By working with technology partners who understand the underlying systems required to solve digital transformation issues across large, complex, enterprise organizations, airlines can feel confident improving operational efficiency, profitability, and customer satisfaction.
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Digital transformation continues to be a vital undertaking for airlines during this critical recovery period. According to International Air Transport Association (IATA), total industry losses between 2020 and 2022 are expected to reach $201 billion. As a result, airlines are increasingly leveraging technology to solve pain points for passengers and employees, not only to optimize their operations, but also to drive revenue and long-term growth.
With legacy systems to untangle, complex business processes to investigate and reorganize, and new technology to test, making that shift is easier said than done. In this environment, airlines are undertaking more coordinated efforts to make digital transformation a “way of life” through technology like cloud architecture, mobile apps, and artificial intelligence. The key to making this leap is understanding the central business challenges and then continuously refining the direction to target essential needs.
“One of the first questions I ask my airline customers is, ‘What is the root cause of any problems today, in the context of your people, processes, and technology?’” said John Szatkowski, IBM’s global offering leader for travel and transportation. “The value isn’t one specific piece of technology or app, it’s solving a critical problem that gives the airline a better foundation.”
Reinforce the “House Of Cards” With Scalable Cloud Solutions
Guiding an airline’s journey into modernization starts with understanding how existing systems are intertwined.
“Some of the major airlines we are working with have thousands of systems that need to be modernized, deprecated, lifted, and shifted as part of a ‘cloud transformation’ project — and we need to figure out what to do with them,” said Szatkowski. “The hardest part is that it’s often a tangled web of systems created over the years. There might be 20 systems related to a process. It’s like a house of cards.”
Transformation doesn’t mean starting over — it means reinforcing what’s already part of an airline’s technology stack and removing inefficiencies. It’s important not to go it alone. For example, Etihad Airlines recently partnered with IBM Cloud to produce a more seamless airport check-in. With 18 existing integration systems, 12 major systems for check-in, and 270 unique processes needing to be catered to, it was a complex migration.
In order to make all of this work, Etihad had to deploy a hybrid cloud strategy. Without the help of technology partners like IBM, the time to research, cost to test and learn, and speed to market would have been on a much longer timeline. In total, the team created the new solution on IBM Cloud in just 15 weeks.
“The technology and moving to the cloud are the easy parts,” said Szatkowski. “The hard parts are the project management, people, and process transformations. That’s where consulting comes into play.”
Leverage Partners to Transform Complex Problems
As organizations with multi-faceted operations, airlines need systems that easily connect to each other and allow employees to handle issues on the move.
For instance, timely flights and smooth passenger flow are critical factors for revenue growth. KLM recently undertook a project to improve the aircraft turnaround experience for its ground-handling employees so they can access the information they needed easily in one place.
Working with an outside partner to assess the challenges and find a solution proved integral. Several ground crew members were invited to participate in a three-day IBM Design Thinking Workshop to discuss problems and solutions. While it sounds obvious to bring in end users and hear about their issues in the field, it’s not always common practice.
“There is nothing better than having the business team listen to their people talk, so we made a point to fly in the ground handlers,” said Erin McClennan, global design director for travel and transportation at IBM. “[Companies] often don’t realize the challenges their employees are facing, and there’s also palpable excitement when we co-create together.”
The workshop was “transformational,” McClennan added. By the end of the second day, the group had a mobile app design to help solve operational issues. By day three, participants received a beta version of the APPron mobile app, which integrates airline, cargo, operations and baggage data — putting the coordinators in control of turnaround.
“We can transform the way employees do their jobs because they have this amazing technology in their pockets,” said McClennan.
Connect Systems and Real-time Data for Optimized Operations
By using real-time data effectively, airlines can create connected cabins, improving turnaround times and the passenger experience.
“If a passenger tells a flight attendant that the IFE [in-flight entertainment] is not functioning, the flight attendant can capture that information mid-flight so the maintenance crew can fix it on the turn,” explained McClennan. “The next passenger doesn’t have the same complaint and the flight attendant doesn’t have to have that same difficult conversation — this kind of connecting of systems and real-time data transfer can have a real impact.”
Predictive maintenance is another area that can transform business operations in real time. McClennan and Szatkowski both agreed, however, that effectively implementing a predictive system falls on a spectrum. Needs vary widely from airline to airline depending on their people, processes, and technology mix.
For example, McClennan explained that many airlines are still relying on paper, and sometimes getting started on a path to “full-blown” predictive maintenance is as simple as modernizing systems to reduce paper usage. Others may be ready to build much more complex systems, such as a digital twin of an aircraft or engine that integrates operational, manufacturer, and IoT data sources — which take much longer to build.
“We are really focused on insights and process optimization, which is a consistent aspiration from client to client,” McClennan said. “We can help airlines wherever they are in the process — our focus is to help the client reach the ultimate goal, while still providing value at each step along the way.”
Improve Efficiency and Experiences With Artificial Intelligence
Airlines can harness the power of conversational AI for a variety of applications.
“[Chatbots are] about redirecting the transactional lower priority calls to automation and dynamically rerouting calls that have a higher priority to an agent,” said Szatkowski, adding that this type of service is ideal for airlines as they experience peaks and valleys of demand.
For example, AI-powered virtual agent IBM Watson (aka “Watson”) learns from customer interactions and knows when to search its knowledge base for answers, when to ask for clarity and when users should transfer to a human agent. According to a Forrester study commissioned by IBM, chatbot agents with Watson reduced handle time by 10 percent, and an analysis of four companies using the system reported an ROI of more than 300 percent.
In another instance, ANA partnered with IBM to bring customer feedback into a centralized, trackable system. Along with Salesforce Service Cloud, the airline brought together four global contact centers in the U.S. and Japan, providing complete, up-to-date customer views to enable better real-time service across communications channels. As part of the contact center, Watson Speech to Text visualizes customer conversations to help streamline information and enhance the insights gathered.
Power Personalized Interactions With Intelligent Data Systems
By using data intelligently to provide a 360-degree view of a passenger at any point on their journey, airlines can tailor proactive services to customers that will drive greater satisfaction and revenue growth.
ICAO (International Civil Aviation Organization) reported an estimated 25 percent to 29 percent decline in passengers in 2022 compared with 2019, but that’s now all starting to come back. As airlines compete ferociously to win back market share amidst spiking demand, their ability to understand customers’ changing expectations during this volatile time will be critical.
“We know so much about passengers, and I don’t think we’re using that data well,” said McClennan. “Data is now more easily connected, and there is a big opportunity to improve passenger experience by putting it into the hands of more employees.”
Consider the journey-transforming scenarios such as the following: Automated recognition of a flight with an unusually high number of vegetarian passengers on board triggers a timely increased delivery of plant-based meal options. Or a push notification upon landing advises passengers on baggage carousel number and how to get there.
As an example of leveraging this data during the booking process, IBM partnered with Malaysia Airlines on a “Personalized Pricing and Offers” email ad campaign based on AI algorithms. Malaysia Airlines customers receiving these personalized recommendations made 34 percent more bookings than those who did not. The uptake was even higher (54 percent more) for business class customers.
These are only several examples of how the data airlines collect from their customers, with consent, can turn a pedestrian flight into an unforgettable experience.
Ultimately, there’s no one-size-fits-all solution for digital transformation. As airlines consider where they are on the path to digitize their operations, they might have any number of starting points and milestones across departments and disciplines. By working with technology partners who have seen use cases and understand the underlying systems required to solve issues common across large, complex, enterprise organizations, they can feel confident improving efficiency, profitability, and customer satisfaction.
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