Airlines have been an integral part of the global economy. Now and then, the global airline industry has dealt with major technological innovations – disrupting the market – whether it was the introduction of jet airlines for commercial use in 1950’s or displacing the gigantic ocean-liners which came to an abrupt end when cheap and fast air travel was introduced, or development of ‘jumbo-jets’ in the 1970’s, to meet the rising global demand for air travel.
In the ascent of the Jet age, Airlines minus the capability of computerization, added to the complexity of their operations. In 1950’s airline agents could take upto 90 minutes to complete a booking, American airlines developed automated airline booking systems known as Magnetronic Reservisor which was a drum-based system with the ability to store information for up to 1,000 flights for 10 days into the future. It took about 1.2 seconds per query and further leading to development of Sabre System. In the 20th century, LCCs came to being, again disrupting travel services and offerings.
But the biggest disruption yet, is that of Internet Age and its rapid permeation into everything from daily lives to Travel in unknown places. To cut costs brought about the introduction of online bookings and airlines embarked on another radical journey. Alaska Airlines was the first domestic carrier to sell tickets on the Web in 1995 and the first to introduce Web check-in, in September 1999. The power shifted from suppliers to intermediaries and now to the buyers with the changing technology.
With the current trends of IoT, Automation, Advanced Robotics, Integrated IT-BPO and Predictive Analytics, Airline industry CIOs/CTOs plan their budgets not only towards business technology but also for also for innovation. CIO’s of today are expected to anticipate business disruptions resulting from emerging technologies and lead the organization in exploiting them to stay ahead of the curve.
Some of the exemplary attributes of the digital disruptors are:
- Ensuring that the complete end-toe-end user experience and information is unified on a mobile device. Real-time information alerts and services are at the customer’s fingertips.
- Providing services with significant transparency. In case of airlines, a-la-carte of services, where passenger picks and use only those services which they need and know before making the booking, how much they have to pay – no hidden charges.
- Enhancing convenience of payment by making it instant, mobile and secure with 3rd party providers, like ApplePay to make the payment without any hassle.
Underlying technologies have become so ubiquitous that they have all together changed our lives.
Advanced Robotics: Robots in aviation and hospitality industry are becoming a reality. Recently, Japan Airlines introduced humanoid customer service robot agent at Tokyo’s Haneda airport called Nao, The robot can provide passengers with information like flight schedule and current weather conditions at flight destinations. On the similar lines, Amsterdam’s Schiphol Airport and KLM began testing a new robot ‘Spencer’ engineered to help transfer passengers navigate to the right gate in a busy airport. The robot can also recognize groups, human emotions and to respond to unexpected situations in order to better help people.
Not far behind, cruise liners too are adding robots in their staff list. Costa Cruises’s ‘Pepper’, is a humanoid robot that can speak German, Italian, and English, on board to give customized recommendations to the passengers for restaurants, excursions and events for their travel.
Internet of Things (IoT): Gartner predicts that there will be 25 billion connected devices in use by 2020, and many travel providers, including airlines have started experimenting with IoT. The focus of IoT projects underway are on improving passenger experience, enabling irops management, baggage handling, tracking pets in transit, vehicle and equipment monitoring and generating fuel efficiencies.
As SITA reports in its 2015 survey, 86% of airlines believe the IoT will provide “clear benefits over the next three years.
Connected Travel spans Infrastructure, IT operations, applications and people.
- We Live in “smart” cities – 1.6 billion connected things in use (2016)
- Booking “Smart transport” – 35 million connected vehicles by 2020.
- Enjoying “Smart activities” – 30,000 Travel & Energy apps (2015)
- Travel using “Smart navigation” – 380% growth proximity sensors (2015)
Artificial Intelligence: Airlines have embarked on their transition journey with Artificial Intelligence. Singapore Airlines is using artificial intelligence to build its brand and drive sales in digital marketing. Rocket Fuel’s Programmatic Marketing Platform uses AI to learn from every moment of customer interaction and in order to optimize media spend across channels like display, video, mobile and social simultaneously. This means the platform knows when and where to target potential travelers, and with which destinations or deals.
With the implementation of the technology, the airline has been able to see notable changes in:
- Average cost per acquisition (CPA) has halved
- An uptick in bookings to more off-beat destinations like the Philippines, Vietnam and Myanmar
- 14% of total website bookings during the period were made after seeing a Rocket Fuel powered ads
Virtual Reality: Airlines are taking their passengers on a virtual journey. Qantas, Lufthansa, are some of them to name. The experience of in-flight movie is going to be more immersive, as these airlines are planning to provide their first class passengers with VR headsets. This will not only improve the customer experience but also help to increase the revenue through holiday business by providing the virtual holiday experience.
Disruptive technologies are significantly influencing the business models of the airlines and giving an energizing effect on the business for not only short term efficiency gain but also for accelerating differentiation and helping to attain long term goals of improving customer experience and increase profitability.
Disruptive technologies bring together data, people and processes to intelligently optimize resources and decisions to improve revenues. IGT provide solutions to engage with the connected world – predictive analytics solutions, bespoke IoT solutions, and Mobility that connects people and processes, in the IGT quality, and from a single source.
IGT provide its customers with technology solutions that make up the connected world connecting stakeholders like airlines, passengers, crew and support to improve operations efficiency, grow the business and enhance traveller journeys.
About the Author:
Aarti Saxena is a Manager Consulting with IGT helping airlines, travel and hotel customers worldwide to optimize IT and business processes. She has been associated with IGT for more than 8 years now and her area of expertise includes implementing BI/DW and digital initiatives for airlines/travel customers. She is an integral part of Centre of Excellence for Business Consulting at IGT.