Airlines have recognised the significant importance of implementing advanced technology throughout the services and products they offer in order to attract and more importantly, retain customers. Adopting quickly to evolving trends will allow airlines to overcome the barriers posed by rising operational costs, increasing passenger expectations and the challenge posed by the competition. The airline industry is becoming a technology race!
Onboard connectivity
Many airlines have started to include in-flight connectivity (IFC) in their product. 82 airlines now offer these services, a 17% increase from 2017. The upside can be improved customer service, when the connectivity systems work; a sure sign of the increasing importance placed on continuous connectivity. For airlines, a huge potential for further ancillary revenue can also be unlocked. A great example of IFC can be found on Finnair. Their main ancillary revenue source derives from food & beverage and upgrade sales, which are promoted throughout their free inflight “Nordic Sky Wi-Fi” and Inflight Entertainment System.
Onboard connectivity provides further opportunities for new partnerships, such as online streaming services with the likes of Amazon Prime and Netflix.
Virtual reality / Augmented reality
AR and VR are estimated to generate a worldwide revenue of £162 Billion by 2020 (market research firm IDC). Airlines have been exploring a wide range of implementation scenarios for AR and VR, from inflight pilot and cabin crew training, remote airport operational control centres to in-flight entertainment.
A great example of AR is aboard the Airbus A380, passengers are using AR-led iOS app iflyA380, which allows them to take a 360 virtual tour of the flight deck and tours of passing landmarks. Gatwick Airport has launched an “AR wayfinding” tool that navigates passengers throughout the terminal, using their mobile camera. At JFK Airport, passengers waiting for flights can be offered VR headsets by competing airlines, to offer an insight into their products, essentially up-selling their brand. Unorthodox, yet affective.
Blockchain
Complex data reconciliation occurs at every touchpoint of a passenger’s journey, this is rarely a seamless experience for passengers. Blockchain, also known as “internet of trust”, enables airlines to conduct smoother data sharing.
According to SITA’s Air Transport IT Insights (2018), 34% of airports are planning blockchain research and development programmes by 2021. In 2018, Singapore Airlines’ frequent flyer programme “KrisFlyer” launched KrisPay, which claimed to be the first Blockchain-based airline loyalty wallet. This loyalty wallet allows passengers to redeem airline miles at point-of-sale.
In the event of flight delays, passengers often receive inaccurate status updates. Blockchains ability to accumulate and provide a single source of data allows airlines to accurately share flight updates across multiple channels with passengers. This enables airlines to successfully manage passenger expectations in the event of delays. Many airlines are now implementing Blockchain solutions for distribution, retail and baggage handling.
As the industry continues to transform to the ever-evolving digital technology airlines must continuously revisit their operating assumptions in order to stay at the forefront of the industry. They must re-imagine key functions to differentiate passenger experience. With consumerisation being the key pillar of the service sector, airlines must embrace innovative technologies. The challenge is how do they finance them when margins are being squeezed? Our sector does not have the financial means of many other consumer driven sectors, so how will airlines make the required changes to embrace digital change?