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Come fly with us: how the air transport industry embraced digital transformation

Come fly with us: how the air transport industry embraced digital transformation
2016-08-042016-09-06industryen
The $7.5 trillion global travel industry is embracing a digital future, with major implications for how we travel. We explore some of those impacts here:
Published August 4, 2016 by Jon Evans in industry

The $7.5 trillion global travel industry is embracing a digital future, with major implications for how we travel. We explore some of those impacts here:

The pilot’s story

Until recently, every pilot needed to carry on average 11.3 kilos of paper charts and manuals. This changed  once the iPad appeared, and pilots today carry more information on tablets. The US FAA approved use of these tools officially in 2011, since then numerous airlines now use tablets in-flight.

Aircraft are becoming connected. Currently two-thirds of airlines plan to have connected aircraft in their fleets by 2019, says SITA in its 2016 Airline IT Trends Survey.  IBM has a host of tablet apps for airline workers on connected airplanes, including apps for flight attendants that help them deliver personalized passenger services and deal with flight changes and delays.

The passenger’s tale

One of the biggest transformations is by way of the passenger. On average we touch our smartphones 43 times a day. Passengers are connected and want the same connected opportunity throughout their journey. They want the ease and convenience of advanced booking, electronic ticketing and digitally-connected loyalty schemes.

Passengers today find flights, make reservations, check-in and carry boarding passes on their smartphones (over 90 percent of airlines support electronic boarding passes). Airline loyalty schemes, such as those from Virgin Atlantic or British Airways, are made available using apps.

Even the way we choose to travel has changed. “As part of our omnichannel strategy, Thomas Cook has seen the need to make sure our customers can be served in a seamless way through whatever channel they wish,” said the group’s head of operations, Graham Cook. This includes boarding passes on smartwatches – 47 percent of airlines will support these by 2019, claims SITA. There are other implications: TUI Netherlands passengers can even order drinks and duty free via their own smartphones while in flight. Many flight attendants are now issued tablets to use to check passenger diets, needs and requests; confirm loyalty program statues and more. These include Delta, United, Jet Blue, British Airways, KLM, Air France, Lufthansa, Iberia, Emirates, Etihad and Qantas. “Nearly 80% of airlines plan major investments in passenger services via smartphones over the next three years, while 71% of airlines expect to do the same for tablets,” SITA claims.

The border guard

Numerous airports are deploying the latest biometric automated passport control points, which should accelerate the journey through passport control.

The move to adopt online check-in systems also enables automatic identity analysis of travelers before they set out for their destination. By the time passengers arrive at the airport, security systems should already have checked their ID documents for inclusion on any no-fly lists, criminal records or immigration anomalies etc.

These improvements are changing the nature of border control. With 68 percent of airlines planning to deploy IoT projects by 2019, airport security can reasonably expect to be able to let passengers know how long their journey to the gate will take, thanks to connected beacon based traffic systems.

In the future, single biometric travel tokens are expected to replace existing identity documents. Fifty-four percent of airlines plan to evaluate this technology in the next decade.

The baggage handler

Nearly 1.8 million pieces of luggage were lost, stolen or damaged by US domestic airlines in 2012.  This may seem a lot, but mishandling has been cut by 50% since 2007 thanks to digital processes in the industry, creating US $22 billion in total estimated cost savings.

And the industry is striving to cut mishandling further: lost baggage causes severe problems for passengers and costs airlines in compensation and delays.

IATA Resolution 753 called on airlines to ensure end-to-end tracking of baggage from June 2018, prompting some airlines to begin developing such solutions, though what they can achieve is constrained by different levels of technological preparation available in airports. 60% of airlines are investigating smart baggage tagging systems that work with mobile devices over the next three years. Delta in 2011 introduced its ‘Track Checked Bags’ service. This lets passengers track their luggage using Delta’s mobile app to scan their baggage tag with their smartphone camera. We will see more process automation (23% of airlines now offer unassisted bag drops) and passenger focused changes such as self-printing of bag tags available when flying with 86 percent of airlines from airport kiosks by 2019. (10 percent of airlines now even let passengers print bag tags at home).

The manager’s pilgrimage

New opportunity is critical to digital transformation. Airlines are becoming more willing to disrupt traditional business models to adopt fresh connected opportunities.

The huge quantities of available data will unlock brand new services airlines can offer, with 57 percent of airlines raising IT investment to grab these opportunities. We will see personalized services for regular travelers, premium targeted services, even all-you-can eat travel, for example.

SITA and Orange Business Services are developing self-service entertainment kiosks where travelers can purchase content from movies to newspapers to destination video guides, wirelessly downloadable to passengers’ devices. This can be offered free (Virgin Atlantic already offers free digital magazines to premium class travelers) or for a fee, building incremental income streams for airlines.

There are challenges, however, as internal and customer-facing technologies are upgraded. “At one point our customers had more insight into flight status on their mobiles than some of our employees, using PCs at the front desk,” Paul Elich, CIO at Dutch airline KLM told ComputerWeekly.

Realizing these opportunities requires a willingness to transform,  and partner. Sebastian Herzog, Managing Director and Chief Strategist of Lufthansa’s Innovation Hub told Airline Trends: “While Lufthansa traditionally sees itself ‘only’ as an airline, digital transformation drives the connectivity and interdependence of all mobility services. In such a scenario, it is important to understand and build ecosystems while proving the ability to share data and partner.”

Read more about how Orange Business Services is working to help unlock the digital opportunity with air transport industry solutions provider, SITA. Explore how the partners helped Saudi Arabian Airlines here.

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