recently has it really been integrated into multiple airports, except perhaps in the case of border solutions. Nearly three quarters of airports will invest in biometric technology by 2024 improving security and operational efficiency for airports. We will see this not just at border control, but throughout the journey from check-in to self-boarding solutions aiming to reduce costs for both airports and airlines and quickening up the transaction times versus traditional manual processing.
Whilst we may be stating the obvious that airports will invest in touchless processes, one area that has been steadily rising in investment from airports is within cybersecurity. Due to the increasing dependence on technology and digital services, 94% of airport CIO’s will be spending some amount on cyber protection by 2024. ACI also serves its members by offering cyber support with different products available including our cyber self-assessment tool, Airport C-Suite executive level questionnaire and advisory services.
Two other key takeaways this year that are worth noting is in the area of business intelligence as airports look for ways to improve service and spend per passenger, as-well as the ultimate sustainability goal. Airports are looking to differentiate themselves based on environmental factors and it is clear reducing the carbon footprint at airports can be supported by a strategy of green IT.
As the industry continues to battle through different phases of the pandemic, we can see clearly that the light isn’t at the end of the tunnel, it is in our skies. Airports now take IT to be an enabler for rapid, efficient, safe, and seamless journeys. The continued and substantial investment in IT throughout the industry is very encouraging, despite it still being a global pandemic.
During the Aviation Festival London, Sjoerd Blum, Chief Information Officer, Royal Schiphol Group, suggested airports should think of themselves less as infrastructure and more as tech companies, with technological innovation and data management driving their strategies for recovery and growth.
“Like anybody in the sector, we were severely hit by the crisis that we’re in together, but the good thing is that our long-term ambition still stands. We aim to be the world’s most sustainable and highest quality airport,” Blum said. Blum suggested it is essential to make the most of technology and data to succeed. “No matter if you talk airport operations, if you talk commercial, if you talk safety, security, or asset management, or your staff, you make the difference in the future as an airport if you make technology and data work to the maximum.”
To achieve their goals, Schiphol has prioritized IT and data. “You start to look like a tech company, who does tech for their existence,” Blum said. “If you look through your traditional eyes at an airport, you might still see that infrastructure company that we have been over the past 100 years. But if you look a little bit closer, you see a company driven full with tech, driven forward by the power of data…Think like a tech company. We took that as a leading principle when adjusting because of the [COVID] crisis…But we said we would not only want to adapt because of COVID. We also want to improve. We want to build back better.”
So what does “think like a tech company” mean in practical terms? As Blum explained, it means putting technology to the forefront not as a supporting mechanism for the infrastructure but as the driving engine of the business.
“A tech company first has a foundation on which they built all their IT and data products. Those products are built as part of the business, not by an IT team doing that for the business—as an integrated part of your business, ensuring that it leads to value…You make smart use of what the market can do for you.”
As an integrated part of the business in operations, safety, security, commercial, asset management, and human resource management, Schiphol has developed business platforms that gather data as part of their primary activity. Schiphol has also prioritized connectivity solutions that will support large scale, real-time gathering and sharing of data and building a smart facility.
“We are taking important steps to be ready for the connectivity of tomorrow—thinking about 5G in our enabling technology outlook,” Blum said. “Fully embarking now on the power of what the cloud can do for us and the integration that will come. Our data and AI strategy is not only about the foundational parts, getting one platform doing your engineering, but is also very much focused on getting the products into the business platforms…In essence, the management platform is all about getting to an intelligent asset control centre, safety and security, and a seamless flow biometrics journey.”
Other advantages of technology-led total airport management operations at Schiphol include refining their commercial strategies by making better use of passenger data, creating a “workplace of the future” for staff.
Blum also highlighted the importance of cyber defence in a technology-led airport. “We are opening up as a sector, and the bad guys are aware of it as well. So you need a cyber roadmap that goes together with the steps that you’re taking,” Blum said.
The next step for Schiphol’s tech-company strategy is the potential commercialisation of their technology developments.
“Thinking like a tech company also convinced us that we should no longer just be building products that can bring value to Amsterdam. We are looking at building products that can also function somewhere else in everything we do. That can be within our group, as Schiphol airports, but it can also have value [at other] airports. What we have done is we have partnered up with the market, and we are now able to bring the products that bring value to us, also to other airports.”
Schiphol has developed solutions for staff communications, airport disruption management, and sustainability criteria, among others, which Blum suggested could be offered to airports with fewer IT development capabilities in-house.
Their report suggests that airlines and airports might want to plan their digital and social strategies around VR, AR and Social.
M1nd-set expects greater digitalisation of the shopping experience “will emerge more prominently over the next year.” That includes making further investments in CRM programmes, developing more retail and service APPs, a continued focus on making omnichannel retail seamless, and boosting the resonance of social commerce with Augmented Reality (AR), Virtual Reality (VR), and chatbots.
More than eight out of ten shoppers (83%) said digital presence and experience are as important as the in-store experience.
With travel coming to a stand-still over the past two years and non-essential retail accessible only online, consumers relied more on digital channels. They forged new shopping habits, which endure after reopening.
But it’s not just about the retail channel. This trend toward greater retail digitalisation also suggests that digital-only products will rise in popularity and demand.
What does that mean for airports and airlines?
M1nd-set suggests airport retailers “meet and service shoppers online first and attract them into stores when they next travel.” Products such as “e-books, vouchers and tickets to destination-based experiences, inflight and/or onboard services for airlines…photography and artwork or films and music” are expected to grow in the months ahead.
Airports that support online shopping with terminal pickup and airlines that offer IFE content and in-flight meal purchases through their apps will have an advantage. But airlines and airports may consider introducing digital-only items, either unique products or special discounts. These will encourage users to keep the app installed on their devices and engage with it frequently. “Many low-cost airlines have reaped the rewards of this niche for some time already,” M1nd-set points out. “Retailers in airport retail can also benefit, with the right strategy in place to meet the consumer digitally first with time, location and destination relevant communication and advertising.”
“Brands can also meet consumer expectations and enhance the customer experience, with digital-first encounters, such as virtual distillery tours, educational programmes about the sustainable production processes that then entice the shopper to learn more and purchase a sustainably packaged or produced travel retail exclusive in-store when next travelling.”
More than half (53%) of shoppers interviewed say they prefer an omnichannel shopping experience, compared to only 37% in 2021.
M1nd-set also suggests that developing VR and AR experiences that support your retail strategy will help take the stress out of travel for returning passengers post-COVID while offering helpful edutainment content. Highlighting the sustainable origins of some featured local products, or offering bar-code activated videos that better explain the application of certain cosmetics, for example, will entertain and entice. M1nd-set believes there are ROI gains from VR and AR development.
More than half of shoppers globally say they value experiences more than products
Among Millennials, the tendency is higher still, with seven out of ten shoppers leaning towards experiences.
Consumers are considerably more likely to purchase products online where the shopping experience is more interactive and immersive through AR.
One well-known e-commerce platform reports that products displayed with AR content demonstrating use have double the conversion rate than products without AR.
M1nd-set also identifies social commerce as “a major trend that will evolve and grow significantly throughout 2022,” with growth driven primarily by Millennials and GenZ consumers.
The social commerce market grew by more than 30% in some developed markets in 2021 and is expected to more than double in market size over the next four years.
“Meeting shoppers where they are, whether on Facebook, Instagram, Twitter or Tiktok, or via live streaming services, is proving to be hugely successful to major brands who invest in social commerce and social media advertising. In China, the most commonly used platforms among consumers are Douyin, QQ, XiaoHongShu, Pinduoduo, and WeChat. Both in China and elsewhere globally, the younger generations will account for the significant majority of spend on social media platforms in 2022,” m1nd-set states.
Eight out of ten shoppers discovered a new product while on social media.
Around two-thirds of shoppers globally who use social media say they have purchased a product via a social media platform in the past year.
Two-thirds of those who bought something through social commerce say they purchased the product following an advert they saw on social media.
Facebook and Instagram are the most popular platforms for making purchases through social commerce.
Around a quarter of shoppers interviewed said they had used Facebook and two-fifths said they used Instagram.
Less than 10% said they had used other platforms such as TikTok, Twitter, Pinterest and Snapchat.
Of those who did bought something through social commerce, two thirds said they would do so again.
The most common categories purchased on the social commerce platforms include video gaming, toys and leisure activities, jewellery and watches, fashion & accessories and books, including e-books, m1nd-set states.
“As with other aspects of digitalisation, such as livestreaming and personalisation through sophisticated CRM, consumers will be using social commerce more and more frequently to make their purchases. Social media location tracking tools enable brands and retailers to target consumers easily when in or near an airport. The opportunities are endless, but failure to meet the consumer in a place where he or she is increasingly used to shopping will mean brands and retailers risk forfeiting considerable sales opportunities,” m1nd-set concludes.
Artificial Intelligence (AI) and Machine Learning (ML) are critical tools in the modern airline competitive toolbox, but they can be clunky. They are often overwhelming projects and can sometimes initially yield underwhelming results. But the promise of AI to build more meaningful and efficient connections with staff and customers gives airlines good reason to embrace this technology, even in its awkward infancy.
When informing AI systems, the quality of the data supplied can impact the result. The models used to process that data can shape what the neural network makes of it. Computers don’t think like people because people are still figuring out how to make computers feel. Besides, people haven’t quite figured out how they process information either. That’s why it’s essential to have standards for the structure and the use of data that will inform AI applications.
That was one of the salient points made during a fascinating discussion on AI systems at the Aviation Festival, London. The panel led by Alan Talbot, CEO and Founder, Bridge Solutions, Ltd, included Ben Dias, Data Science and Analytics Director, easyJet, Justin Bundick, Senior Director, Data Science & Automation, Southwest Airlines, Oz Eliav, GM, Cockpit Innovation, ELAL, and Alex Mans, CEO, FLYR Labs.
They tackled the question: How can airlines find new data sources to create a more complete single view, operations and support real-time and agile decision making?
“How can airlines find new data sources to create a more complete single view, operations and support real-time and agile decision “making?
Justin Bundick, Senior Director, Data Science & Automation, Southwest Airlines, spoke to the importance of data set integrity, saying: “We need to be staffing and doing a lot more accuracy monitoring. A lot of companies call it ‘drift monitoring’…You have to spend a lot of time and due diligence on that. In the past, you might have been able to deploy a model and check in on it every month or every 60 or 90 days. You need to do it daily or weekly now because of the volatility. You must ensure that you have the right staff to go in and do the deep-dive analysis, and make sure that dataset ‘A’ doesn’t need to switch to data set ‘C.’”
“I think there are a lot of companies pushing very strongly in this space, both from a data and analytics perspective,” Bundick added. “Whatever company you’re in right now, you have to look at your business strategy, translate that into a digital AI strategy that then converts into a data strategy, which then converts into a tech stack strategy, to be able to host and utilize that data. And involved in that, there will also be an IoT strategy. Especially in an industry like ours, where not all the data you need is created by transactional systems, it’s interactions that you need to capture. So, all of that must be tied together. It’s multiple layers of strategy that you have to deploy across multiple different parts of the business.”
“Until the business strategy and data strategies align, you don’t get anywhere.”
Ben Dias, Data Science and Analytics Director, easyJet said: “Until the business strategy and data strategies align, you don’t get anywhere. People processes are important. Even if you have all the business strategies aligned to the data strategy and all the data in one place, if you’re asking the wrong questions of the data, you won’t get the right answers in your business roles. So you have to also train the data literacy skills across the company. You might start with the data scientists and data analysts, but you have to eventually get out to the business as well—having essential, excellent training for people.”
Dias added: “I think that there are two key priorities for me to make it happen. The first one is the literacy level across the company because even if you made the data available, if you’re not able to use it, it won’t help. And it is also creating that platform that is easy to use and available and has the data in it. That’s, that’s hard when you are looking at a company that has been here for a while. The data has built up over time, and the data sets are all over the place. Bringing them together, and making them available, is a challenge, but it’s not insurmountable. You need to bring the data and make it accessible, maybe not in one place—just making the data available and upskilling the people across the company to use it. Those are the two things, I think, that will accelerate the process.”
Oz Eliav, GM, Cockpit Innovation, ELAL spoke to the role of automation in the data gathering process. “Automation is also contributing to the accuracy and objectivity of data,” he said. “If you have the objective data, then you can probably make actionable insights actual intelligence based on this automated data with no human intervention.”
“It takes a lot more investment from your technology organization. It takes a lot more skillset from an overall platform and data engineering perspective. But it’s really powerful.
Speaking to the agile application of AI, Southwest’s Bundick suggested: “It takes a lot more investment from your technology organization. It takes a lot more skillset from an overall platform and data engineering perspective. But it’s really powerful. Because by building those types of platforms for your AI, you’re able to deploy it. But not only that, you’re able to monitor those AI that you’re deploying and be able to make adjustments to them when there’s volatility happening. You can change them out without having to bring down a system updated in the system itself.”
Alex Mans, CEO of FLYR Labs, suggested airlines have underutilized their data. “Inform yourself with the broader data you have access to…Find ways to extract signal get past the noise get past the data sparsity collect more data and focus on making maximum use of that before you look too far out,” he said. “But equally important is structuring the data so that it can be processed efficiently. “Data sources change over time….Most airlines that we work with, we build our own canonical model on top of wherever data sets they have—because it’s never perfect.
“Once you get that out of the way, things will move a lot faster in the future.”
“Most importantly, we cannot afford as an enterprise SAS company to go and custom hook-up every data source we need wherever and however it sits. We need our software to read from a predictable common format. So we always install our own canonical data model because it creates a consistent system boundary between different airline systems and our solution. That enables us as a technology vendor to move much faster on deploying new capabilities. Because every airline we work with, the data we’re looking for, regardless of the airline, is structured the same. We still go through the steps of converting the airline’s data into our respective format, just because once you get that out of the way, things will move a lot faster in the future.”
While legal compliance to data regulations is an essential requirement, the ethical use of data is also a concern, with AI systems guiding decisions that directly impact people, Justin Bundick pointed out. “At Southwest, we are starting to spend a lot of time on governance processes around the ethical use of data and having the right touchpoints in place to understand the features we are using. Do we agree with those features? Should we be using them? What policies do we put in place around that? Even more than that, as we start to monitor the efficacy of our algorithms, we also monitor how the features that we are using are influencing potential decisions made. Are those decisions driving unethical behaviour? We don’t have the magic bullet yet. I don’t know that many companies do, but it’s something that we’re very focused on. It’s one of our priorities, as we move into 2022, to establish that. We’ve got a rough framework right now; we want to make that a robust framework by the end of 2022.”
What price do you put on loyalty, and how do you make that currency grow in ways that go beyond transaction? This is one of the central questions airlines have had to answer since miles and points programs were first introduced to the industry in the early 80s to ensure return flyers and reinforce brand loyalty. It proved to be a brilliant scheme, which has kept airlines afloat through hard times. But does this offering resonate with younger generations? That was one of the critical discussion topics during a special panel session at Aviation Festival, London. Matthew Hall, Head of Loyalty Planning and Management, Air Canada, Sid Krishna, Director of Loyalty and Cobrand, Spirit Airlines, Anthony Woodman, Vice President Customer Journeys and Reward, Virgin Atlantic Airways, Pekka Antila, Head of Loyalty, Finnair, Grant McCarthy, Director of Loyalty CarTrawler, and Kian Gould, Founder & Chairman, Omnevo shared their views.
“I see a lot of complexity in loyalty and loyalty programs and a great opportunity to simplify the value proposition”
Pekka Antila, Head of Loyalty, Finnair, believes there is an advantage in simplifying the loyalty program transaction. “My background in leisure travel I still look at loyalty through those eyes. I see a lot of complexity in loyalty and loyalty programs and a great opportunity to simplify the value proposition. First, by simplifying the way we communicate [value]. We could be more relevant for a large number of consumers.”
One example was the airline’s partnership with ePassi, which allows consumers to use their Finnair loyalty program points as currency at retailers around Finland. “Our members can redeem their points with close to 30,000 merchants in Finland—at restaurants, gyms, yoga schools, and cultural venues… You need to encourage your members to identify themselves and connect, but it’s so easy after that. You just choose a merchant, open your app, and redeem your points for the service that you like.”
Sid Krishna, Director of Loyalty and Cobrand, Spirit Airlines, shared how the airline made loyalty points meaningful to low-frequency, highly changeable leisure flyers by embracing digital wallets and mobile payments appealing to a new generation of “mobile humans.” “What we did with the co-branded card products we have—one of the first things we focused on—was to make sure that we had the ability for those cards to be presented in the Apple Wallet and all of those different [mobile payment options]. Because we have seen, and the data have shown, that people who end up putting their card on their digital wallet have more engagement with the program in the end. I think the push will always be there to book these folks into mobile. Also—for the millennials and Gen Z—the focus area that we’re talking about today is that they are more [active] on their mobile phones than any other system that they’ve ever been on. So that’s our best way to tap in into these folks.”
Anthony Woodman, Vice President Customer Journeys and Reward, Virgin Atlantic Airways, suggested that aligning the brand value proposition is essential to loyalty as the consumer mix changes, with younger Millennials and GenZ having different expectations of the brands they transact.
“We’re working on the seamless experience, the overall digital journey for your customers”
“One of the most critical things for younger customers mixing experience, so that is a lot of the loyalty value proposition. [We’re] working on the seamless experience, the overall digital journey for your customers…That the end-to-end experience is seamless and perfect is critical for these younger customers… The question that I always come back to is, what does your business represent? More and more, we find that customers are purpose-driven and that they want to interact with companies that have a clear value proposition—a purpose statement at heart. It’s not as simple as, ‘We have a business, we sell some stuff. We want some younger customers. Can we give them some points?’ You have to say that we are a brand committed to selling value propositions to customers. And if we don’t, then actually, let’s start there before we get too involved in the micro-loyalty economics.”
Matthew Hall, Head of Loyalty Planning and Management, Air Canada, agreed with Spirit Airline’s Krishna on the importance of a mobile-first experience and emphasized that one of GenZ consumers’ expectations is to ensure the value of their data. “We’ve got to build the mobile experience first…For Gen-Z—they are the most privacy-aware folks that I’ve ever seen. It’s not so much to say privacy. It’s more that they know what their data is worth. So to get them to give up their data will take more convincing. See, it’s less about the machine or being worried about privacy, per se, as they mature [as consumers]. It’s that they say, ‘I know what it’s worth. I want to make sure I know what my data will be useful.’ So making sure that these privacy policies are very clear versus just the long-form T&C’s.”
Hall’s comments, coupled with the insights from Antila, Woodman and Krishna, suggest that GenZ expects companies to apply their data in a way that adds value. Simplifying transactions because the offers, booking flow, and transactions are informed by the data consumers have willingly supplied. Making consumers enter information they’ve already given or switch out of a payment method they have already indicated they prefer would erode the loyalty proposition, as would pushing products or services unrelated to their consumer identity and behaviour.
“Gen Z’s are a lot less tolerant of screw-ups from airlines when it comes to technology.”
Kian Gould, Founder & Chairman of, Omnevo emphasized the importance of this, saying, “Gen Z’s are a lot less tolerant of screw-ups from airlines when it comes to technology. We all have had these experiences of going through airline checkout where you have noticeably recognized that you’re interacting with four different sites because they all look different. This is something Gen Z is very intolerant of—if it doesn’t work right. They will just stop. It is much more than an error, whereas older generations will tolerate more. This has always been one of the most critical aspects when we’re doing rollouts with airlines when it comes to the payment question. You need to accommodate much more than just the standard payment options… Someone might not have enough points to pay for half of the journey, and they want to use WeChat to pay for the rest or AliPay. So you have to support that entire Payment ecosystem, from native payments and third-party payments and cash, and Miles payments. That’s one of the most complex aspects of creating these marketplaces, but it has a huge impact on conversion.”
Grant McCarthy, Director of Loyalty CarTrawler, said the personalization of loyalty program communications is also critical to loyalty building.
“They want to say, ‘You know my lifestyle. You know I want to travel to Orlando, and I go to Disney. You’re going to offer me a car which will meet my needs…a hotel that meets my needs as well.’”
“There’s a great study by McKinsey where they’re saying the same thing. The different generations would suggest ‘extra me.’ You think about loads of programs and join one, and you stay in it forever. But Gen Z are less [tolerant of] the big rubber stamp emails—[and just booking] if it’s a pretty pointless destination [to them.] They want it to be personalized to them. They want to say, ‘You know my lifestyle. You know I want to travel to Orlando, and I go to Disney. You’re going to offer me a car which will meet my needs…a hotel that meets my needs as well.’ So you want to follow-up personalization. The broad-brush approach to people, which we have taken historically, [won’t work]. This is a new generation. So if you offer a truly personalized offering, they are more inclined to convert and spend money to help you make money. If you don’t offer a personalized solution, they are more inclined just to switch off and go to another partner, another supplier. There’s no loyalty anymore to a particular brand. If you don’t deliver what they want in a personal way, they walk and go to somebody else.”
A final thought on the brand loyalty proposition from McKinsey’s ‘True Gen’: Generation Z and its implications for companies:
“Young people have always embodied the zeitgeist of their societies, profoundly influencing trends and behaviour alike. The influence of Gen Z—the first generation of true digital natives—is now radiating outward, with the search for truth at the centre of its characteristic behaviour and consumption patterns. Technology has given young people an unprecedented degree of connectivity among themselves and with the rest of the population. That makes generational shifts more important and speeds up technological trends as well. For companies, this shift will bring both challenges and equally attractive opportunities. And remember: the first step in capturing any opportunity is being open to it.”
Consumer Data Informs Brand Strategy as Airline Marketing Teams Adjust to New Normal
The COVID-19 pandemic has re-shaped consumer behaviour. Airlines discussed adaptive marketing and brand strategies to ensure growth and recovery at the Aviation Festival, London. The panel discussion, led by Ross Sleight, CSO, Somo, included insights from Annabelle Cordelli, Vice President of Marketing, Virgin Atlantic Airways, Jayne O’Brien, Head of Marketing and Loyalty, JetBlue Airways Corp., and Tyri Squyres, VP Marketing, Frontier Airlines, as well as Seth Cassel, President, Everymundo, and Perri Maxwell Chaikof, Director of Product Marketing, Ada.
“I think one thing that we’ve all learned both personally and professionally is you question everything that you used to know—rethink it”
Of the impact of the pandemic on consumers, Tyri Squyres, VP Marketing, Frontier Airlines, said: “I think one thing that we’ve all learned both personally and professionally is you question everything that you used to know—rethink it. Anything that I thought was a steadfast marketing role, you question it. If you had your systems, how you’re advertised, how you thought about your customer, you would rethink it. You retry things that maybe didn’t work before. We found a lot of success in testing things we had done before, and maybe we didn’t get the success [we hoped for]. And we would find that all of a sudden now it was something that would work and was really affecting customers. Customers have changed mindsets. Technology has changed. People have been in their own houses a lot more, so customer sensibilities have changed as well. You need to constantly test and try new things and listen to what customers are saying to make that beneficial. For me, that was the biggest thing that I am looking forward to in 2022—our whole testing plan—the things that we’re going to experiment with, and not be afraid to do some different things and think about things.”
Annabelle Cordelli, Vice President of Marketing, Virgin Atlantic Airways, shared what she learned to prioritize during the pandemic. “I think it’s bought people into sharp focus—in the broadest sense—that’s the customers who are trusting and buying a brand, but also our people delivering that service,” she said. “With everything up in the air—our lives were thrown into disarray—deeply understanding and listening to what people want and being able to adapt to that [is important]. I’ve certainly learned that things are possible, things that you never thought were possible before. I think if you’ve got that combination of really deeply understanding what customers want, what they’re dreaming about, what’s keeping
them awake, their fears at night, and getting under the skin, you can look within and work out how you’re going to try some different things. What are you going to do to challenge yourself, create [offers] that fuel the dreams and address the worries? I think it’s the combination of those two things for me.”
“We’re all living change. We’re all living in uncertainty. We’re constantly evolving.
Jayne O’Brien, Head of Marketing and Loyalty, JetBlue Airways Corp, agreed with her counterparts, saying:
“We’re all living change. We’re all living in uncertainty. We’re constantly evolving. Well, we think that we’re just back to knowing what’s going to happen and something else happens. One of the key learnings for us is the need to be flexible all the time. And the need to be listening to our customers, our marketplace, and our crew members. It’s terribly important, I think. During the earlier days of 2020, information flexibility, helping customers and helping crew members, was probably at the forefront of what we were concerned with. It was less about making sure your price or product information is out there but just making sure that people understood the different requirements of travel and what we were doing to keep people safe and secure. That was for our crew members as well as our customers. The first [priority] is just supporting customers and crew members. In terms of how we go to market, what we’re talking about has evolved for all of us. We need to keep our eye on what matters most to our customers. What do they want to know? How can we make the experience easier? How can we give them the information they need to make that trip? [Customers are] worrying about all the different regulations in different places. Early on, it was about how are the aircraft cleaned? What are the touchless features? What’s the touchless experience? Do I have to wear a face mask? Then it evolved to what type of COVID test do I need to go? And the different laws—they’re all different when we fly to different places, not just the UK. If you look particularly at the Caribbean or South America, each location has slightly different requirements. So the need for customers to understand [those requirements] easily became a priority for us. You’re giving them that information straight up… That is our primary focus, and you have many ways of doing it. We rely very heavily on our channels, our website, obviously comms or emails. You can target customers specifically, looking at where they’re going and what information they need. Using data was there already, but it’s coming back much more to the foreground.”
What is the reality of the behaviour today? Where are things headed? So you are optimizing today but also trying to keep an eye on tomorrow and creating new propositions
Cordelli of Virgin Atlantic Airways said of the airline’s use of data to inform marketing strategy: “I would say fusing lots of different data, depending on what question you [are trying to answer]. It depends on whether you’re trying to optimize today or you’re trying to create tomorrow. We’re using everything from our voice of the customer data. We ask how people want to travel and [their] concerns [about travel]. [We’re] looking at trend data mixed with search data—you get that long and short term. What is the reality of the behaviour today? Where are things headed? So you are optimizing today but also trying to keep an eye on tomorrow and creating new propositions. I think then linked to that big believer when you get some ideas and back to try things is get a concept and then put it out in front of people. So we’re doing a lot around quick turnaround reach. Agile research methodologies to get what people think about that—and how you adjust. Just be focused on deep listening, and then be flexible around adjusting to make it better, and you probably don’t have to change it again.”
Seth Cassel, President, Everymundo, said consumer behaviour data also informs their marketing strategy. “We’re looking at search data, for example, and understanding what our users are looking for, whether that’s searching on-site or searching in Google,” he said. “What we see, especially on Google, is there’s a lot more activity. You can take away from that the demand is there. There’s demand for certain markets. You can segment that data—it’s not all data, it is aggregated data, but it’s very insightful to understand what people are looking for. The fact that they’re actively looking and searching in a non-brand way searching, a flight from A to B. What we see is not necessarily a commensurate rise in brand search, which suggests a dissipation of some brand loyalty. So as you start to plan your marketing initiatives, you recognize that maybe an investment to rebuild some of that loyalty is critical to get back to where it once was. Or maybe it’s a new world, and you can’t necessarily expect the same level of loyalty that you saw before.”
“…Another way to listen to customers is to go to the airports, fly, and talk to customers”
Squyres of Frontier Airlines suggested that rebuilding loyalty requires more effective, personal messaging.
“We were cautious, in the beginning, about tone. It was a tricky place to be, where you’re trying to get attention but have the appropriate tone. In hindsight, we probably [wavered],” Squyres said. “We have a playful, fun brand. We were probably a little too conservative in the beginning. People needed a reason to smile and think about travel again. I learned to test some of the [messaging]. We could have taken a small sample size, sent an email with a clever headline and seen how customers responded. Because, as soon as we did, we started to see a great response. People were looking for a reason to smile and think about really positive things. I think the trial and the testing is really important. Then another way to listen to customers is to go to the airports, fly, and talk to customers. Talk to the flight attendants who are working on those flights. Talk to the team members and take care of crew members. First, they love to be heard. Second, they have great insights into what customers say. Every day, you have a flying focus group sitting in the lounge before they get on the flight and then on board. I find that’s where I get my best insights—my best ideas.”
JetBlue’s O’Brien agreed with Squyres on the importance of one-to-one contact with customers and crew. “We do a lot of what we call Blue Unity Days at JetBlue. That’s about getting out there in the front line. We [met] with our crew members throughout the pandemic and listened to our customers by helping at our airports. There is nothing like sitting, working and being there in the frontline and listening…because you see firsthand what customers are experiencing and the pain points. We also make it a policy to reach out to our most valuable Mosaic customers. They’re part of our TrueBlue loyalty program—just talking to them about how’s it going. You can’t sit in the ivory tower—it’s a new world. You’ve got to go and experience it. Certainly, during the pandemic, I was flying weekly, up and down and around the US. It sounds really simple, but it’s back to basics. Listen to the customer. Listen to your crew members and just design everything around what you’re hearing.”
Perri Maxwell Chaikof, Director of Product Marketing, Ada, brought the conversation back to data and emphasized the importance of inter-departmental collaboration where marketing supports revenue management.
“Airlines own a lot of data already. The challenge is to leverage that information in the right places to get the most out of every interaction with your customers.”
“You have so much more data about your customer than the average e-commerce business. Airlines own a lot of data already. The challenge is to leverage that information in the right places to get the most out of every interaction with your customers. So I’ll use a specific example now and talk a little bit about AirAsia, one of our larger airline partners. They deployed data across all their social channels with their customers. If you want to talk to someone at AirAsia, whether you’re on WhatsApp, WeChat, their website, or in their app, your first point of contact is an interaction with Ada, which is a fully automated experience. Ada is connected to [the airline’s] back-end systems. If I’m logged in, I can speak with Ada, and it will say, hey, Perri, welcome back. Are you asking about your upcoming flight on X? Would you like to upgrade your seat? Do you want to add a meal? Do you want to pay for your baggage now? Their ability to turn a support inquiry into a revenue-oriented conversation allowed them to drive an 8x increase in their ancillary revenue. I think it’s just a great example. You have so much data at your fingertips already. There’s so much you can do with what you already have to not only the customer experience but drive business value as well.”
By Marisa Garcia
Note: Please note that quotes were edited for clarity.
The aviation industry is rebounding from the pandemic with flights having resumed and passenger confidence rising. There still, however, remain many challenges for airlines, airports and ground handlers stemming from the coronavirus and its latest variants – be it due to labor shortage, ever-changing governmental regulations or highly volatile air traffic. Therefore, from continued unexpected contingencies to labor-related issues, effective planning and resource management has never been more important. That is where optimization software, driven by advanced technologies such as hybrid Artificial Intelligence (AI), Machine Learning and proprietary algorithms, has proven an essential solution.
Addressing the “What Ifs” with Staff & Equipment Planning Software
For airlines maintaining on-time arrivals and departures is critical. Managing multiple resources from staff to equipment and planning for their effective utilization requires sound planning. Similarly, ground handlers must content with various operational disruptions, intercepting and resolving them quickly. For airports to function optimally, both airlines and ground handlers too must operate efficiently. Without this, there is a domino effect which has negative consequences across all areas. Helping to drive better planning is feature-rich optimization software. It supports optimum workload and shift demand planning, infrastructure utilization. For example, an airline leveraging AI-driven planning software can be applied to develop long-term, mid-term and short-term resource planning scenarios for staff and equipment. It can improve the assessment of flight schedule changes using “what if” analyses. It can drive significant improvements across many areas. They range from customer service, gate services and passenger bus services, to aircraft services, aircraft movements, loading/unloading, baggage services, cargo line maintenance, crew transport and turnaround supervision.
By applying staff and planning software, many benefits can be derived. They include:
Better adherence to Service Level Agreements (SLAs) with SLA-based planning
Maximization of resource revenues
Optimal balancing of airport, airline and passenger demands
Improved service times and safety performance
Reduced capacity-related delays
Enhanced customer service achieved by more consistent, reliable operations
Flexible Shift Schedules
When it comes to supporting optimal flight schedules, managing staffing fluctuations is critical. Employee illness, family needs, workers being detained due to a major traffic jam, or other contingencies can arise at any time, causing a last-minute disruption to a shift schedule. The pandemic has only increased these circumstances. Robust planning software facilitates the automatic planning of rosters with built-in flexible shift times so that fluctuations in staff requirements can be managed. The software provides precise demand forecasts and target staffing level capabilities that reflect flight schedules.
Optimized Workforce Planning
Pre-pandemic labor shortages have been further exacerbated by increasing staff absenteeism due to individuals contracting COVID-19 and forced to endure quarantine periods. In addition, we have seen many staff members fired due to their failure to comply with vaccine mandates and others who have resigned from their jobs because of these mandates. Leveraging advanced workforce planning solutions, airlines, airports and ground handlers gain agile decision-making support to achieve appropriate staff levels, improve management of work volumes and related staffing capacities, support work process guidelines and improve forecasting of future human resource demands. These solutions facilitate the development of optimized staff schedules, which not only help management meet critical staffing demands, but also enables staff to secure schedules that best address their preferences. This, in turn, helps promote increased staff satisfaction, productivity and retention.
Today’s most advanced software solutions incorporate extended monthly planning features that enable planners to perform their role covering periods of six weeks instead of having to develop plans to address four to six individual scenarios to cover this timeframe.
User-Friendly, Feature-Rich Solutions
Color-coded weekly visualizations, enhanced Gantt chart, user-friendly navigation and other features support ease of use and convenience. As a result, planners can optimize their time, planning and decision-making to develop effective schedules to a high degree of precision and detail. They can easily create alternate plans, schedules and what if scenarios that maximize efficiency and resource utilization. When accompanied by robust employee portals, optimization software enables workers to easily log in to view their work schedules and any schedule changes. This is in contrast to tedious paper schedules having to be distributed to employees and changes communicated verbally. Mobile apps further support online workflows, quick roster assignments, workload adjustments and the easy, digital communications of this information.
Pertaining to COVID-19 status, a digital tracking capability of the most advanced workforce management solutions allows for COVID-19 positive cases or those deemed suspect to be entered into the system to mark infected or potentially infected employees for quarantine and blocking from work assignments.
Among the projections planners can now achieve with AI-driven staff planning software are:
Workload demand by qualification
Impact of using part-time staff
Workload characteristics such as work volume and peak periods
The software also helps planners in answering key question such as:
How can we maintain or increase service levels?
What are the relevant flight and workload key performance indicators (KPIs) for internal communications?
Workforce Management Solutions
In addition to advanced planning solutions, workforce management software solutions empower planners with the ability to address a myriad of criteria ranging from an organization’s corporate culture and governance requirements, to its service level agreements (SLAs) and government and industry regulations. These solutions deliver critical performance features, including:
Daily working time demand planning that accommodates an airline’s, airport’s and/or ground handler’s needs in updated real-time
Staff vacation planning functionality which captures, verifies and automatically approves vacation requests, while balancing them with minimum staffing requirements
Automated schedule creation and publication that supports various planning strategies (i.e., fixed shift patters, free rosters, working time flexibility, use of external service providers, etc.)
Categorization and management of staff absences, while automatically checking them against SLAs
Informing employees regarding schedule changes, while continually monitoring planned and actual deviations
Communication of each employee’s deployment status via an employee portal
Classification and aggregation of working time, payroll, accounting, timesheet data processing and corrections, and working time evaluations
Creation of reports and dashboards
Easy changing of business requirements without the need for programming.
Supporting the Recovery
While the industry has a long way to go to return to its pre-pandemic levels of operation, a recovery is clearly underway. Challenges, however, have persisted. For example, the new year started off with a rash of flight cancellations. In the United States alone, over 8,000 flights were cancelled from January 1st through January 3rd, impacting more than one in ten scheduled flights based on data from the tracking service, FlightAware. Many of these cancellations came as a result of the surge in coronavirus infections among staff members. Major weather events have also wreaked havoc on airline operations. These and other disruptions will always be factors the industry must address. What is helping the industry better address the “what if” challenges are optimization software solutions that facilitate greatly improved resource planning.
Dr. Wolfgang Vermöhlen, Product Manager Aviation Division, INFORM GmbH
During the closing keynote panel on Day One of the World Aviation Festival, London 2021, a panel of airlines and experts in distribution updated attendees on their progress with NDC programs and answered questions on how the COVID crisis has affected the pace of new programs to improve distribution and merchandising. There was almost unanimous agreement that the crisis had helped accelerate these programs.
The expert panel consisted of Mike Croucher Group CTO The ATCORE Group; Steve Domin, CEO and Co-founder Duffel; Bas Hooft’t, Distribution Director Merchandising, Air France/KLM; Tina Larson, Director Online Travel Agencies and Distribution Hawaiian Airlines; Antii Tolvalnen, Vice President Revenue Management and Pricing, Finnair; and Sebastien Touraine, Head, Dynamic Offers, IATA.
“Back in 2020—the beginning of the crisis—we asked as part of the distribution Advisory Council..what we should be doing..”
As IATA’s Sebastien Touraine explained, “Back in 2020—the beginning of the crisis—we asked as part of the distribution Advisory Council..what we should be doing. They said, please don’t stop NDC. And actually, some of the airlines have been using this crisis to reflect and to use some new capabilities—continuous pricing has been a key investment for some.”
Tina Larson, Director Online Travel Agencies and Distribution Hawaiian Airlines, shared: “Prior to COVID, we just started getting traction on new merchandising initiatives, NDC, and marketing projects. Then COVID struck. I remember the day that our flights went to 13% of our original size, thinking COVID would kill every single one of these projects. But I have to credit our leadership team because they came to us and said, ‘Don’t stop. You guys need to keep moving. Because when we come out of this, we need to be more agile, more nimble, and we’re going to have to fiercely compete in the whatever the new normal is.’ Since then, we have invested heavily in data. Our data was an absolute mess before. We had disparate sources—my data and your data mentality. We worked together as a commercial team to build out this commercial data domain, and from there, we talked about what we wanted to do with this. That led to our revenue management team upgrading our revenue management system, expanding our merchandising capabilities…we took advantage of the downtime to double down on the plumbing. Restructuring is going to be so important when we’re back fiercely competing.”
Antii Tolvalnen, Vice President Revenue Management and Pricing, Finnair, suggested that the momentum to improve distribution will be ongoing, and COVID crisis or not, as part of the airline’s core objective—to reach the end customer and meet their needs.
“What’s behind the transformation that we are doing?”
“What’s behind the transformation that we are doing? It is not a digital transformation or a distribution transformation. It’s a transformation of the business model from B2B to B2C. We must keep in mind that we try to serve our customers. That is the main target. Then, of course, all those customers will not find our content on our direct channels. They’d rather use an agent or an OTA, a Meta channel, or something like that. Then it’s essential for ourselves as a sales channel. Again, we must think about how our products find the customer. I think this will be something that will add value to the whole value chain, but maybe some weights in the value chain will change in future. That might be a painful transformation to get [through], but I think we just have to make sure that everyone understands that we are just talking about the customer in the end.”
Bas Hooft’t, Distribution Director Merchandising, Air France/KLM, suggested, “GDS is morphing towards the aggregator models…we need them to get our reach out there. We’ve never said this is not about the interaction or moving everything direct. We need travel agencies. We are a global company. We are connecting a lot of passengers around the world. We can’t be everywhere, and there’s a role for aggregation in the marketplace. But that model is changing. We announced our Amadeus contracts, and this week we’ll announce another one.” Air France/KLM announced a new NDC Distribution agreement with Travelport. “We are also leaving space for new aggregators.”
Steve Domin, CEO and Co-founder Duffel, said they have also seen a lot of activity on NDC during this downturn. In terms of the company’s role in the new distribution landscape, Domin said: “At the end of the day, the work that we do as intermediaries, or aggregators, in the broadest sense of the term, is understanding the needs of the airlines and the products in a way that it an agent can do individually. I think we’re spending a lot of time and resources on the technology side to make that product available in the best possible way for the travel agent. Since the GDS have done that for a long time, we are trying to do it on new rails.”
“Every airline in the future—as the service tends to get more sophisticated—I expect will have different requirements of what they expect to personalize that offer.”
Domin believes there are opportunities to bundle over types of content. “Products like insurance are very popular. That’s an enormous opportunity for the airlines to push insurance through the NDC channel.” On the complexities of integrations, he said, “I think I kind of look at the problems in two ways. One is the complexity for us understanding the product that the airlines are pushing, then breaking it down to the travel agents in the way that they can display it, [but still] in the way that the airlines envision it. The other side is how can we get the data to the airlines that they need to create these dynamic offers. Every airline in the future—as the service tends to get more sophisticated—I expect will have different requirements of what they expect to personalize that offer.”
In the end, though, airline distribution is always about getting very complex information to be digestible by consumers logically, in a way that is easy to process, shop, compare, and book. That consumer demand for simplicity and ease of shopping is the key differentiating factor, in terms of competitiveness, regardless of the distribution channel. The critical engine of progress in airline distribution is a never-ending quest to simplify flight search.
As Mike Croucher Group CTO The ATCORE Group put it, “We’re nine years into NDC, and it’s coming to fruition, and people integrate in that way…When NDC was first there, they played off on the GDS and put their channels in place. And now they’re doing deals with the GDS to distribute NDC through it. The initial NDC proposition was to avoid aggregators, and now we’re seeing aggregators aggregate NDC content because it’s complex again, and they’re taking the complexity out. So I think there’s always going to be platforms to take the complexity out of distribution.”
By Marisa Garcia
Closing Keynote Panel: Delivering on the promise of Retailing, Dynamic Offers, NDC and the future of One Order?
The aviation industry was among those most impacted by COVID-19. While the industry is still reeling under the pandemic’s aftereffects, we can also begin to spot accelerated technological innovations that would have otherwise taken years.
Technology is evolving at lightning pace, making it a great time to embrace it, emerging as a future-ready, intelligent airline. Airlines can tap technologies like Artificial Intelligence (AI), Machine Learning (ML), big data, assistive technologies, mixed reality, NLP, cloud computing to derive the following benefits:
achieve operational excellence through real-time actionable insights
overcome interdepartmental silos
develop interoperability and collaboration
captivate many other smart decision drivers
Sounds great, but the obvious next question is about the ‘how.’ How do you leverage tech? Let’s find out.
How can airlines use technology to succeed in the post-COVID world?
Here are some tech-enabled steps that can add value:
From the curb to the gate in 30mn, with an almost touchless experience at the airport.
Augment ancillary sales yields by using intelligent merchandising platforms.
Create an ideal baggage handling experience by leveraging digital bag tags and advanced technologies.
Optimize turnaround processes by using computer vision and machine learning (ML) models.
Reduce the impact of disruption by identifying the early stages of disruption and optimizing a recovery plan.
Decrease maintenance and engineering efforts through predictive and prescriptive analytics to avoid unplanned maintenance and overhead expenses.
Automate back-office jobs by leveraging Robotic Process Automation (RPA).
Such an intelligent airline can be a perfect blend of smarter people, optimized processes, and state-of-art technology. This article will explain how airlines can sculpt the future of air travel by focusing on a seamless customer experience and intelligent operations.
Seamless airline customer experience.
Customer experience is the new battlefield where airlines can use the latest technologies as their most potent weapons. They are now discovering how AI and ML can improve customer experience and meet modern customer demands by focusing on personalization.
With rapidly evolving mobile technologies and ease of connectivity, new-age travelers have developed a habit of exploring, connecting, and buying on the go. The attention span of today’s buyers is also quite limited, implying that the current way of non-personalized engagement will not work. Airlines need to rethink how they can sell according to the evolved market conditions and traveler expectations. Fortunately, AI-enabled technologies have the power to make this happen. As has already been proven in the retail industry, contextualization, and personalization—two related AI technologies— have made consumer engagements much more successful.
In AI-based personalization, the system learns the user’s likes, dislikes, and preferences to create personas and customer segmentation.
AI-based contextualization means that the system considers the current situation and circumstances with general world knowledge, which often affects the decision for or against a specific option.
Airlines can use AI to develop an intelligent merchandising capability that combines personalization and contextualization in real-time. This helps determine the most relevant offerings that meet customers’ travel needs. It also maximizes the conversion rate and gives a one-click buying experience to the customers.
At the same time, digitally mature airlines have begun adopting IATA standards such as New Distribution Capability (NDC) and one order to modernize their product retailing and create a transparent buying experience. NDC gives airlines the capability to easily sell ancillary and rich content directly to aggregators like OTA and GDS through a set of standard XML APIs.
Apart from NDC’s capabilities, AI models can also help airlines build an intelligent and advanced retailing system to offer more value to the customer. NDC enables airlines to sell flights and ancillaries in a retail way. AI-based technologies allow airlines to add a personalized and contextual wrapper to achieve a higher look-to-book ratio, allowing airlines to transition from non-personal selling to retail-driven personalized selling.
Inlaying agility in airline operations
Airline operations are complex and have many challenges like inter-departmental silos, manual processes, and low collaborations. These challenges then lead to operational inefficiencies. Innovative technologies can help by creating an intelligent airline ecosystem and inlaying agility into operations. Let’s examine three such areas.
Enabling data-driven insights and collaboration
Airlines can build a collaborative ecosystem of integrated operations with a well-informed and connected workforce. Empowered digital employees increase productivity, break internal silos, and produce cross-functional insights. AI/ML data used in real-time for predictive analysis and operational recommendations ensure increased efficiency. All airline processes – crew management, passenger management, turnaround operations, baggage management – can be made more efficient and reliable using data and AI/ML-driven technologies.
For example, an airline can leverage computer vision and machine learning technologies to enable reliable turnaround management. The flight turnaround process is crucial for every airline. It should be optimized to reduce delays, save costs and satisfy customers with on-time flights. The turnaround of aircraft comprises all tasks that occur from arrival to departure. These activities include boarding and disembarking passengers, cabin cleaning and catering, aircraft maintenance and refueling, loading and unloading cargo, security checks, etc. Various stakeholders (boarding staff, BMA staff, security, ramp agent, OCC, controller) collaborate to ensure an on-time flight. However, this objective often fails because they often lack a common source of information and are not connected at all times. Now, imagine, what if they could be?
Airlines can leverage computer vision and AI/ML to build a model that associates each task with an object visually identified from the camera stream at the airport. The following table depicts the tasks:
This model can connect all the dots, simultaneously evaluating the performance of the turnaround activities, alerting stakeholders if a process has not yet started or is likely to be delayed.
The use of AI/ML has created many such use cases, which has significantly improved the efficiency and predictability of the airline’s operations.
Digital M&E functions
Any airline’s engineering function offers a vast scope for digitization, potentially saving costs and increasing productivity and safety. One such area is the digitization of maintenance records. Airlines must maintain detailed aircraft usage and maintenance records, including any changes made to the aircraft’s configurations and components. Any failure to comply or not manage records properly can directly impact the aircraft’s resale value and increase the time of returning the leased aircraft to the lessor. Enter RPA!
Robotic Process Automation (RPA) can be used to identify missing paperwork, data entries, and inaccuracies. The maintenance process can be streamlined by digital maintenance records, increasing visibility, and access (anywhere). This data can then be shared with internal audit teams and third-party MROs to plan scheduled maintenance. Airlines can also use AI/ML on these data insights for proactive and predictive analysis to reduce unscheduled maintenance overheads.
Another use case involves using smart glasses for aircraft inspections and recording feedback through audio recording and pictures from smart glass. This can significantly accelerate the overall process by not only making it error-free but also hassle-free.
Minimize disruption impact
IROPS (IRregular OPerations) is a situation in which a flight doesn’t operate as scheduled. The cause may be bad weather or technical faults or crew shortage or delayed connecting flights or anything else, leading to flight delays and cancelations. Often, the effect of the disruption is enormous as it affects passenger experience, crew duty times, along with a loss of revenue and reputation.
Airlines, as per the preferences and availabilities, adopts various recovery methods simultaneously to overcome these impacts, such as:
Delaying subsequent flights by a few minutes, keeping in mind the minimum connection times and crew duty limits.
Re-allocating passengers by moving passengers to other available flights.
Swapping resources when aircraft or crew members are unavailable for the next flight – other available aircraft or crew at the same airport replace the original ones.
Utilizing any reserved resources that are generally kept on standby.
Upgrading and downgrading an aircraft.
Dead-heading and ferrying aircrafts: The airline crew is transported to a disrupted airport as a passenger, and a empty plane is hauled to attend to an unscheduled flight.
So far, many airlines have struggled with two challenges:
a) Evaluating the exact impact of disruptions
b) Choosing the appropriate recovery method that can reduce the overall commercial and reputation impact.
While the methodologies to predict potential IROPs situations and plan better are quite limited, AI/ML technologies have opened a new dimension. With real-time data insights, AI/ML-based predictive models can help airlines identify the early stages of disruption and measure their impact over the short and long term. These inputs can also optimize schedule recovery (including aircraft, crew, slots), connections (including passengers). This enables a passenger-centric recovery approach that reduces the overall commercial and reputational impact of disruptions.
Clubbing the IROPs methodology with a customer personalization engine can elevate the quality of service. IROPs-impacted customers can receive some specific services based on their history and consumer preferences, potentially converting an otherwise stressful experience to a much better one.
The advent of innovative technologies opens new avenues for airlines in the field of passenger service and digital operations. It is time to board the seamless, intelligent airline driving innovation through disruptions. Are you ready to take off on the future of aviation? Nagarro’s digital and aviation expertise can help you reach new highs. Reach out to them at firstname.lastname@example.org to discuss more!
Historically, the relationship between airlines and travel agencies was one in which the airlines truly had all the power. The travel industry at that time included a highly fragmented set of agencies for distribution and each one of those agencies had their own segment of the market. During this time, the airlines, the travel brands themselves, had most of that control.
Today OTAs have grown into global entities with massive reach and the ability to scale infinitely to capture as many customers as possible. This upended the control of the value chain to where the brands, the airlines, no longer had the same standing that they did before. The disruption this caused in the travel industry persists today.
OTAs have been able to commoditize the airline, creating no differentiation in their products, or in the airline’s brands. Airlines struggle to bring offers in front of customers at all the various touchpoints, whereas OTAs can present offers at every touchpoint, including powerful comparison-shopping tools. OTAs have intercepted airlines’ customers and captured an outsized percentage of travel demand.
The opportunity to “Undisrupt”
When COVID-19 hit, non-essential travel came to a halt and the travel industry was severely affected. As a result, OTAs reduced their spending in paid media and on innovation, creating an opportunity for airlines to close the gap and move a higher percentage of sales to their direct channel.
Direct sales are not only more cost-effective, but they also build brand loyalty between the passenger and airline and provide more leverage to the airline in the market overall. When passengers purchase flights through OTAs, airlines become a commodity to the customer.
“Airlines have recognized for years the importance of driving online direct sales to reduce dependency on Online Travel Agencies for market share and own the relationship with the customer. This increases loyalty and lifetime value of their passengers,” said Seth Cassel, Co-Founder, and President of EveryMundo. “COVID-19 has been damaging for airlines, but it has also been a wake-up call: airlines must do more to own their customer relationships directly, and they require technology from partners such as EveryMundo to accelerate this effort. We are seeing energized motivated airlines use our fare marketing software like never before.”
We believe now is the time for airlines to take advantage of this unique opportunity by prioritizing customer acquisition and direct sales to drive customer lifetime value. It is time for airlines to “undisrupt” the industry and take the power back from OTAs. A key factor in capturing travel demand is improving the customer experience, including user engagement technology, enhanced visualization in offers, calls to action, and more that supersedes that of OTAs. By utilizing technology airlines can increase website traffic, improve booking conversion rate, enhance online user experience, reduce their dependance on OTAs, and drive brand engagement on and off the airline’s website.
Using Machine Learning based AI technology to drive tangible commercial results for airlines, hotels and other travel companies.
Revenue potential. Tangible, explainable results. Commercial viability. It’s the holy trinity for any sales and marketing team, but not always easily quantified when assessing new technology. Travel companies assessing how to use AI to cross-sell and upsell to their customers want to know what return they can expect.
The psychology of selling has been used for generations in the person-to-person sales process – both face-to-face and over the phone. The advent of digital selling removed an element of the ‘personal’, with many websites producing a static shopping experience, ignoring who the user is as an individual. The scientific approach of finding “a way to market to [customers’] current needs and wants” is, put simply, lacking in many online shopping environments.
Digital companies know the value of human interaction and connections in the sales process, but often struggle to translate that value into actions online. Using Artificial Intelligence, an airline website can transform itself into being always relevant – to each and every user.
Consider your user journey
Rarely do your customers wake up in the morning, think ‘I’d like to fly from Paris to New York next week’ and book after the first search they make. Like any purchase decision, there’s a customer journey when someone decides to travel. At varying speeds, a potential customer will cycle through different stages of intent: Looker, Planner, Booker and, finally, Customer. These stages represent opportunities for an airline to communicate with the user. Consider what messages you would like to present at stages of your specific selling journey, as a customer is planning, booking, pre-flight, in-flight, in-destination, and post-flight. Maybe not everything should be sold directly in the funnel.
Machine Learning powered AI learns from thousands of data points, identifying in real-time the stage each of your online visitors are at. Using AI to cross-sell products and services can transform your website, driving real-time merchandising in a seamless way.
For an airline direct channel: AI tools can predict the users who are open to adding hotels, transfers or rental cars, and present these options at the salient moments in the customer journey, increasing the likelihood of purchase. The right time, the right format, the right offer. These may be different for each and every person and different each time they travel.
Technology in action: a use case for airlines
The challenge many companies face with new technologies is understanding how it can benefit the bottom line.
While still seeking to broaden revenue some have declared airline retailing a failure, others have bolted on third parties or rafts of options for the unwary consumer. Yet what is the best way to “sell” these items without distracting the user who wants to make a simple seat-only booking?
The short answer is that tailored ML driven AI can help personalise merchandising and the online digital shopping experience on an airline direct channel.
Philosophy: Once airline decision makers see that it is possible to infer immediate desires and actions for each client in real-time it opens up an entirely new way of thinking. Maybe the current need of a client can be responded to more accurately by understanding what they want right now than trying to understand what they wanted last time they travelled.
Relevance: Our technology assesses each online user on an individual basis, using thousands of data points to paint a picture of their desired travel experience. Simultaneously, the AI calls upon product profiles to select the most relevant hotel or other holiday element, displaying it in changeable areas of your website and digital sales platform to users it identifies as being open to the possibility of add-on purchases.
Realising Commercial Priorities: You’ve decided to use AI to cross-sell on your airline’s website. Commercial product steering is possible to help you reach targeted KPIs. Are there specific hotels or ancillary products you would like to prioritise during a certain travel window? Do you have offers that you only want to display to families or repeat customers? Or are their airports you wish to prioritise?
Guiding rules: AI is capable of modelling and explaining your entire audience. Eligibility rules for offers and products to be displayed can be set to accelerate learning – taking advantage of the existing knowledge of experts in commercial teams. These can be brought to life at scale as the AI learns in real-time what works. This can then work to deliver productive and profitable actions to the entire audience.
Self-learning: Customers expect personalised content and relevant information. By showing different recommendations in different placements at different stages of the user journey, the algorithms continuously learn what offers and products appeal to specific customer profiles. They use these learning cycles to refine what is presented, testing a new product, message or placement, to maximise uptake. This real-time evolution encourages a fast testing and experimentation environment, letting analysts tweak business rules and priorities to maximise return and drive revenues.
The process of selling is dependent on relationships. Relationships involve listening as well as talking. Your customers need to trust what you sell and how you sell it. By using AI to cross-sell online – showing relevant products and services to the right user at the right time – you can grow your sales in a targeted way.
This all starts with real-time measurement of intent. Learning how to value this takes time, effort and experience. We can help you develop the approaches required to prove out your incremental revenue, to explain your results and to ensure that your individualisation initiatives are commercially viable.
If this is a relevant subject for you and your business, we would be happy to welcome you at our booth D32 for a chat and exchange of thoughts. We are keen to learn from your experiences and challenges. Let’s discuss what it takes to drive conversion, approaching individuals versus segments, improving ancillary sales and reducing churn – leading to happier customers and loyal friends of your brand.
The aviation industry is hugely important for people and the economy. At the same time, it bears a high level of responsibility for our environment. Airlines are currently undergoing a huge transformation toward sustainability. As a tech company and airline IT provider, Lufthansa Systems is committed to identifying our own environmental footprint and improving that of its more than 350 customers worldwide to actively shaping the green shift in aviation. In this interview, Olivier Krueger, CEO & Chairman of the Board of Lufthansa Systems, discusses how digital solutions can drive green innovation and help achieve international climate goals.
The world is demanding a new and more sustainable approach to the travel industry. What role do new technologies and digitalization play in tackling the challenges of climate change?
OK: Innovative technologies are an essential tool on our journey to a sustainable future for aviation. We want to trigger solutions that optimize operational processes along the entire travel chain and reduce carbon footprint. The key is to combine data sources, gather insights on environmental impacts and develop intelligent software. While powerful IT solutions already support climate-sensitive planning and decision-making, we are only at the beginning of what we can accomplish. To drive innovative approaches forward, we are working across divisions to combine in-depth industry knowledge with forward-looking technological expertise.
Can you give us a specific example of how smart solutions support a more sustainable industry?
OK: There are several ways to improve the air travel industry’s environmental footprint. Flight routing, for example, has a direct and substantial effect on fuel consumption and carbon emissions, with smart planning and calculations that allow us to minimize these effects. Our flight planning software Lido Flight 4D calculates the most efficient flight route, taking into account all current, flight-relevant data. This enables airlines to reduce flight times and costs and save up to five percent of the fuel required compared to other solutions in the market, generating annual savings of around 270,000 tons of carbon emissions for a network carrier. Another example is network design and planning. Our NetLine/HubDesigner uses the available fleet and demand patterns to create a network optimized for low carbon emissions by adding penalties for such emissions and enhancing fleets with partner flights and intermodal traffic alternatives.
Another way to adopt more sustainable approaches is to digitize the aircraft. With our electronic charting solutions, we are helping airlines to achieve a paperless flight deck. This has reduced our printing volume by 75% in the last three years, which corresponds to savings of around 100 tons of paper over this period. However, a paperless aircraft consists of more than just the flight deck. Our ongoing efforts to increase connectivity in the cabin led us to develop a wireless in-flight entertainment platform. This helps airlines to digitalize seat pockets by transforming content into a digital service delivered directly to passengers’ devices.
While there are many more examples I could mention, let me highlight another facet that I am particularly proud of. We are part of the Lufthansa Group’s CleanTech Hub, which accelerates the implementation of clean technologies within the Group’s airlines and fosters collaboration with external pioneers.
Can you tell us more about the CleanTech Hub?
OK: Climate protection is a challenge for all of us, and we can only make a difference by working together. The CleanTech Hub is a virtual center of excellence, a platform that connects the Lufthansa Group’s airlines and subsidiaries as well as start-ups and research institutes. It is an inspiring space for collaboration that facilitates, motivates and stimulates clean technology and sustainability initiatives by providing access to resources, augmenting initiatives and accelerating the time to market. At the end of the day, the goal is to drive green technologies that reduce carbon emissions, non-carbon, noise and waste emissions of Lufthansa Group flight operations while at the same time changing behaviors, scaling up, and future-proofing our industry. The CleanTech Hub consists of five focus areas and I am proud to be the sponsor of the ‘Digital Solutions and Procedures’ focus area. We work cross-functionally to bring IT capabilities and knowledge leaders together.
What role does data play in driving forward this green transformation?
Data is the only way forward. Collaboration between regulators, airports and airlines should be at the top of the agenda, because mutual exchange and transparency offer an excellent opportunity to access a vast source of data. But the work does not stop there. The industry needs to go one step further by making good use of this data. Adopting machine learning and AI-powered automation tools helps to create a more efficient decision-making process. Our IT experts support airlines on this journey together with our start-up zeroG, which is dedicated to unlocking the intrinsic power of data to improve the world of aviation.
Given the current global circumstances, airlines now benefit more than ever from automated optimization solutions that result in significant cost savings, increased operational stability and reduced environmental impact. To give one example, preventing contrails can significantly reduce aviation’s impact on global warming and climate change. Based on new weather data and specific rule sets, we are working closely with our partners to develop an optimizer that can avoid ice super saturated regions and in doing so prevent the generation of contrails.
Anyone who would like to learn more about the role of data in achieving sustainability targets might be interested in joining me in the panel discussion about “How do we achieve ambitious industry sustainability targets and what role can (sharing) our data start-ups play in this?” on Wednesday, December 1 at 3:35 PM at the World Aviation Festival in London.
Before we close, do you have a piece of advice that you would like to share with industry colleagues concerning the sustainability agenda?
In 2019, we experienced an aviation infrastructure pushed to its limits, both at airports and in the air. Then the COVID-19 pandemic swept the globe and triggered an immense crisis in the aviation industry, causing travel restrictions and volatile demand. The huge transformation currently underway in the airline industry represents our best chance to address climate change. It is imperative that we move toward a greener future for aviation, and the discussion about how to get there is finally picking up speed. The current transformation process should incentivize us to rethink our industry and take inspiration from these promising developments. Our way forward is simple: together, we must act responsibly today for a sustainable tomorrow, and I invite all of our colleagues to join us on this journey to shape a more sustainable future.