The airline industry's digital boom

It wasn't too long ago that most of us visited a travel agent to look up best fares and schedules for our travel needs.

With the growth of the Internet and multiple digital channels becoming available online, including disruptors in the travel industry, travellers have become their own travel agents in under a decade.

Companies like Priceline, Kayak, Hipmunk, Google Flights and Expedia have made it possible for everyone with an Internet connection to customise their flight itineraries, in the process making frequent flyer programmes redundant as travellers hop and skip among airlines looking for the best travel experience combined with the best price - themselves.

This means that both traditional and low-cost carriers have had to adapt their operational strategies to differentiate themselves in a hyper-competitive market where customers have more choice than ever and extreme transparency has disrupted the way business is traditionally done.

One of the difficulties many airlines face is staying abreast of these disruptive technologies and establishing themselves as retail outlets for their services.

Speaking at the International Air Transport Association (IATA) World Passenger Summit in Hamburg late last year, vice president and general manager for the Global Practice Travel and Transportation Industry at HP Enterprise, Brian Cook, said the average consumer is spending between four and six hours looking for leisure travel.

Airlines should use data to improve their offering

"They’re checking all the different sites, over and over again to make sure they get the best value,” Cook said. “I think addressing that, bringing a digital storefront to the consumer where he can actively see the product, immerse himself in the product, and understand what’s different about the product and that the product that’s being offered to him is a product that he wants. So it’s personalized and tailored to him.”

An Accenture report titled From Digital Strategy to Airline Strategy in a Digital World, points out that, with all the available data airlines have - from digital customer interactions to insights from both internal sources (such as a reservation system) and external sources (such as social media), along with cheaper data storage facilities, they have a brilliant opportunity to store and analyze vast amounts of customer data and can harness that to create offers and personalize the customer journey.

This data and real-time insights can tell airline marketers and Chief Information Officers where their customers are, how they're booking and what they're seeing on the Internet.

Some of the ways participants in the surveys said they could use real-time insights to personalize travel were:

  • Geolocation technology to guide customers to gates or around the airport
  • VIP lounges or baggage carousels
  • Sending digital vouchers for airport restaurants to passengers' mobile devices when flights are delayed
  • Providing an app that allows customers to provide real-time rating on the flight, crew, entertainment and food while on board

Achieving these customer-facing services means airlines have to adopt best practices from leading airline retailers to become strong retailers themselves, a move that necessitates employing digital natives to spearhead constant digital innovation.

Here are a couple of examples of how airlines across the globe have introduced different innovations:

  • Barcelona-based IAG airline Veulling introduced the industry's first fare-locking option, a smart-watch boarding pass and now allows passengers to rebook themselves on an earlier flight if a seat is available.
  • Dubai-based flydubai in April enhanced its cabin product series with Wi-Fi connectivity, live television streaming and a new seatback inflight entertainment interface with content from Hollywood, Bollywood, Arabic and Russian cinema. JetBlue similarly offers Amazon Prime and Virgin America Netflix content via live streaming in-flight.
  • Ryanair, whose expanding Ryanair Labs digital technology team will roll out a new website in October, added a 'Rate My Flight' feature to its app that asks passengers to evaluate each element of their flight and uses the feedback on social media and to improve its offerings in real time. SriLankan Airlines similarly launched a customer satisfaction platform monitored by customer touch point supervisors. In July Tripadvisor Flights added "FlyScore' to let customers grade and review airlines which could see all carriers compete for quality reviews down the line.
  • EasyJet's Mobile Host app combines passenger flight itinerary, location and time with Google indoor maps and live airport data to calculate the journey context and communicate with the user every step of the way.
  • Amsterdam-based Transavia airline's Entertainment App lets flyers download movies or series onto their tablet or mobile for free and communicates directly with passengers via WhatsApp.
  • KLM launched Aruba Happy Flow at Aruba Airport. The technology uses facial recognition technology instead of passports and boarding passes at multiple points during the airport journey.

While improving the cabin experience with blue light, introducing private cubicles in business class, and engaging with passengers as they travel, are all ways to make the journey more enjoyable, these tend to be focused on a specific area rather than align the whole journey.

To be really competitive, any digital innovation an airline adopts has to touch every aspect of the airline business, bringing together digital devices, connectivity, data, service design and retail skills to provide a true ‘passenger-centric’ travel experience. It means rethinking the business model and evolving a digital strategy into a business strategy.

Travel industry consultant Michael Planey and moderator of the annual Passenger Experience Conference explains how airlines can create social connections with new digital initiatives:

"You want to be able to connect to them in their home, on the ground, in the airport, in-flight, at the hotel, so you can give them the best customer service that you possibly can.

It’s definitely in the airlines' best interest to enable as many personal electronic device processes as they can and have people think to go to the airline as a source of continuous info instead of just in the air."