Data & Digital Technologies Will Change The Airline Industry

Technology

The COVID-19 pandemic has changed the way we fly. Digital health passports, testing, vaccinated travel lanes, and queues are physical manifestations of that. But there’s another revolution underway, one less immediately obvious to passengers but nonetheless important.

Data and digital technologies are reshaping the aviation landscape and changing the way we fly. As airlines become better at harnessing and applying data, both will become increasingly important.

Airlines already have plenty of customer data. Think about what information you give airlines when you make a booking, what’s on your frequent flyer program, your travel patterns, and how you pay for it. It’s a digital treasure trove for airlines.

According to Mike Sloan, PROS Travel Retail Vice President, there are already multiple digital touchpoints on an airline passenger’s journey.

“The complete customer journeys is not just four or five phases of travel. It’s literally hundreds of digital touchpoints,” he told Simple Flying. But he says it is also a question of what airlines do with those digital touchpoints.

“I do think COVID has accelerated, more than any other event I’ve seen in 20 years of working with airlines, the need to make the customer experience better.”

 

Airlines need to learn to use data and digital technology better

Most airlines are already embracing digital technologies. Need to make a booking? Use the app. Need to change a booking? Use the app. Got a query about your flight? Use the app. The problem to date is that airline apps, like most airline digital technologies, are straight up and down tools that frequently lack intuition and the ability to deal with a customer’s specific needs.

“A mobile application in your hand could be your best friend in the future, but right now, they’re not as sophisticated as they need to be,” says Sloan.

PROS develops AI software that helps businesses maximize their revenue. They work with a diverse range of airlines, including Emirates, Aeromexico, Lufthansa, Qantas, Japan Airlines, and Southwest.

The software company connects the critical pieces of revenue management, offer creation, distribution, and digital retailing for the airline industry. As airlines increasingly seek to reduce day-to-day operating costs and increase revenues, PROS argues AI-driven use of customer data in the airline industry is an unstoppable trend.

But Mike Sloan admits many airlines are barely past first base when it comes to harnessing data, especially legacy airlines hampered by legacy processes and systems. He says airlines don’t necessarily need more technology; they just need to use the technology they already have better.

“The same is true with data. There is a lot of data out there, but airlines just aren’t using it in the right way. Airlines traditionally are siloed internally. For example, you have a group that deals with revenue management and another group that deals with distribution or e-commerce.

“You have all these disconnected siloed systems that have their own data that don’t really communicate and talk to each other. It’s like a choir, but it’s only people singing solo.”

Data needs to be more intuitive

Therefore, the challenge for airlines isn’t to collect more data; it is to use better what they already have. Airlines also need to evolve their digital technologies to meet the needs of passengers better. That’s a work in progress that should improve over time.

An airline might know where you fly to most often, but does it know why you fly there? Do you fly to LA to do business deals, visit Grandma, go shopping, or chase the ghosts of past lost lovers? This is important because if your flight is disrupted, the reason for traveling will usually determine the response to the disruption.

Right now, airlines know you go to LA a lot but not why. Standing in O’Hare while a snowstorm shuts down flights that evening, does the airline’s app know whether you need to get to LA or need need to get to LA? What’s your tolerance for diversions, layovers, and any increased expenses of travel?

Until an airline’s digital technologies can respond to your individual needs (and every passenger that night will have unique needs), all the AI, data, and digital technologies in the world will never supersede going to a staffed service counter.

Airlines are investing in more intelligent and customer-friendly technologies

Overcoming that lack of personalization and intuitiveness is a hurdle airlines and companies like PROs are working on. Mike Sloan says it’s an evolutionary process, and overall the airline industry is getting better at applying data in a customer-friendly way.

“This stuff isn’t perfect, but over the last year, year and a half, I’ve seen tons of investments in airlines in this space,” he says. “I know that customers will eventually benefit from this, including you and I. I want this more than probably anyone else just because I fly all the time.”

Ultimately, if an airline passenger is going to use digital technology, they want it to work and resolve the task swiftly. And passengers generally want the resolution of an issue to their satisfaction, not the airline’s preferred outcome.

Every user of digital technology in the airline industry knows there is a way to go in this regard, especially when the proverbial snowstorm blows in and lots of passengers very suddenly need attention from the airline.

Airlines needs to view passengers like retail views shoppers

Airlines know this too. They also have a vested interest in getting digital technologies and the use of customer data right. Beyond the startup phase, the intelligent application of data will reduce the airline’s operating costs and boost revenues.

Sloan says passengers are more akin to shoppers and customers. He says the travel experience is like one giant shopping mall where shoppers browse and buy. Shoppers often make last-minute impulse decisions based on mood and what catches their eye, boosting the mall’s revenues.

Switched on shopping malls are highly attuned to this and know how to push the shopper’s buttons. It’s a model Mike Sloan likes for the airline industry, saying;

“As airlines begin to shift from serving passengers and more toward serving customers or shoppers, they’re going to have a better attitude or systems of engagement with those customers, instead of just selling them a ticket and saying, ‘I’m done.’”

 

Source: Civil Aviation Authority – Qatar