3 Growth Zones for Airlines: How to Use Technology to Empower the Industry
The global crunch in air transportation is already sending shockwaves through the industry. The protracted pandemic and economic crisis triggered problems that are now widely on display. Whether the shock is generated by a staff shortage or increased peak demand, the core question is the same: do airline systems have the capacity and tools to mitigate the impact and go beyond? To answer this question, Mike King (DataArt Strategic Relationships Director) and Apurva Mathur (DataArt VP Strategic Accounts) shared their thoughts on how technology can fuel growth for 3 strategic zones of opportunity.
Growth Zone 1: Post-Covid Wanderlust and Peak Demands
Due to the lifting of Covid restrictions and significant industry resource shortage, this summer’s travellers have faced airport chaos, cancelled flights, lost luggage and hours-long queues. Although overall passenger numbers are still below 2019 levels, traffic has become more concentrated during peak periods. June 2022 international RPKs reached 65.0% of June 2019 levels.
For example, Heathrow managed to grow the passenger service team and provide more space for passengers, after starting recruitment in late 2021. However, increased departing passenger numbers and a large number of flight cancellations resulted in a significant reduction in the level of service at the airport.
Additionally, overall passenger satisfaction dropped across nearly all measures (down more than 20 points from a year ago). Research from IATA found that 80% of passengers were not ready to wait more than 3 minutes to register their baggage, which created additional pressure on airlines.
Solution: Data Management to improve customer experience
The good news is that cross-industry Data Management can help address some of those issues and help build a more complete experience for travellers. Airlines have already invested in new data consolidation and processing tools, informing travellers of any flight issues and delays in real-time. Increased AI/ML adoption during all stages of the journey could distinctly improve the traveller’s experience. Large-scale legacy systems transformations that involve various data types and sources can be complex, but can enable significant benefits including:
- Predicting disruptions: When data from air traffic control, airlines, pilots and airports is collected into a single data system in real-time, machine learning algorithms can predict disruptions. These predictions will enhance the customer experience by providing advance notification of potential flight delays and allowing stakeholders to adjust their processes and adapt accordingly.
- Optimizing flight paths and flight operation patterns: Receiving real-time weather and traffic data enables pilots to make more justified decisions about their flight paths for efficiency and passenger comfort. Whereas, updating stakeholders’ systems to share reliable data enables machine learning algorithms to spot patterns.
Solution: Advanced Cloud Usage for Innovation and Resilience
Cloud-based mobile computing enables off-site check-in for travellers. This translates to shorter waiting times, less crowded airports, and a more seamless flying experience. Moving data to the cloud is the most effective way to ensure data is reliable and quickly delivered to necessary second parties. A well-executed cloud migration results in innovative processes, bringing products to market faster, and constructing a resilient supply chain. Even small and mid-sized airlines can now afford to build redundancies for their IT infrastructure, as cloud technology offers more flexibility at a lower cost.
Growth Zone 2: Enabling Synchronization Between Traveller’s Touchpoints
The airline industry currently places emphasis on gathering comprehensive customer information to customize product offering and offer tailored information. Today, airlines can be more holistic with the help of APIs (Application Programming Interfaces) in how they sell existing products, stretching into the lifestyle realm of commuting, shopping and dining.
Solution: Omnichannel Management and Event-driven API Integrations to Gather Real-Time Information
Airlines can benefit by adopting omnichannel management, enabling consistent management of content and user experience across all sales and service channels. They can benefit from event-driven APIs by gathering real-time data and time-sensitive data on passengers’ behavior and preferences from multiple sources and enable better decision-making for resource planning. Efficient event-based API utilization allows for new and flexible commercial models between airlines, sellers, servicers and consumers in real time, as the event-driven architecture enables the data to be pushed to downline apps and consumers in timely manner.
Growth Zone 3: Enabling Robust Payment Solutions
Airlines need flexible, fully integrated payment systems and processes to enable protection against fraud and cyber threats, and to comply with stringent industry regulations. Fragmented airline payment solutions can negatively affect customer experience with additional data entries. Utilizing universal, easy-to-use payment services can transform the traveller’s journey.
Solution: Transition From Batch Payments to Instant Payments
The move from batch payments to real-time, one-to-one payments presents a significant opportunity for airlines, but necessitates the large, complex challenge of the move itself. Pinpoint accuracy with integration of fast payments enables meta-data identification of the transaction partner and type of item invoiced, leading to automatic reconciliation and expense categorization. Finally, fast payments can be used for instant refunds in direct channels, improving the consumer’s experience.
Solution: Blockchain for B2B
Using the blockchain, airlines could easily establish and automate distribution rules and travel agent payments including incentives, methods of payment (e.g. early payment discounts), and foreign exchange conditions. Blockchain for loyalty could enable travellers to convert miles into digital on-board shopping. Singapore Airlines and airBaltic have demonstrated how airlines can go beyond standard loyalty programs using blockchain.
As demand continues to rebound, airlines cannot wait until new staff are fully proficient and must act swiftly to offer innovative and cost-effective tech services to address the constantly shifting environment. Having the right combination of AI/ML based data management, event driven APIs, and real time data solutions will help airlines keep travellers informed and minimize the impact of inconveniences encountered throughout their journey. The perfect combination is possible with a comprehensive approach to technological transformation. Involving a technology service provider with deep airline system domain knowledge can offer expert-level input to help airlines transform their business and get the most out of cutting-edge technologies.
Article written by DataArt
DataArt delivers perfectly suited services, being a go-to technology partner both with deep travel domain experience and people’s first approach.
To learn more about DataArt, visit: https://www.dataart.com/industries/online-travel-solutions