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The International Air Transport Association (IATA) expects 7.2 billion airline passengers in 2035 – almost twice the 3.8 billion air travelers in 2016. This is a dramatic rise in just under two decades. Given the high costs associated with aviation infrastructure, it is not likely that a simple expansion in physical framework will be a sufficient response towards addressing these massive numbers. A very substantial enhancement in efficiencies will play a crucial part in handling this escalation in volume.
The commercial aviation industry is, in fact, one of the more obvious candidates for digital transformation. It is probably accurate to say that such an evolution is essential for the industry to continue to deliver the high standards of service that passengers have become accustomed to. The aviation industry faces several challenges in addressing its anticipated exponential growth – it needs to address rising customer expectations, meet more stringent environmental regulations, make optimal use of resources, maintain and improve upon safety records and control costs through it all.
As with other process-oriented industries, collating and interpreting data is the key to unleashing the untapped potential of the aviation business. To this end, the industry is leveraging automation, several AI-enabled processes, big data analytics, IoT, cybersecurity, mobility and blockchain, among other innovations.
SITA’s Air Transport IT Trends Insights 2017 reports that more than half of the airlines that were part of the study are planning significant artificial intelligence (AI) initiatives over the next three years. From real time predictive pricing and personalized (offers) air travel experience to chatbots that recommend upgrades or ancillary services based on the customer profile and consumption habits. AI and big data analytics will allow airlines the adoption of a new business model based on merchandizing and retailing on individual-centered offerings which at the end, will increase airline revenue and customer satisfaction. In addition, AI will allow the aviation industry to operate at optimal cost to profit ratios through targeted sales.
AI will also radically transform customer experience and engagement at airports. Malaysian low-cost carrier Air Asia has initiated the use of self-check in kiosks that utilize facial recognition technology to confirm the identity of a customer by running a match to the passport photo they have submitted.
Others, like JetBlue, Delta, and Scandinavian Airlines initiated the use of biometrics in the boarding process as well, expediting the boarding process and reducing turnaround times which optimize their fleet utilization.
Lufthansa is using virtual reality headsets to enable passengers to experience the airline’s premium economy class services, seats and legroom before they board, which has sharply escalated the rate of upgrades from the regular economy class. United Airlines has a tie-up with Amazon Alexa that manages the entire flight experience for their customers – from receiving ongoing updates and offers regarding their flights, to automating the check-in process.
The aviation industry is experiencing a strong growth in the adoption of cloud-based applications and the use of big data. Machine learning automates the collection and processing of huge volumes of data, enabling real time actionable insights that impact internal as well as customer facing processes – introducing unprecedented efficiencies and maximized returns.
Virtual AI assistants are yet another emerging innovation that will allow airlines to be more productive and deliver remarkable standards in safety. These AI automated assistants will help pilots with repetitive tasks like changing radio channels or reconciling weather and wind forecasts with flight plans and paths.
Airlines are using digital transformation to deliver real time pricing, agile operational capabilities, enhanced systemic integration and transparency in processes. The impact will be felt across the entire supply chain through upgraded passenger experience— in-flight and at the airport — and operational efficiencies actualized through streamlined maintenance, operations, and services costs.
There is a widespread acknowledgement among aviation sector stakeholders that deploying an effective digital strategy is a non-negotiable pre-requisite for long-term success. No longer are the benefits accrued from digital technology limited to small gains in process efficiency or marginally lowered operating costs. The emergence of several of the latest generation of digital technologies holds the promise of truly dramatic transformation. What’s more, in a highly competitive market, digital technologies provide aviation companies a means to leap frog established competitors through the means of innovative solutions – as well as warding off competition from disruptive upstarts that are empowered by being effectively digital native.
Digitization is transforming not only the airline industry, but extends to the entire travel ecosystem. Airline customers increasingly expect more comprehensive travel support throughout the entire travel life cycle. Airlines must focus their digital transformation initiatives on individual-centered offerings and adopting a more cooperative position in the travel ecosystem. In this way, airlines will be differentiated.