by Kieron Branagan, CEO, OpenJaw Technologies
The World Aviation Festival took place last week in London. The event has grown hugely over the past few years. It is now the go-to event for airlines, aviation experts and travel technology and, as a result, is moving to the much larger ExCeL London in 2020.
There were up to seven tracks on at any one time, made up of short presentations, with fireside chats and panel discussions to break up the pace. The main keynote interviews saw a succession of CEOs from global airlines take to the stage. While the CEOs might have spent their fifteen minutes talking about (or being asked about) the bigger picture – the macro environment, composite airframes, oil prices – the three D’s – Digital, Distribution and Data was never off the agenda.
OpenJaw were a platinum sponsor at the event, taking part in several presentations and panels. Whilst there were many themes addressed over the three days, we found seven distinct themes that came up again and again:
#1 NDC and One Order:
NDC underpins so much innovation, it is inevitable that it would be one of the themes at a festival for the world’s airlines. But an observation of note is that “NDC” is now increasingly seen as a component in terms of “NDC and One Order” – the fact that the Aviation IT Show was sub-headed as the NDC and One Order Summit speaks volumes about where airline distribution is going and what the NDC fuss is about.
Some airlines gave an update on their progress with NDC, including some of the IATA Leaderboard airlines who have committed to getting 20% of their indirect bookings through NDC channels by 2020. BA and Lufthansa Group are both confident of surpassing this landmark, and said they are seeing “a lot of momentum” and that “corporate travel agencies are getting impatient and want airlines to move faster”. Neil Geurin from American Airlines said he is happy with their NDC progress but admitted it wouldn’t progress “as quickly as others who might have a more stringent push to push bookings through NDC.”
#2 Customer Centricity, Customer Experience and User Experience:
One of the final sessions was one of the most inspiring – Guido Woska, head of passenger experience design at Lufthansa Group explained how “design is not a beauty contest”. Design thinking is about creating future products, services and experiences for guests, but it also applies to business processes as well. There was also a larger-than-usual emphasis across the show of the importance of user experience and customer experience. Essentially, Lufthansa are rethinking every aspect of the customer experience: getting rid of silos so that they can focus on applying design thinking principles to the customer journey in order to achieve their ambition of “becoming the world’s most customer-centric group of premium airlines”. Guido called the transition from being “obsessed with airplanes to being obsessed with customers”.
Across the hall, both Singapore Airlines and Air France – KLM were saying something identical. With the distribution landscape being disrupted and customer needs evolving rapidly through technology and a mobile first perspective, both airlines are adopting innovation sprints, design thinking and engaging with tech start-ups so as to drive “customer intimacy”.
In recent years, there have been warnings about a shortage of experts in data, particularly data scientists. A few years later, it’s not just data scientists who are in demand – the increasing digitisation of travel means that airlines are competing with each other and the wider world for a range of new technical, software and analytical skills.
Airline HR departments now have a pivotal role in supporting successful digital airline businesses. But as well as recruitment, organisations need a structure in place to retrain existing staff whose roles are changing as a result of new technology.
Eliano Marques from Emirates pointed out that “marketers need to be a bit tech-y because the technical architecture makes the things they want to do happen”.
#4 Building revenue beyond the seat:
Airlines are perfectly placed to sell the full itinerary and many speakers suggested that airlines need to finally think in terms of capturing value across the travel ecosystem.
The conversation around ancillary products has moved on and so too has the technology powering ancillary sales. Many speakers talked about how their airline wish to use their existing data and combine it with machine learning and artificial intelligence to become better retailers. The most sophisticated carriers were openly talking about dynamically pricing for flight-related extras – powered by AI.
Ecosystem revenues come from the non-flight related components of the trip, such as holidays. Johan Lundgren, CEO of easyJet, told the audience to look out for the latest version of easyJet holidays. He said the airline would start contracting its own hotels and that it will “be using tech to make it a different proposition”.
#5 Building the future of ecommerce:
United Airlines, as well as many other airlines talked about how the future of ecommerce is being built by adopting the techniques of agile processes, and how to get ideas and products much faster to market. United have put the business and IT teams together and are working “one development sprint at a time, grouped in agile release plans, delivering value daily”.
Some airlines were very explicit in their thinking; they spoke about a “test and learn” approach that they use before rolling out new products. The common theme was
- Start with a hypothesis
- Use data to test this hypothesis typically using test data and
- Scale in a production ready environment.
The recommended approach was NOT “fail fast” instead the more practical and realistic approach of “learn fast, implement win and then scale fast”. The language use was familiar to programmers and solution architects trying to deliver code. It was very clear that the lines between engineering, product management and analytics marketing is becoming blurred.
#6 Real Use Cases of AI and Personalisation:
This year’s World Aviation Festival spoke about data, personalisation and AI – not unlike previous years. However, there was a new level of sophistication, with specific use cases of AI delivering personalised offers from the likes of Malaysia Airlines. Instead of being talked about, personalisation is now in the market and being used to create value for airlines and passengers.
The quote “data and insight is how the game is won” from an LCC Panel captured the essence of the thinking. There was, however, a clear acknowledgement that AI can help as it can give you a predictive capability. However, applying AI in any context is complex because “in an airline, data is all over the place, so its not that simple to execute the AI”. The problem is not that airline don’t have the data, the problem for airlines is that they don’t have the right data. Emirates spoke about how they are on year 4 of a programme to resolve this, with a data lake of over 100 million complete customer details, including transaction data.
Many speakers spoke about the need to build a seamless customer data platform to make the promise of AI and personalisation work, which could then deliver an AI prediction engine. The ultimate aim, as one of the panellists declared is to know the next best action for all passengers. In other words, knowing that “this passenger wants to buy this type of product, so give them exactly what they want when they ask for”.
#7 Conversational commerce as the future of customer service:
In past years, KLM were one of the only airlines referring to conversational interfaces as a channel to engage with customers. At the Festival, many more airlines spoke about how consumers have moved from live channels to digital channels to communicate with airlines. The channels of choice are messaging apps such as Facebook Messenger, WhatsApp and WeChat.
The repeated phrase was “being where our customers are”. Customers already have a presence on Facebook, WhatsApp and Wechat, so that is where airlines need to be. KLM quoted a statistic that “90% of all our customer conversations are direct 1-2-1” and called social and messaging apps “the living room of our customers”, and that their strategy is to be part of this conversation in this living room.
KLM spoke of their aim to bring “all of the functionality that they currently have on their website and social channels into conversational interfaces” such as chatbots. And they have proof points that this approach is working: KLM openly spoke about the €230,000 in revenue per week that they are earning through these 1-2-1 channels.
The World Aviation Festival showed that a lot has moved on since the 2018 event. But what about the future? What should airlines do next?
I will leave the final words to Henry Hartveldt from Atmosphere Research, talking to a panel of top airlines CEO’s. Henry said that airlines can lead from the front in terms of digital transformation because of three things:
- A desire to improve
- Strong brands and
- Lots of creativity.
I could not have said it better myself.
Thank you for reading, see you in World Aviation Festival in ExCel London in September 2020!