Digital Aviation: Can Airlines Become Product Organisations?

In my previous article, I looked at aviation’s digital evolution: from early reservation systems through to cloud migration, data platforms, and the rise of AI. I argued that digital executives are now expected not only to maintain information systems, but to create business value at speed. At Venari Partners, we see this first-hand in our work supporting airlines as they build digital and product teams that truly deliver. However, the question remains: can carriers move beyond offering digital products and become true product organisations?

Let’s delve into the topic first by exploring the meaning of the term product organisation, how this differs from traditional project-led models, and what these questions mean for digital talent in the industry.

Simply put, this refers to a company that puts their product – and the product experience – at the heart of everything they do. The distinction matters. A mobile app, chatbot, or new pricing engine demonstrate progress, but ultimately an operating model based around product principles is the mark of a true product organisation.

As I see it, there are four main aspects separating product organisations from other business models:

• Product organisations define their product domains

• They build cross-functional squads

• They focus on outcomes, not milestones

• Experimentation is a touchstone of their culture

The Journal of Business Research has shown that ‘adhocracy’ cultures – flexible and risk-tolerant – are most strongly correlated with product innovation, while hierarchical cultures constrain it. Many airlines have historically operated hierarchically and thus face a significant challenge to become product organisations.

In project-focused companies, technology teams deliver features upon request and move on to the next project. In a product-led world, however, teams own domains (such as booking flows, offer catalogues, and loyalty APIs) and continuously improve them. Delta CTO Narayanan Krishnakumar has been clear that the company is moving from projects to products as the foundation of its digital transformation.

‘We’re working with the business to shift our focus from projects to portfolios of products,’he explains in The Wall Street Journal, describing portfolios that range from loyalty enhancements such as the Medallion Program and Sky Club to operational improvements like pre-selecting meals in catering. This shift has required new roles, new funding models, and closer alignment between IT and business, apparently signalling that Delta sees digital agility as a necessary cultural change.

Product-focused companies have durable teams of managers, developers, software architects, designers, and data scientists who are empowered to solve problems end-to-end. So, how common are product organisations in aviation? Lufthansa’s Digital Hangar is an example of this shift in processes. There, technology and commercial staff are embedded in teams working in domains like irregular operations or loyalty – a structure that stands in contrast with the siloed IT departments of yesteryear.

Project outcomes are typically judged by time and budget. Products, however, are judged by metrics: conversion rates, attach rates, checkout latency, or NPS. Ryanair makes this brutally clear; its Labs has an ‘all or nothing’ culture to deliver ancillary revenue impact. It seems that 'all’ is winning out, as the Labs now accounts for over a third of the group’s income.

For product organisations – particularly in the tech industry – rapid testing and failure are baked-in facets of working life. The aviation industry’s more broadly traditional culture can make this difficult, yet some airlines are challenging accepted norms. Singapore Airlines, for instance, has invested heavily in agile- and design-oriented training through their digital innovation offering, KrisLab. At Lufthansa, meanwhile, the Innovation Runway programme openly encourages ‘failing fast and learning faster’. Such examples seem to suggest that elements of the product organisation model are starting to show up in aviation – though not yet frequently enough or at such a scale as to become widespread.

Embedding product-focused ways of working into airlines exposes the most significant challenges faced by carriers, including talent acquisition and structural pace. Digital innovation in itself is not a guarantee of success; organisational agility and open leadership are also necessary for airlines to maximise the potential of digital.

Roles such as product managers, software architects, developers, and data scientists skilled in experimentation are not well represented in aviation at present. The industry has faced obstacles around digital talent recruitment in recent years; big tech, fintech, and other platforms can attract candidates with the kinds of modern stacks, flatter cultures, and higher incentives than airlines can generally afford.

Carriers like Ryanair, who run their Labs in-house, and LATAM, who have redesigned their digital teams into lean cross-functional arms, are some of the exceptions. Overall, there is a scarcity of critical and strategic talent internally and carriers usually need to go to market to sustain product squads at scale.

This has been a particular area of interest for me in recent years; our agile recruitment offering has seen us source digital candidates predominantly from outside the aviation industry. I believe that the CIO, CDO, or CTO of tomorrow cannot be merely a custodian of the airline’s infrastructure. They must act as co-creators of strategy, aligning product domains to business value, funding teams against outcomes, and championing cultural change.

LATAM’s Chief Data Officer Andrés Bucchi talks about ‘rebuilding an airline for the 21st century’ through data and AI, signalling that leadership vision is part of the shift. But across the sector, most digital leaders are still judged by project delivery, not on whether they are building product organisations that will endure.

So, can airlines become product organisations? It seems like some are moving in that direction. These are promising developments, but the aviation industry is yet to embrace the product model fully. Digital offerings can be launched, but without structural changes around talent, culture, and leadership, we are a few steps away from seeing true product organisations in the industry just yet. Airlines that wish to achieve this will ned to move beyond solely project-oriented goals and embrace product outcomes, even when it challenges tradition.

I am always interested to hear from digital and tech professionals that are interested in testing themselves in the fascinating aviation industry – not to mention speak to hiring managers at airlines that are looking for cutting-edge digital talent to take them to the next level. Reach out to me if you would like to find out more – and be sure to stay tuned for the next article in this series!