By Avik Dasgupta
Operating in a volatile environment, airlines are today influenced by a variety of external factors that impact their business – either on the ground or in the air. Extreme weather conditions, natural disasters, mechanical problems, labour issues, industrial action, air traffic congestion, security alerts and other disruptions can not only damage an airline’s brand value but also generate unexpected costs. Following are the number of airline delays and cancellations across North America, Europe and Asia Pacific due to the aforementioned reasons in the year 2014.
How does Disruption Affect the Airline Ecosystem?
The Cost of Delay
Any ad-hoc flight cancellation due to weather disruptions, technical glitches etc. puts tremendous pressure on the ground staff to accommodate passengers on next flights and generate their new PNRs. These irregular operations hugely impact the revenue of the airlines In 2014, the cost of aircraft block (taxi plus airborne) time for U.S. passenger airlines was $81.18 per minute. Fuel costs were $38.34 per minute and crew costs were estimated to have cost $16.92 per minute, followed by maintenance and aircraft ownership ($12.36 and $8.52, respectively) and all other costs ($3.01). (Source: www.airlines.org )
Managing Disruptions in Real-time
To deal with such delays, airlines need the agility to restore normal services swiftly and cost-efficiently.
- Airline operations need to re-route aircrafts along with performing flight cancellations and delay decisions for various types of aircrafts with minimal disruption.
- Crew planners need to find efficient recovery solutions and coordinate with airline operations controllers to ensure that the considered operations decisions are feasible with respect to the crews.
- Customer service coordinators have to find efficient recovery solutions for passengers and coordinate with airline operations controllers to provide an assessment about the impact of possible operations decisions on passengers
- Air traffic control groups are required to collect and provide information, such as the likelihood of future ground delays, to airline operations controllers to improve future airline scheduling and planning.
An efficient disruption management process helps airlines and airports with
- Improved Visibility: Aggregation of real time flight data and crew schedules for proper mapping
- Better Decision Making: helping in intelligent, cost-effective and crew friendly decisions
- Cost Savings: US airlines lost $7.2 billion as a result of disruption in 2012 .The airlines could have saved $455 million every year just in re-booking costs (IATA Research
- Efficiency Improvement: ensuring availability of the right crew, right aircraft both in terms of numbers and suitability, even during schedule changes
- Improved Passenger & Crew Satisfaction
- Enhanced Flexibility : based on the airline’s requirements and multiple airline business models support
- Seamless Scalability : Based on the criticality of the situation
Mobility Solutions for Disruption Management: Enabling Customer satisfaction through real time and personalized notifications
Managing expectations and empowering the passenger has become key in today’s world and the one communication channel that presents an opportunity to airlines and airports in such a situation is the mobile device – whether that is a smartphone or a tablet. The channel enables the airlines to interact directly with and track down individual passengers, which is an important first step towards minimising the impact of disruption.
- Personalized feed for high priority customers ensures increased customer loyalty. For example, a message can be sent to a frequent flyer offering free lounge access or a restaurant discount during disruptions
- In a recent study,85% of the travellers wanted the airlines to share multiple rebooking options with them. The passengers can be sent rebooking notifications on their mobile with flight options filtered either through their previous buying patterns, flight durations, by airline departure times or by prices.
The Amadeus Phocuswright report- “Passengers-first: re-thinking irregular operations.” had 73% of the surveyed airlines planning to offer disruption management solution via Mobile by 2017.
In 2015, TAM Airlines from Brazil has implemented a mobile solution built to reduce the drag of flight disruptions. With this solution, passengers of TAM can access a variety of alternative travel options and personalized recommendations with the tap of a smartphone or tablet on the spot. Recommendations are based on each individual traveller’s preferences and current situation, such as language, choice of contact, ancillary purchase history, the specific journey and more.
Iberia Airlines have also equipped their terminal-based staff with iPads to ensure passengers have access to the information they need at all times.
In the Phocuswright- Amadeus report, nearly 1 out of every 3 surveyed passengers was frustrated by insufficient real-time information. The need of the hour for any airline is to provide timely, consistent and orientated information for the passenger. The information has to be the same regardless of it coming through different channels- a desk or a roaming agent, in-flight or the passenger’s mobile. More informed the customer is, lesser the frustration and more the satisfaction and loyalty.
About the Author:
Avik Dasgupta leads the thought leadership marketing division at IGT. With an engineering degree in Information technology from Mumbai University and a management degree in Marketing from the Institute of Management Technology, Nagpur, Avik has 7+ years of IT marketing experience. Having worked in leading firms like Polaris Financial Technology and Cognizant Technology Solutions prior to joining IGT, Avik has authored several blogs and articles on BFSI and Travel technology innovations . He can be reached at firstname.lastname@example.org