What airlines are doing to master digital transformation

Discover how airlines are embracing new technology to get closer to the customer.

Posted September 19, 2018

Key components of digital transformation include leveraging technology to solve problems and identify synergies. For airline companies, this means improving connections with their customers — and their flight connections in the process.

The industry’s adoption of next-gen technology — including artificial intelligence (AI) and advanced data analytics — is helping streamline the passenger journey, enabling more immediate and personalized service, while at the same time boosting revenue.

Here’s a look at a few key areas where digital transformation in the airline industry has really ‘taken off’.

The customer data advantage

Airlines already have a significant advantage in boosting digital initiatives thanks to the vast volumes of data they have gathered over the years through frequent-flyer programs as well as statistics from customers’ online interactions. However, the management and application of that data continues to be a challenge for the industry.

As a result, some airlines are making digital innovation the focus of separate divisions and leaving the core group to manage operations, which is the case at the Lufthansa Group. The German airline has found success by establishing the Lufthansa Innovation Hub, which applies agile development practices to advance digital applications. The division is tasked with imagining and delivering the future of air travel to enhance the customer journey on the ground and in the air.

A key focus of the initiative is personalization, as Gleb Tritus, managing director of Lufthansa Innovation Hub, explained in a Medium post:

“The steadily growing number of data points during a trip is fueling the topic of hyper-personalization, as premium airlines such as Lufthansa, as well as hotels and mobility providers will be able to individualize the customer experience. In the future, a flight attendant will know if the lady in seat 13A likes tomato juice, the in-flight entertainment system will suggest the TV series she didn’t finish watching the night before at home, a taxi will automatically be booked at her destination airport, and her family will receive alerts about delays and gate changes when she travels back home. The next step will see this individualization spread along the entire travel chain. As providers become connected and intertwined via standardized data interfaces, the travel experience will at first become individualized, then truly seamless.”

It’s not only flagship airlines investing directly in their digital transformation. European low-cost carrier, Ryanair, has committed itself to becoming “the Amazon of travel” by building direct digital relationships with its customers. The airline now has development hubs (aka Travel Labs) in Ireland, Spain and Poland, employing more than 650 people.

Ryanair Chief Marketing Officer, Kenny Jacobs, told travel news site Tnooz that new technology applications can increase revenue by offering customers tailored products throughout their journey, as well as providing relevant information, such as travel content and local guides, to create stronger bonds with customers. The impetus for the content strategy is simple: “People love to travel, they love to talk about travel, and they love to read and see what other people have to say about their travels.”

Investment in technology

The airline industry is using the current digital environment to experiment with cutting-edge technology to enhance the customer experience.

For instance, Air New Zealand has explored mixed reality, as well as simultaneous translation for its multilingual customer base using Google Pixel Buds. Delta Air Lines, meanwhile, has made big leaps in tech, including RFID baggage tracking and biometric gate and lounge passes.

AI is also a popular area of focus, especially when it comes to airline customer service. Air Canada now has an intelligent voice assistant to help deliver a more personal touch to their digital interface.

Mark Nasr, Air Canada’s vice-president of loyalty and e-commerce, has said that AI can help the airline be everywhere the customer wants them to be:  “Customers have certain preferences… of how they like to interact with their tablets, smartphones and computers, and the mode in which they want to communicate. It’s our point to be present and available across those different channels, and make ourselves available by the preferred mode of the customer.”

Airlines are also getting into the venture-capital game, searching for, recruiting and sometimes acquiring start-ups working on technologies with interesting in-flight applications. As an example, JetBlue Technology Ventures has partnered with Air New Zealand to help manage all of the opportunities for innovation in air travel coming out of Silicon Valley.

Customer service requires a human touch

While digital technology can help airlines build closer and more meaningful relationships with their customers — a ‘human touch’ remains the most important element of their customer service delivery.

A recent report from the International Air Transport Association (IATA) highlights that the airline industry will still need to have qualified, caring agents to support companies’ growth. “Technology on its own is not enough to provide excellent customer care,” Brendan Noonan, vice-president of talent development at Qatar Airways Group, said in the IATA report.

“I remember in the early days when self-check-in machines first came in, a customer survey asked people if they’d prefer to be checked in by a machine or a person. The preference was for a machine but the really interesting bit was the reason given – it was because the machine couldn’t be rude to them! That was a big wake up call for me. It proved that customer service is the single most important thing in the air-travel experience.”

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