The airline industry has been at the cutting edge of digital disruption for years. Modern factors, like evolving customer needs and competition from new entrants, are changing the ways airlines do business. In fact, they stand to put airlines at risk of becoming commodity seat providers.
Let’s consider the following as reported in Accenture’s recent Technology Vision 2017 report:
- $305 billion USD of increased profitability is expected to be created through digitalization in aviation, travel, and tourism through 2025
- Of this value, $100 billion USD is expected to migrate from traditional players to new competitors.
Of course, this isn’t the only change the industry has to prepare itself for. The Technology Vision report covers five other trends impacting the industry in the years to come. In this post, we’ll discuss these trends and their implications.
AI is the New UI
Humans can only do so much, whether that’s analyzing data or helping a customer with baggage issues over the phone. AI, on the other hand, can analyze vast amounts of data to predict future outcomes, such as customer’s baggage fees, seating preferences, and other amenities, based on their history.
However, the true potential of AI extends beyond an airline’s offerings. Imagine your food or drink order waiting at your favorite restaurant once you arrive at the terminal. What if you could have a taxi or ride-share waiting once you arrive? With AI, all of this can be done behind the scenes, freeing up employees to handle truly important tasks.
Ecosystem Power Plays
Airlines need to become active participants in the broader travel ecosystem. This means more than simply working with OTAs and hotels: airlines need to collaborate with partners so they can enhance the customer experience. This could include restaurants and travel partners as mentioned above, but could also include entertainment services and shopping.
Application programming interfaces (APIs) are the key to building this ecosystem. APIs allow partners to share data in real-time. Their flexibility makes it easy for partners to choose which data points to send. Airlines can take this one step further by opening up their API to allow partners to build their own integration tools (Lufthansa launched theirs last year).
With a growing reliance on data and digital technology, airlines will need to reconsider their hiring process. Data scientists, digital experts, and marketers will all take the charge to create seamless customer experiences.
To find the right candidates, airlines will need to turn to on-demand talent pools. These give airlines access to qualified people that can take on projects within a given timeframe. For urgent projects, talent pools are a great way to ensure someone is available to take it on. Airlines also benefit from a payroll perspective, as hiring on-demand eliminates the need to bring on full-salaried employees. Learn more about Accelya's managed services.
Design for Humans
Creating a seamless experience is top-of-mind among airline leaders today. Yet this extends beyond the actual flight. Leaders understand that the customer journey starts long before they arrive at the airport and long after they arrive. The challenge becomes this: how do airlines bring everything together into a comprehensive experience?
Airlines could take the lead from companies like cruise operator Carnival, which uses a service design approach to deliver customer experiences. Passengers are given an “Ocean Medallion,” which, along with IoT technology aboard the cruise liner, learns about food preferences, chosen activities, and more. This allows the cruise liner to predict and deliver on these preferences with no effort from the passenger.
Airlines are at the forefront of many global factors, such as geopolitical change, global markets, and environmental awareness. Airline leaders need to consider how global factors may impact their operations, as the reality is that they may impact the airlines in ways we’re uncertain of today.
Other emerging technologies may impact the need for people to travel altogether. Augmented reality and virtual reality may provide people with travel-like experience at far lower costs (the prices for these technologies are constantly decreasing).
2017 and Beyond
Our industry is always evolving. Only those airlines that leverage technologies like AI and the power of ecosystems to create a re-envisioned and seamless travel experience will find success. These trends are only the beginning of an age of digital disruption that is impacting far more than airlines. Companies that are slow to get on board will struggle to survive.