Letsfly Co-founder – 3 Key Elements For Airlines & Retailers To Improve Distribution Strategies
The travel & airline industry always undergoes a rapidly changing commercial landscape. Understanding how to navigate it is a key component of success.
One of the biggest challenges airlines face is the shifting dynamics between carriers and their distribution partners. Could this be a sign of fragmentation for airline distribution? If so, then could there be signs of reaggregation emerging on the horizon?
GDS to NDC and Direct API
GDS has historically dominated the distribution market, and airlines must seek flexible and cost-effective distribution solutions and other alternatives. As a result, Next Generation Distribution Solutions (NDC, Direct API) surged in popularity as they offered more agile adoption methods.
However, there are still critical aspects that require special attention, and airlines and retailers must first know how to analyze them, before defining their approach. And that begins by looking beyond the traditional solutions, and preparing for success by knowing how to effectively adopt a New Distribution Solution.
How to prepare for success with a New Distribution Solution
Kelvin Fu, Co-founder of Letsfly (a provider of high-quality content so airlines and travel organizations lower distribution costs and reach new markets), believes that the New Distribution Solution model presents both challenges and opportunities. Which is why he states that it’s important for airlines and retailers to first understand three key aspects to prioritize their efforts.
The 3 critical elements airlines and retailers must prioritize
How to cover more markets at lower costs for airlines
How to support the sales of diversified products more flexibly, such as ancillaries and bundles
How to ensure a satisfactory ticket purchase and post-sales service experience for travelers under the New Distribution Solution
To achieve success, companies need to focus on important areas such as expanding market coverage while reducing costs, supporting the sales of diversified products like ancillaries and bundles, ensuring a seamless customer experience throughout the ticket purchasing process and post-sales services, and assessing technical performance and effectiveness.
According to Kelvin Fu, Co-founder, Letsfly:
“It’s crucial to have a distributor with extensive and quick market coverage, who can establish direct API connections, and handles the entire case, this especially means post-service. Only in this way will distribution strategies be optimized in the New Distribution Solution model”
How to solve the 3 critical key elements:
Ensure your distributor has extensive and quick market coverage.
Reduce third-party process, build direct API connection with distributors.
Partner with a distributor that provides end-to-end solutions to your case.
By focusing on these key aspects and collaborating with distribution partners – airlines and retailers can be in a position to adapt in this rapidly changing landscape. Through this, they optimize their distribution strategies and provide a better overall experience for their customers.
“It is essential to pay attention to issues such as market coverage, product diversification, customer experience, and technical performance to succeed in a rapidly changing market. By doing so, airlines and retailers can benefit from greater efficiency, cost savings, and customer satisfaction.” – Kelvin Fu, Co-founder, Letsfly.
New Distribution Solutions have been around for some time, but airlines always need to adapt to changing consumer preferences and seek to diversify their product offerings. As a result, more airlines have been adopting lightweight and flexible distribution methods, moving away from the traditional GDS model. While this trend was initially led by low-cost carriers looking to save costs, it has evolved into a more fragmented market.
Flexible, Adaptable, and Tailored Solutions
To tackle this issue, Letsfly offers tailored solutions that are more flexible and adaptable. The goal is to offer airlines and retailers a distribution solution that helps expand market coverage while keeping costs low, support the sales of diversified products, ensure satisfactory customer experiences, and improve technical performance.
“New innovations will continue to emerge and disrupt the industry, as more companies are open to adopt these solutions. Those who understand how to navigate this landscape successfully can expect to achieve greater efficiency, cost savings, and customer satisfaction.” – Kelvin Fu, Co-founder, Letsfly.
Collaboration and Customer-Centric Strategies
As with any industry, the travel, aviation and hospitality sector will always continue to evolve, and collaboration with distribution partners is key to success in this ever-changing industry. Airlines and retailers must be open to embrace new technologies and collaborate closely with their distribution partners to achieve success.
Many new companies are emerging to innovate and potentially replace the traditional GDS’s position, and become the new dominant solution. So it is important for airlines and retailers to work together with their distribution partners.
This will help to foster long-lasting relationships with customers in order to remain competitive in an industry that is constantly changing.
In the end, success in the travel industry is all about the customer. By investing in strategies that are customer-centric and tailored to their needs, airlines and retailers can build long-lasting relationships that will keep customers coming back for more.
It won’t be an easy road, but those willing to embrace change, experiment with new approaches, and collaborate with their distribution partners will be the ones that thrive in it.
Letsfly is an innovative company focused on providing high-quality content to travel organizations while helping airlines lower their distribution costs, reach new markets and maximize profit. Its mission is to improve travel distribution with cutting-edge technology and provide long lasting value to its customers. The company was founded in 2014, with headquarters in Beijing (China) and offices in Hong Kong, Sydney, Singapore, and Dublin.
Seamless Air Alliance and GSMA collaborate to “bring mobile roaming to the skies”
This week, it was announced that the Seamless Air Alliance and the GSMA are collaborating to “accelerate the availability of seamless mobile roaming onboard commercial airlines.”
The cooperation between the pair represents a significant step in the journey towards a smooth connectivity experience for passengers, bridging the gap between data roaming in the air and on the ground.
The Seamless Air Alliance was founded by Airbus, Delta, OneWeb, Sprint, and Airtel and drives the development and implementation of Global Standards for Inflight Connectivity. Collaborating with the GSMA, a global organisation unifying the world’s mobile ecosystem, has potential to significantly accelerate the accessibility of seamless mobile roaming onboard commercial airlines.
In the press release, Jack Mandala, CEO of the Seamless Air Alliance said:
“Working with the GSMA positions us in front of over 750 mobile network operators and other service providers, paving the way to open dialogue and cooperation in bringing roaming services to airlines worldwide. The agreement with the GSMA is a ringing validation of our goal to bring seamless connectivity to airlines and their passengers.”
Adding to this, Alex Sinclair, CTO of the GSMA said:
“We’ve come a long way since the first SMS was sent in 1992, but even now there is no guarantee that airline passengers can connect with their contacts on the ground during a flight. Our collaboration with the Seamless Air Alliance will facilitate and accelerate agreements between airlines and MNOs around their own route network to improve connectivity. We are excited to work with members of the Seamless Air Alliance to bring mobile roaming to the skies and deliver the best possible customer experience for airline passengers”
Working together, the pair are aiming to create a scalable framework for establishing commercial roaming agreements between respective members and bring roaming to the world’s airlines.
Takeoff with AI: Five Reasons the Airline Industry Should Embrace AI
Technology is revolutionizing the way that businesses interact with customers, streamlining operations and uncovering new opportunities for growth. Artificial Intelligence (AI) is playing an increasingly important role in the airline industry, allowing businesses to take advantage of a range of benefits that enable them to stay competitive and profitable. By leveraging the power of AI, businesses can gain a competitive edge in the airline industry and identify new opportunities for success.
The use of AI in the airline industry has seen an impressive increase in value, from $152.4 million in 2018 to an expected $2,222.5 million by 2025. This upward trend is likely to continue as the industry evolves and businesses seek to remain competitive and profitable.
Here are the top five reasons to use AI in the airline industry:
1. Optimized Operations
Airline companies can optimize network planning, adjust flight schedules, and manage aircraft capacity to maximize efficiency and reduce costs using AI. This can help airlines to better manage fuel consumption and emissions. AI can also be used to automate routine tasks and processes, allowing airlines to focus on more important tasks.
2. Improved Customer Service
AI can provide personalized service to customers, such as recommending travel itineraries and providing real-time information about flight status and delays. AI chatbots can also be used to answer customer queries and resolve issues quickly and efficiently. This can help improve the overall customer experience and increase customer satisfaction.
3. Revenue Optimization
Gathering detailed insights on customer demand is an essential prerequisite to optimize the revenues and margins of the overall network of any airline. As such, solutions that harness the power of AI are a clear competitive advantage for airlines – under the right conditions, they can bring highly accurate forecast capabilities that can be leveraged to make better informed decisions, and ultimately have direct impact on the bottom line both from a revenue and cost perspective.
4. Cost Savings
By leveraging AI-driven automation, airlines can reduce operational costs and increase operational efficiency, leading to a substantial increase in profitability and market competitiveness.
For instance, airlines can automate their inventory management, pricing, and revenue management processes to optimize their operations and reduce the risk of overbooking, which has a high cost per offloaded passenger, not to mention a very poor customer experience. AI algorithms can analyze historical data and current market trends to make real-time pricing decisions, thus reducing manual labor and human errors. This can also lead to increased sales and revenue uplift.
In addition, AI-powered predictive maintenance can help airlines identify potential aircraft malfunctions before they occur, leading to fewer flight cancellations and maintenance costs. AI can also streamline operations, such as baggage handling and check-in, leading to a reduction in staff and labor costs.
By embracing AI, airlines can unlock significant cost savings and gain a competitive edge in the market, making it a worthwhile investment for any airline looking to stay ahead in the industry.
5. Increased Scalability
AI can help airlines scale up their operations quickly and efficiently. This technology can be used to automate customer service inquiries and other processes, streamlining workflow and allowing airlines to focus on more important tasks. Additionally, AI can be used to provide predictive analytics and insights that can help airlines identify potential opportunities and make decisions more quickly and accurately. With the help of AI, airlines can stay ahead of the competition and be up-to-date with the latest trends.
AI has the potential to revolutionize the airline industry. By automating routine tasks, making better decisions, improving customer experience, and optimizing maintenance, AI can help airline companies become more efficient, cost-effective, and competitive.
Three start-ups to look out for at Aviation Festival Asia: Optimisation through advanced technology
Aviation Festival Asia gathers together industry giants, start-ups, and everyone in between to drive innovation in the aviation industry. The event is an opportunity for start-ups to get noticed and for influential industry players to forge business partnerships in the Asia Region.
Advanced technologies such as artificial intelligence and software solutions play a significant role in optimising operations throughout the aviation industry. With these, costs can be reduced and outcomes maximised. Here are three start-ups, facilitating optimisation within the industry.
1. Motulus.aero
Optimal solutions for a world in motion. Motulus provides business software solutions that specialize in optimizing crew and aircraft. Such software is critical to run large-scale, daily operations in a cost-efficient and productive way maximizing crew satisfaction, reducing operational disruption and minimizing the environmental impact. The solution leads to significant cost savings, week after week. Motulus software streamlines and accelerates the workflow to design, plan and operate these logistic operations and provides in-depth analytical insights. Motulus.aero was formed in 2018 by a group of mathematical experts who specialize in building solutions deploying the latest scientific and software developments.
2. Speedcargo
Speedcargo Technologies brings innovative solutions that use computer vision technologies, advanced algorithms and artificial intelligence to transform the air cargo operations of Airlines and Ground Handlers. The technology was developed from research undertaken at Technical University of Munich (TUM) – CREATE in response to an industry requirement initiated by the Civil Aviation Authority of Singapore (CAAS). We developed, tested and deployed the technology in live operations and demonstrated the world’s first fully automated, robot-packed cargo pallet. In 2020, SPEEDCARGO Technologies Pte Ltd. incorporated as a Singapore-based deep-tech startup and launched products for digitization and optimization as crucial first steps towards automation.
3. Synaptic Aviation
Synaptic Aviation at Work. We provide unprecedented visibility into ground operations; avoid delays, lower injuries, minimize damages, and operate at your best. With the help of artificial intelligence you gain control of turnaround activities to prevent avoidable service failures and become predictive over time.
Track activity
Real-time alerts
Video database
Insightful dashboards
These three start ups will be at Aviation Festival Asia at the end of the month. To find out more about these and many other start-ups, get your ticket here.
Hong Kong air passenger traffic thrives with the relaxation of travel restrictions
Airport Authority Hong Kong (AAHK) recently announced the January 2023 air traffic figures for Hong Kong International Airport (HKIA). The numbers speak to a strong recovery following the relaxation of COVID-19 related travel restrictions.
The announcement showed passenger traffic reaching 2.1 million in the first month of 2023, a year-on-year surge of 28 times. Reportedly all passenger segments grew substantially following the relaxation of travel restrictions towards the end of 2022, but the most significant increases were recorded with passengers moving to and from Southeast Asia and Japan.
The Airport Authority added:
Due to the relaxation of travel restrictions, all passenger segments experienced significant growths, particularly Hong Kong residents, compared to the same month last year […] Strong passenger demand was observed in the second half of the month due to the Chinese New Year holiday. The re-opening of the Mainland market to international travel also drove a recovery in passenger traffic between Hong Kong and Mainland China.
The start to a strong recovery is visible in these latest figures with the airport handling over 80,000 passengers daily at its peak last month. This volume of passengers is representative of approximately 40 per cent of pre-pandemic levels. Notably, international passenger flights also increased from 4,427 to 10,665 year-on-year, up 141 per cent.
The figures supplied by AAHK marking a promising start to the new year and bode well for the reopening of the region more broadly.
At Aviation Festival Asia next week a CEO panel will discuss “What is the future of the Asian aviation industry as we come out of the pandemic and how will further digital technology adoption, sustainability, collaboration, and new business models help shape the outlook for 2023 and beyond?” Get your ticket now to be a part of the conversation.
Smart airline retailing: The new merchandising and revenue frontier
During the pandemic, when air passenger traffic was at an all-time low, a few smart airlines demonstrated record-breaking sales by earning even more than 50% of their revenue from their ancillary products and services. Indeed, ancillary sales revenue is no longer seen as an airline’s secondary option. Instead, it has now taken a front seat in the airline business model.
In this context, we need to note that the traditional way of retailing does not cater to today’s tech-savvy customer who is information-rich but time-poor. In the current era of disruptive technological changes and a highly commoditized travel world, airlines have a cut-throat competition where products and services that may be cutting edge today can become outdated soon.
Adopting the advanced retailing concept in the airline industry is going to be one of the biggest transformations in the industry.
Customer loyalty is not what it used to be. With increased transparency on comparative prices and easier access to booking tools, travelers are increasingly loyal to those that provide the best prices and experiences. These fluctuating trends and rising consumer expectations make it challenging for airlines to keep up with the changing times.
The USP in this competition is the outstanding customer experience that revolves around a customer-centric approach. This allows an airline to deliver a positive and personalized experience at every stage of its customer journey. They can interact with customers based on their needs, adopt a fact-based approach to decisions using customer data as a primary source of insight, and embrace new channels to build a customer-focused culture, creating value across the way.
Many forward-thinking airlines have already embarked on adopting smart merchandising strategies to deliver a tailored, personalized, and seamless experience to individual travelers.
Smart merchandising strategies driven by an AI-based retail rule engine
In this blog, we will attempt to explore various best practices, frameworks, strategies, and techniques for an airline to deploy a successful merchandising strategy. This strategy will deliver exceptional customer experiences along with higher conversion rates.
The mantra behind successful merchandising revolves around five key areas, and they are:
Identify the right personas for your travelers
Contextualize your offer in real-time
Deploying the best packaging techniques
Target the right time and stage of the journey
Deliver a seamless digital experience
1. Define the right persona for your travelers
An airline caters to millions of passengers in a year. Every customer has unique needs and has a different perception of products and service values. If you understand those differences and are flexible in how you offer the services they need, you can gain a competitive advantage.
Customer segmentation is a strategy to divide customers into various groups or personas having similar characteristics, wants, and needs.
Traditionally, airlines used to segment customers based on the booking class, which today holds limited relevance and doesn’t reflect complex passenger behavior. To overcome this challenge, airlines can leverage technologies like artificial intelligence and machine learning to develop self-learning models which analyze the below-listed factors and self-calibrate to optimize the personas.
Geographical: Country, state, climate, food habits, etc.
Demographic: Age, gender, marital status, family size, nationality, ethnicity
Behavioral: Spending pattern, price sensitivity, need for flexibility, loyalty index, CLI
At the same time, each persona defined by the airline must be:
Measurable: In terms of volume, purchasing power, and other characteristics, an airline can predict as well as target the revenue and profit a segment can make.
Accessible: The persona is easily accessible so that the airline can approach them.
Differentiable: Each persona must be unique and reacts differently to the market mix.
Actionable: Airlines be able to provide value to the segment.
A good segmentation strategy should have a persona for each passenger category and reveal underserved segments. For example, an airline receives most of its bookings from guest users, and the airline does not possess any historical data individually for these customers. But, by using engaging factors like demographical and geographical, airlines can achieve segmentation. In a recent survey conducted with an airline, it was discovered that young travelers between the age of 18-35 going from Oslo to Switzerland during winter had shown an affinity towards XL baggage for carrying their skiing kits. So, using such insights, airlines can target customers with similar personas to elevate sales.
2. Contextualize your offer in real-time
Now that we know each traveler’s persona has specific needs, the second step is to set the right context so that the customer understands the value that a recommended ancillary is going to deliver. For example, a business executive taking an early morning flight from an airport that experiences a high passenger load around the time of departure can open an opportunity to sell fast-track ancillary.
Contextualizing helps the traveler understand the benefits of the offer then and there.
Airlines can tap into such opportunities by leveraging an intelligent merchandising engine. These build a knowledge graph for each persona to understand their affinities towards ancillaries. They then evaluate it with real-time contexts like load factors, routes, flight duration, and peak hours through a robust scoring algorithm for ancillary recommendation across various stages of the travel lifecycle. Doing so significantly improves the likelihood of making a purchase hence, delivering a higher conversion rate.
3. Deploy the best packaging techniques
Airlines use various offer creation and packaging techniques like bundled ancillaries, unbundled ancillaries, and hybrid bundling (branded fares) to personalize an offer. Each of these techniques plays a role when targeted to the right customer. Branded fares or bundled ancillaries deliver a simple approach to building an all-inclusive fare, reducing the complexity of choice and making comparison and purchase decisions easier for passengers. But at the same time, with evolving customer expectations, it is a huge challenge for an airline to decide which ancillary items to bundle and which items to offer separately.
The best-fit package results in value to the customer and higher per-passenger revenue for the airline.
Deploying an intelligent merchandising engine that can generate multidimensional insights on ancillary sales performance across all channels and travel lifecycles can help revenue managers optimize their packaging techniques or even take a step ahead to tailor the bundles in real-time for a customer.
4. Target the right time and stage of the journey
Airlines can maximize their ancillary sales by encouraging customers at various stages of their travel lifecycle, beginning from the inspiration that starts the planning in the first place, all the way through the booking process, to pre-and post-trip engagement. Each stage offers a unique upsell or cross-sell opportunity that a traveler may consider.
The most important thing that airlines need to keep in mind here is to offer the customer the right product at the right time.
Not everything can be sold during the booking; travelers develop their needs as they proceed. Airlines can use their data to understand customers’ specific needs to determine the behavioral factors, purchasing patterns, and affinity factors for each persona.
The choice of the product can be determined by the customer persona and contextualization. In contrast, the stage of the journey should be targeted, considering when it will be needed the most. On the other hand, the choice of the channel can be determined by the accessibility factors, and the price should prove to be a good value to the customer – it should neither be too high nor too less.
For instance, a family of four going for a week-long summer vacation would be interested in booking a hotel room at the time of flight booking. A few days before departure, when they start packing, they might opt for extra luggage and finally may need a taxi on the day of departure. Whereas a backpacker who is a price-sensitive traveler may look for a cozy hostel room at the time of booking and may be interested in some good adventure deals as per destination.
5. Deliver a seamless digital experience
Delivering a one-click buying experience that enables customers to make informed purchases can be a differentiator among competitors. Along with the perfect offer, an airline should focus on the user experience they deliver to the customer.
The user experience should be fast, easy, and intuitive so that a customer can easily navigate to buy and manage their purchases.
An average user experience can easily make customers disinterested, even if they see a good offer. On the other hand, a good user experience delivers high-quality content and information about a product, which in turn converts lookers into bookers.
Airlines need to understand the challenges associated with different distribution channels, primarily indirect and direct.
Indirect channels
From a customer perspective, shopping through an indirect channel provides a disjointed user experience where they are not presented with personalized offers and don’t have access to the products they could purchase from an airline. From the airline’s perspective, they have to manage multiple EMDs for the ancillary purchase per ticket while distributing via a GDS channel.
Direct channels
To overcome these challenges, digitally matured airlines have adopted IATA standards such as New Distribution Capability (NDC) and ONE Order to modernize their product retailing and create a transparent shopping experience. NDC allows airlines to easily sell ancillary along with rich content directly to aggregators like OTA and GDS via a set of standard XML APIs (which was not possible earlier) and get away with the challenges of EMD issuance for ancillary purchases.
The capabilities of NDC clubbed with AI models can help airlines build a smart & advanced retailing system that offers customers a better product and more value. NDC enables airlines to sell flights and ancillaries the retail way, and AI-based technologies enable the airlines to add a personalized and contextual wrapper, so you are selling the right thing and have a higher look-to-book ratio. This enables the airline to transition from non-personal selling to retail-driven personalized selling.
Conclusion
The power of digital airline retailing is no more a secret. Revenue managers have identified its real potential and are leveraging it to target more sales. As we enter the digital revolution, the right set of techniques along with technologies like AI/ ML and big data could be the first step towards deploying successful merchandising strategies towards building a great customer experience and path to profitability.
Perth Airport set to open a virtual reality lounge
This May, Perth Airport will be introducing a Gaming Point VR lounge delivered by Travel Point Group. The lounge will transform the waiting process with access to a hi-tech, VR gaming experience. Located at Terminal 1 International before customs and security screening, the lounge will be accessible to all domestic and international passengers as well as the general public.
Unusually, the lounge will include one immersive VR escape room for up to five players per session, with each session lasting 30-45 minutes. Additionally, people can choose from a range of individual high-speed internet gaming stations linked to the steam network allowing players to continue on from their own accounts or enjoy solo gaming options as newcomers.
Growing rapidly, the VR market generated 4.7 billion USD in 2022 and, according to Deloitte research, will generate an estimated 7 billion USD by the end of 2023. The technology already has multiple existing applications within the aviation industry ranging from entertainment to teaching. However, it remains “relatively niche” amongst the general population for the time being, with an active installed base of just 22 million in 2023. This novelty is partly where the airport VR experience can tap in to this growth area, offering people a new experience in an unexpected setting.
Looking towards the future, Graeme Stewart, Director of Point Group said:
“Point Group is in advanced discussions with many major airports around the globe to deliver exciting new experiential offers using virtual reality and high-speed gaming facilities.”
Wanting to create new experiences in airports that move beyond eating, drinking, and shopping, Gaming Point began as an ambitious step to introduce VR gaming into an airport setting. By May, the lounge will offer a innovative, collaborative experience for passengers, whilst simultaneously diversifying the retail offering at Perth Airport.
The flight to stability: learning from the financial markets to inspire robust technology in the airline industry
The financial markets have seen remarkable growth and success in recent years, driven largely by the adoption of advanced technology infrastructure and automation. In the world of high-frequency trading, speed and efficiency are essential, and the transition from manual to electronic trading systems has been crucial in meeting these demands.
By enabling faster and more efficient trading, electronic systems have increased liquidity, tightened bid-ask spreads, and lowered trading costs, all of which have helped to drive growth and profitability in the capital markets. The benefits of automation and advanced technology infrastructure extend beyond just the financial markets, with other industries, such as the airline industry, beginning to explore their potential.
However, the airline industry is still grappling with outdated systems that are not equipped to handle the volume of data and volatility inherent in the industry. Recent events, such as the COVID-19 pandemic, the Southwest Airlines computer outage and Lufthansa IT failure, have exposed the industry’s limitations. Thus the capabilities of the financial markets’ systems provide a valuable example for the airline industry to follow.
The financial markets have developed robust technology infrastructure, utilizing state of the art technology available at every period, including advanced machine learning algorithms and AI, which enable high-frequency trading and automated trading. These systems can process vast amounts of data with hundreds of millions of actions per second and operate on millisecond timescales, all without crashing. By implementing cross-industry technologies like ML algorithms and AI, airlines, even though lagging decades behind financial markets, can modernize their infrastructure and move towards more efficient and stable systems, enabling them to make smarter decisions based on real-time data and predictive analytics.
The potential benefits are significant. By leveraging third-party vendors, airlines can streamline and optimize their operational processes, resulting in cost savings of up to 10-20%. Furthermore, according to a recent ‘Precedence Research’ report, the implementation of AI in the airline industry is projected to grow at a CAGR of 35.38% from 2022 to 2030, offering a significant growth opportunity for airlines to enhance their operations and improve the passenger experience.
The benefits of implementing new technology and infrastructure upgrades extend beyond operational efficiency and increased profitability. By modernizing their systems, airlines can also enhance the passenger experience. For instance, airlines can leverage data analytics to personalize the travel experience for each passenger, offering customized services and recommendations based on their preferences. Additionally, AI-powered chatbots and virtual assistants can help passengers navigate the booking and check-in process, reducing wait times and improving overall satisfaction.
While the airline industry faces several challenges in modernizing its technology and infrastructure, cloud-based systems that offer remote control and easy onboarding, along with third-party vendors, can provide a flexible and scalable solution for airlines to optimize their operations while reducing operational risk.
According to a report by Allied Market Research, the aviation analytics market was valued at $2.78 billion in 2020 and is projected to reach $8.21 billion in 2030, registering a CAGR of 11.72%.
In conclusion, the aviation industry can modernize their technology and infrastructure with cross-industry technologies like ML algorithms and AI, as well as by collaborating with third-party tech enablers. This can enhance operational efficiency, reduce delays, improve the passenger experience, and increase profitability. By adopting these innovative strategies, airlines can make smarter decisions based on real-time data, leading to higher revenue and stability. This will give them a competitive edge in the industry and enable them to stay ahead of the curve.
Article by Dr. Uri Yerushalmi, Co-Founder and Chief AI at Fetcherr, Former CEO and Head of AI for a major algo trading firm. Three decades of experience in software development and AI.
What to expect at Aviation Festival Asia with Aurore Duhamel
Aurore Duhamel works on digital innovation in a large airline and is a Community Manager of French Tech Blockchain (FT Blockchain). As a digital business leader with extensive experience in crypto payments, blockchain, NFTs, Web3 strategy, and aviation Aurore is well positioned to contribute to the discourse on digital payment ecosystems at Aviation Festival Asia.
On day two of the event, Aurore will be moderating a panel titled ‘How can airlines keep up with fast-paced digital payment trends.’ This panel involves the Head of Payment Facilitation Solutions at IATA, the Chief FinTech Officer at AirAsia, the Payment Strategist at Singapore Airlines, the Global Head of Travel & Airlines, Digital Commerce at Worldline, and the Director, Airlines at Mastercard. Aurore will facilitate the discussion exploring topics including FinTech capabilities and the importance of creative payment partnerships.
Listen to the five minute audio interview to hear Aurore’s take on why the APAC region is so exciting, what key trends to look out for at Aviation Festival Asia, and what to expect from the digital payment trend panel.
Lufthansa becomes the latest in a string of tech-based failures causing travel chaos
Lufthansa has cancelled over 1,200 flights scheduled for today as airport workers execute planned strikes across seven German airports including Frankfurt, Munich, and Hamburg. This is the second, deeply disruptive incident the German airline has experienced this week.
On Wednesday, an IT failure for Lufthansa airline stranded thousands of passengers, cancelled over 200 flights, and delayed over one hundred more. The “group-wide IT system failure” caused travel chaos with passengers reporting the company was forced to resort to manually organising the boarding of planes as it could not process luggage digitally.
The cause of the IT failure was identified as damaged fibre optic cables which were mistakenly cut by engineering works on a railway line in Frankfurt.
This incident comes as the latest in a string of recent tech-based failures. In December, Southwest’s outdated optimisation technology contributed to their mass cancellations over the holiday season costing the airline a predicted $825 million. Weeks later, a glitch in the FAA’s computer system caused thousands of flights across the US to be grounded disrupting approximately 10,000 flights.
Although the cause of Lufthansa’s recent tech failure differs slightly from these two cases in the US, the incident again highlights the disruptive results of tech-based failures. As airlines continue to develop their digital offerings, it is imperative they maintain updated, efficient, and reliable technology.
As mentioned in an exclusive interview with industry analyst Henry Harteveldt, the recent operational problems suffered in December have “sparked some rethinking and re-examination among some Asian carriers about their technology investments and prioritisations.” Henry highlighted this as one of the key topics to listen out for at Aviation Festival Asia at the end of the month. Here, at the region’s most important aviation technology conference and exhibition, leaders of the world’s airlines, airports, and their most senior executives in charge of software and services will gather. To be a part of the conversation, get your ticket now.
The latest interactive, AI-powered retail experience at Changi Airport
A partnership between Pernod Ricard Global Travel Retail and Lotte Duty Free has produced a unique, AI powered, experience redefining retail in an airport setting. This “first of its kind” for an airport space, pushes the boundaries of retail with its combination of technology, personalisation, and imagination.
Encapsulating the world-famous airport’s customer focused and technology driven vision, the 33-square-feet boutique has a range of immersive experiences and services for passengers, including an AI ambassador, digitalised merchandising units, robot bartenders, and VIP tastings.
“We are proud to launch the Martell AI-powered boutique, which harnesses the power of data and technology to deliver personalized customer-centric experiences; a key tenet of the Changi Airport retail experience.”
Located in Changi’s Terminal 1 Lotte Duty Free store, the interactive exhibit features the ‘Martell Untouchable Taste’ tool, which “guides shoppers through the Martell range, and provides personalized tasting recommendations based on their preferences. This recommendation is then sent to the Martell robot bartender, who proceeds to serve the desired beverage to the customer.”
With Changi consistently positioning itself at the forefront of innovation, the integration of this “retail theatre” continues to elevate the airport experience though new and engaging technologies.
IBS Software survey identifies the shortcomings of airline retail
Yesterday, IBS Software released new survey results highlighting the shortcomings of airline retail in its current form. The data identifies multiple areas where airlines are failing to capitalise on ancillary revenue and points towards the industries setting expectations of the online buying process. With 83 per cent of respondents planning to fly to a leisure destination in the next six months, the value in refining the experience to align with customer expectations is self-evident.
As discussed by Paul Byrne, VP iFly Retail at IBS Software, updating is crucial to remaining competitive.
“As more and more industries invest in Amazon-esque tactics to compete for consumer spend, it’s important airlines don’t pass up the opportunity on the table.”
Key insights from the survey include:
93 per cent of consumers would buy services like excursions and car rental from their airline in they could.
56 per cent of recent flyers would buy additional services from an airline if the booking and checkout online shopping experience was closer to that of fashion retailers and online food shops.
36 per cent of those asked said booking a flight online is more time consuming and complicated than other online retail experiences.
10 per cent of recent flyers said they would book all elements of a holiday with their airline if they could.
24 per cent of people surveyed said the main benefit of booking multiple elements of their trip in one transaction would be having all confirmation details in one place
19 per cent of people surveyed said the main benefit of booking multiple elements of their trip in one transaction would be having one provider to deal with if something goes wrong.
The survey covers 2,000 consumers who have travelled by air for leisure in the last 18 months with 1,000 respondents from the US and UK respectively.
What to expect at Aviation Festival Asia with Henry Harteveldt
Henry Harteveldt is one of the world’s best-known travel industry analysts and President of Atmosphere Research Group, a company providing market research and analysis to the global travel industry. With over a decade’s experience in identifying emerging travel trends, Henry is well-equipped to discuss the landscape of the industry at the event making perceptive observations and encouraging thoughtful analysis.
In this short ten-minute interview, the Atmosphere Research Group President highlights a few aspects of the Asia-Pacific region which make it so consequential for the wider evolution of the aviation industry. Moreover, the Atmosphere Research Group President shortlists some key conversations to look out for in the “open, honest, and unfiltered” discourse at Aviation Festival Asia.
Henry will be participating in multiple sessions at Aviation Festival Asia including:
Interviewing Haoyu Dai, Divisional Vice President Digital, Singapore Airlines Limited on how the industry can accelerate digital solutions that optimise operations and improve the customer experience while overcoming challenges of legacy systems.
Interviewing Kerem Kiziltunc PhD, Chief Information Officer at Turkish Airlines on digital ambition at the airline
Moderating the closing keynote digital product panel with the General Manager Digital at Cathay Pacific Airways Limited, CCO at TUI, and Chief Digital and Information Officer at IndiGo.
Moderating the CIO panel on ‘how are airline CIOs in Asia are prioritising investments as we head further into 2023 to meeting passengers digital demands and deliver on sustainability efforts?’ with Turkish Airlines, Singapore Airlines, and Virgin Australia
Moderating a panel of Aviation tech Asia innovation going into 2023 – time for a new mindset? With Lufthansa Innovation Hub, Starburst Accelerator, and Singapore Airlines
Moderating a panel on ‘how can we as an industry fully embrace cloud modernization and enterprise transformation to usher in a new era of operational efficiencies, better customer experiences, and actional data insights’ with Bamboo Airways, SpiceJet, ET AL, and SriLankan Airlines.
Interviewing Ayman Aboabah, CEO King Abdulaziz International Airport, exploring the airport’s vision for 2023 and beyond with digital transformation and capacity expansion.
Interviewing Hari Marar, MD and CEO Kempegowda International Airport Bengaluru on how the design of T2 reflects the world’s biggest changes as a result of the pandemic.
Moderating the CEO panel on entering Asian airports’ post-pandemic era of unprecedented digital transformation, collaboration, innovation, and reimagined business models with Kempegowda International Airport Bengaluru, SITA, and King Abdulaziz International Airport.
If you want to see Henry’s sessions and other unmissable talks, interviews, and panels get your ticket here. To see a previous interview with Henry, click here.
Four start-ups to look out for at Aviation Festival Asia: Payments
Aviation Festival Asia gathers together industry giants, start-ups, and everyone in between to drive innovation in the aviation industry. The event is an opportunity for start-ups to get noticed and for influential industry players to forge business partnerships in the Asia Region.
With new technologies, shifting demands from customers, and pressure points highlighted by the pandemic the payments landscape is changing. These four start-ups each approach the broad topic of payments from a different perspective, addressing payment management, payment options, refunds, and more with a new and innovative outlook.
1. Aeropaye
Aeropaye is developing an autonomous smart flight refund engine for airlines, travel agents, travel management companies and passengers on delayed or cancelled flights, integrating Blockchain distributed ledger technology, smart contract components and the IATA direct connect New Distribution Capability (NDC) protocol. We compete in the growing airline ticketing industry valued at $776.9 billion.
Airline tickets are stuck in a technological bottleneck. Coordinating purchases, transfers, settlements on delayed and canceled flights and payments across hundreds of airlines, agencies, and countries is expensive and inefficient under the current system.
The Aeropaye DLT component is an amazing technology that allows for easy, near instant, trustless collaboration between different parties with a common goal. These difficulties of the travel industry is the perfect environment to apply it in. Aeropaye travel tickets smart tokens have immediate benefits like fast transactions, instant settlements, and more efficient collaboration between all the parties.
2. Happy Fly Limited
Happy Fly Limited (HFL) is an Insurtech MGA based in London offering unique insurance and technology solutions to Airlines to mitigate the financial and administrative burdens of EU261 Flight Delay Compensation exposures.
HFL has developed flexible and innovative insurance solutions designed to mitigate an Airline’s financial exposure to their current, future and historic EU261 compensation liabilities and cap EU261 to a single predictable cost.
In addition, HFLs unique Payments+ secure cloud-based claims portal autonomously manages, validates, and verifies passenger EU261 claims as well as paying compensation to passengers anywhere in the world.
HFL feel that they are well positioned to assist Airlines in the Post-Covid environment, where Airlines are under pressure to restructure into leaner more efficient and cost-effective operating models. The solutions HFL can deliver to Airlines will reduce liabilities to increase borrowing potential as well as providing financial certainty and balance sheet protection, which together with HFLs Payments+ Claims Portal, will be a paradigm shift in customer service and deliver significant cost savings to Airlines worldwide.
3. SeatCash
SeatCash is an innovative travel lifestyle technology company delivering an improved travel purchase and management experience to consumers and travel suppliers. Bringing 100+ years of combined travel industry experience, the SeatCash team is using technology to disrupt the frustrations of today’s travel environment utilizing the latest in predictive sciences, AutoML, and FinTech innovation.
4. Wowpay
Wowpay Pte Ltd is a payment orchestration service provider which enables customers to manage multiple payment gateways and processors across the globe through a single API. Wowpay’s proprietary rules-based engine has been proven to help airlines save costs in managing their payment stack by reducing the time it takes for multiple payment methods to be integrated and channelling payments to the lowest cost processor.
All this can be done by little to no-code on Wowpay’s dashboard. Wowpay can handle not just payment processing but also fraud detection and management settings. Back by a team of experienced travel technologists, Wowpay understands the challenges faced and value demanded by airlines.
These four start ups will be at Aviation Festival Asia next month. To see how these and many other start-ups can enhance passenger experience, get your ticket here.
Yesterday, the Lufthansa Group announced the introduction of a new product: The Green Fares. This is the Group’s latest addition to its sustainable travel portfolio.
According to the press release, the fares “will make it possible to fly more sustainably in the future with just one click.” Outlining how ‘The Green Fares’ offset flight-related CO2 emissions, the Group explained “this is achieved by using 20 percent Sustainable Aviation Fuels (SAF) and 80 percent by contributing to high-quality climate protection projects.”
Christina Foerster, Member of the Lufthansa Group’s Executive Board responsible for Brand and Sustainability said:
“People don’t just want to fly and discover the world – they also want to protect it at the same time. […] The product launch is an important building block in our efforts to make air travel more climate-friendly.”
From tomorrow, the new fare will be available on over 730,000 flights per year across Lufthansa, Austrian Airlines, Brussels Airlines, SWISS, Edelweiss, Eurowings Discover, and Air Dolomiti.
According to Harry Hohmeister, Member of the Lufthansa Group’s Executive Board and responsible for Global Markets and Network, The Green Fares were tested for flights from Denmark, Sweden, and Norway last year and uptake indicated a growing demand for more sustainable travel offers.
With regards to difference in price of these fares, Reuters reported Hohmeister say it would be impossible to say in general how much more expensive tickets would be, but that they would be “noticeably” more.
Would you be willing to pay more for your plane ticket for the offsetting measures The Green Fares will take?
London Heathrow reports its busiest start to the year since the pandemic whilst keeping security queues low
Today, the UK’s busiest airport announced over 5.48 million passengers travelled through Heathrow in January making it the “strongest start of the year since the beginning of the pandemic.”
The majority of travellers passing through the airport were from the European Union (EU) – 1.62 million, followed by passengers from North America – 1.21 million. These represented a 135 per cent and 120 per cent increase in passenger traffic respectively.
Despite EU and North American travellers composing the two largest groups of passengers for the airport in January, the APAC market demonstrated the largest growth compared to last year according to Heathrow’s figures. With 764,000 passengers in January 2023, number of travellers at the airport from the APAC region were up 181.3 per cent compared to the previous year.
Importantly, despite the strong passenger recovery the airport also reported the congestion problems in the airport had been resolved with “98 per cent of passengers waiting less than ten minutes for security in January.”
The airport is also trialling eGates for children ages 10 and 11 in Terminal 5 which will continue the airport’s progress towards establishing “smooth and seamless journeys.”
Reporting on the month’s passenger traffic, CEO John Holland-Kaye said:
“Heathrow is back to its best, with passenger satisfaction scores meeting or exceeding 2019 levels. We are giving a warm welcome to families over the half-term getaway by delivering excellent service and bringing back the magic of travel.”
What to expect at Aviation Festival Asia with Mike Arnot
As highlighted by Mike Arnot in this discussion, many players in the APAC region are at the cutting edge of digital marketing and communication with their customers. Considering this, insight from these industry leaders could enrich practices across the globe. Mike Arnot, Principal at Juliett Alpha is involved in several of the marketing strategies & branding sessions taking place at Aviation Festival Asia at the end of the month.
The Juliett Alpha Principal is:
Moderating a CMO panel reconsidering marketing priorities as airlines rescale and emerge as internationally relevant brands. The session includes the CMOs of Saudia, Korean Air, and Virgin Australia as well as the APAC Managing Director for EveryMundo.
Interviewing Amad Luqman Mohd Azmi, Chief Executive Officer Airline Business, Malaysia Airlines about Malaysia Airlines’ outlook on digital marketing for 2023 and beyond.
Moderating a panel on devising digital marketing tactics to create iconic branding which will speak to 2023’s target online audiences. This panel includes the Director of Customer & Brand, HK Express, Chief Executive Officer Airline Business, Malaysia Airlines, Head of Marketing and Communications, Beond, and Digital Manager – Omnichannel Orchestration, Cathay Pacific Airways.
In this short interview, Mike explains his approach to these, detailing what delegates can expect to gain from attending and explaining how he intends to move beyond “Marketing 101” in the sessions.
To see Mike’s sessions and other unmissable talks, interviews, and panels get your ticket here.
Capital A have announced they are replacing their AirAsia Virtual Allstar (AVA) with ‘Ask Bo,’ a new chatbot with enhanced artificial intelligence (AI) and machine learning capabilities (ML).
CEO Capital A, Tony Fernandes said:
“We thank AVA for her achievements in handling more than 113 million guests since 2019, and handling over 43 million queries in 2020 at the peak of Covid. Given the size of the airline that AirAsia is, with thousands of refunds and flight change requests, humans alone cannot cope, we have to also use technology. We learned through AVA how to use artificial intelligence to answer complex and sizable queries better and faster.”
The new chatbot, Ask Bo, has been constructed over the last eight months, learning from previous years what users wants and what their most common requests are.
Kesavan Sivanandam, Chief Airport and Customer Experience Officer, AirAsia Aviation Group highlighted some of the new features of the chatbot. These include live updates on flight status, push notifications for on the day changes of operations, baggage information including tracking, arrival belt, and mishandled baggage report. Furthermore, Ask Bo will give passengers more autonomy helping them to change flights and request refunds and from March, provide access to a human agent.
As AI and ML play an increasingly prominent role in the customer experience aspects of aviation, the technology is continuously being honed and refined. It will be interesting to see how AirAsia customers respond to the new chatbot.
At Aviation Festival Asia 2023, Tony Fernandes will be giving the keynote interview on understanding how and why the airline industry needs to digitally diversify and what AirAsia have in store in 2023.
“The industry left 2022 in far stronger shape than it entered,” reports IATA
This week, the International Air Transport Association (IATA) released their report on passenger demand recovery for the final month of 2022. The results show that air travel recovery continued through December, concluding a solid year of progress for the industry.
IATA’s Director General, Willie Walsh said:
“The industry left 2022 in far stronger shape than it entered, as most governments lifted COVID-19 travel restrictions during the year and people took advantage of the restoration of their freedom to travel.”
The figures showed the following progress towards pre-pandemic (2019) levels across the entire year.
Total traffic in 2022 reached 68.5 per cent of 2019 levels.
International traffic reached 62.2 per cent of 2019 levels.
Domestic traffic reached 79.6 per cent of 2019 levels.
Looking specifically at the final month of the year highlights the differing rates of recovery across the measured traffic.
Total traffic in December 2022 rose 39.7 per cent compared to December 2021, reaching 76.9 per cent of December 2019 level.
International traffic increased 80.2 per cent in December 2022 versus December 2021, reaching 75.1 per cent of December 2019 level.
Domestic traffic rose 2.6 per cent over the previous year and reached 79.9 per cent of December 2019 traffic.
Promisingly, Asia-Pacific airlines showed a 363.3 per cent rise in full year international traffic compared to 2021 finding itself to have, “the strongest ever year-over-year rate among the regions.”
Noting that the industry had a promising resurgence in 2022, Willie Walsh cautioned against travel restrictions and border closures as a response to the spread of disease.
Technology, retail, and distribution. An interview with Richard Engelmann, Regional Vice President, Asia, Oceania, and India at Japan Airlines
Before Aviation Festival Asia, Richard Engelmann, Regional Vice President, Asia, Oceania, and India at Japan Airlines joined for a conversation around retail, distribution, and the impact of new technology on the industry.
Throughout the interview, Richard shared his personal views on the evolution of airline retail and distribution, drawing on a rich and varied career within the industry. Towards the end, the Regional Vice President also answered some more specific questions on Japan Airlines’ approach to sustainability and growth amongst international travellers.
Commencing with a broad discussion around non-aviation specific technological advancements, Richard discussed the potential these hold for the aviation industry. Ranging from ChatGPT to digital identities, advancements in other sectors are a useful reference point for the aviation industry.
As the conversation moved towards tech developments within airline retail and distribution, Richard raised some nuanced observations concerning culture. Here, drawing on personal experience, the impact of cultural differences on rates of tech adoption and customer expectations were highlighted, providing a subtle balance to the discussion.
In the course of the interview, an array of topics were covering including predictions for the future of distribution, post-pandemic expectations, and customer experience. The entirety of the interview lasts 45-minutes. However, the below index can help to navigate to specific areas of the conversation.
Index
Richard Engelmann’s introduction and background [0.38]
Discussion around ChatGPT and its potential uses in the aviation industry [3:25]
Question: Are there any specific developments in tech and innovation that you are excited to see in airline retailing and distribution? [6:30]
Exploring the cultural nuances of travel [10:45]
Question: Can you highlight some of the ways that technological innovation is already improving experiences for customers in the retail space? [13:30]
Discussion surrounding the adoption of technology and how it is received [16:10]
Question: Is there a pattern to how we have seen distribution evolve over the last five years? [19:25]
Question: How do you expect to se distribution advance in the future? [21:50]
Question: How have you seen customer demands and expectations shift since the pandemic? [27:45]
Question: Does technology play a role in meeting post-pandemic expectations? [31:50]
Question: Could you give me an overview of how you make Japan Airlines attractive to international travellers? [33:20]
Question: Would you be able to talk a bit about sustainability and Japan Airlines? [36:35]
Japan Airlines’ sustainable charter flight [40:05]
Question: Why are you joining us at Aviation Festival Asia? [42:10]
Richard Engelmann will be joining us on the retail track at Aviation Festival Asia on 28 February to talk about these topics and more. The interview will cover, ‘Exploring the evolution of digitalised airline distribution’ and Richard will also sit on a panel discussing ‘Developing strategies which optimise the use of existing technologies within distribution systems.’ To hear these session and a diverse range of opinions from other key industry players, book your ticket here.
