Airlines are evolving at an unprecedented rate. In recent years, the use of new technologies, a push toward centralized planning, and the entrance of new industry players have drastically changed how airlines operate from even a decade ago.
This transformation will only continue as we move into the new year. Let’s take a look ahead at some of the top trends for 2018.
Growing Passenger Demand
According to the International Air Transport Association (IATA), 3.8 billion passengers used air travel in 2016. Passenger volume is part of a consistent trend that’s held since the 1980s: the amount of global air traffic doubles every 15 years.
This trend is expected to continue due to a number of factors:
- Millennials are more likely to take air travel than previous generations.
- High-growth global regions, like Asia, are expecting their middle class to double in size, which will include newfound access to disposable income.
- Air travel is becoming more affordable. In the first-quarter of 2016, for example, global airline fares dropped 4 percent from 2015.
Coupled with steadying fares is the growing demand for cheaper airlines. In fact, Southwest Airlines carried the most scheduled passengers globally in 2016 with 151.8 million.
Traditional carriers like American Airlines and United Airlines saw this opportunity and introduced their basic economy options earlier this year. Despite some public push back, traditional airlines do see varied economy options as a viable way to capture price-sensitive passengers.
Rise of the Digital Consumer
Of course, customer demand isn’t only affecting competition between airlines. More and more customers are turning to OTAs and other online platforms to book flights. Metasearch engines like Kayak and Skyscanner give customers the ability to compare prices across airlines and other travel sites like Priceline and Hotwire.
These players are harnessing technological developments to build digital platforms that aggressively disrupt the value chain and give customers the ability to book flights without being redirected to other sites. Priceline Group, Expedia & Ctrip have even acquired metasearch sites to make this more efficient.
Internal process improvement has also been at the forefront of today’s airline trends, with the main driver being customer convenience. Today’s latest technologies, such as biometrics, can help decrease wait times at check-in, bag drop, boarding, passport control and security.
Biometrics, in particular, could potentially replace paper documentation. Earlier this year, the Transportation Security Administration (TSA) launched a program at 30 United States airports that uses passengers’ fingerprints for both boarding passes and identification. Other biometrics technologies include eye scans and facial recognition.
Useful artificial intelligence is made possible with the vast amounts of data that airlines can now collect across their entire operations. Customer preference data, employee information, and scheduling history can lead to trip personalization, improved employee incentives, and increased scheduling efficiency.
Concrete examples of AI, including customer service, dynamic network scheduling and self-rostering, have caught the attention of airlines. It is worth noting that the percentage of airports that plan to trial AI systems increased from 24 percent in 2016 to 45 percent in 2017.
2018 and Beyond
The above trends are just a few examples of how the airline industry will continue to evolve through 2018 and beyond. Customer demand will push airlines to deliver affordable flights that don’t hold back on convenience. Artificial intelligence and biometrics aim to improve the passenger experience and rid internal operations of outdated processes.
If anything, there’s a lot for airline employees and passengers alike to look forward to. 2018 is just the beginning of new things to come.