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This article was provided by Mitrankur (Meet) Majumdar, US Vice President and Regional Head of Services at Infosys.
Global passenger traffic has dropped by 66% since COVID-19 ground airlines came to a halt, with 2020 being the worst year in aviation history. Even in the U.S., where leisure air travel returns with vengeance in the form of vacations, business travel is slowing. This is worrisome because business travel, although it accounts for only one in seven or eight trips, generates 45% of the revenue generated by the major airlines; Worst of all, recovery at pre-epidemic levels is at least two years away, especially on profitable international routes.
In this case, the airline industry needs to move faster to make its leisure travel business more profitable than it is today. Pricing is not an option in this highly priced business. Instead, airlines should focus laser on improving cost efficiency and quality of experience – both of which have been hit hard by the Covid-19 protocol – to make more money and revenue from leisure travel.
But before that, they need to further digitize and refine their technology in operation. The aviation industry continues to struggle with complex and isolated legacy systems and processes that make for sluggish, time-consuming operations and a far-ideal travel experience. The customer’s journey from planning to ticketing to review is fragmented because data does not flow seamlessly from one system to another. By adopting digital transformations, with the help of technologies such as Predictive Analytics, Artificial Intelligence, MRO Augmented / Virtual Reality and Internet of Things (IoT), airlines are able to integrate their technology landscape into operations. Data resulting insights can guide them to all the pain points of the operation and experiences that need fixing. The following are some of the major ones:
Use airline data to identify inefficient operations
Granular, high-quality data enables the aviation industry to discover hidden inefficiencies in operations. With fewer people flying in the sky, airlines may consider using smaller, cost-effective aircraft, rationalizing flight frequency, optimizing routes, and more. As traffic changes frequently and unexpectedly – people stop traveling if there is a sign of an increase, and many countries continue to ban flights – airlines have to provide current data, network optimization, flight planning, improved revenue management and automation software. Need a constant flow of infections, etc., making decisions regarding flight apps, fares and dispatch. Also, when airlines are able to predict demand, they can more efficiently manage their crew, ground staff, supply and maintenance needs. It is also possible to use live sales data to adjust the demand forecast; This technique improves both the speed and accuracy of the forecast.
The benefits of digitization can also be felt in everyday work. From the cockpit, pilots can cut through the red tape by digitally uploading their reports using a device attached to the gate. Ryanair has provided 3,500 pilots with electronic flight bags on iPads, removing paper manuals and charts. Pilots can also take advantage of apps that provide graphic representations of important data, such as the weather, to choose the safest route.
On the ground, smart fuel trackers give flight operations staff insight into areas with potential for optimization. In line with ICAO’s recommendation to report in-flight position every 15 minutes, airlines are using new systems that automatically send alerts if an aircraft does not report its status.
Getting personalized with airline data
In his book Next“The only number that matters is ‘one,'” writes Howard Schultz, a former Starbucks CEO. A cup. A customer. A partner. One experience at a time. “In theory, the airline industry agrees: In a 2019 survey, 78% of customer focus and personalization were critical to digital retailing. However, only 2% said they personalize their offers based on data, while 48% People offered the same to everyone. The limitations of legacy IT systems, including instability and lack of capabilities such as dynamic pricing and personalization, were clearly the biggest problems.
By adopting modern digital platforms, airlines can personalize items, such as bag fees – which are standard today – depending on the context; This will increase the ancillary revenue, which is a top priority for the industry. One airline claimed that using data to personalize offers could reduce advertising costs and increase revenue by about 3%.
Airlines should also take advantage of their ecosystem partnerships to become non-air ancillary sales, such as insurance, accommodation, transportation and travel, to become “all-in-one” providers or online travel agencies (OTAs). This is not just about cross-selling pieces of such products, which they have been doing for decades, but about providing a fully integrated travel experience. The point is that few airlines use the API – the foundation of a seamless, complete travel experience; Leaders with incidental income also earn modest amounts from hotel and vacation packages. With the right digital platforms, retail shopping tools, value-added services in flight and on the ground, airlines can earn much-needed ancillary revenue that they are currently leaving on the table.
In 2019, US airlines mismanaged 2.8 million bags: the best performing airlines mismanaged 0.15% of total bags; Worst, at four times 0.6%. Aside from the bad rep, such events could cost airlines fairly ($ 2.5 billion for the global airline industry in the same year). By connecting the system so that the bag can be tracked during its entire journey, the airlines have halved the baggage collection globally in the last 10 years. But they need to bring it down further – especially given their dire financial situation – for which strong data and analytics backbone are key.
RFID tagging – used in luggage tracking – is a rich source of data for baggage systems. By applying AI to these data, airlines can make luggage intelligent, so that it provides everyone with the real-time status they need to know during their travels. The Bahamas did this at Miami and Nassau airports in seven days. At the other end of the globe, Hong Kong Airports used AI to create a real-time baggage trolley supply system to address trolley shortages. There are other uses of luggage tracking data – it identifies areas for improvement in operational processes; Allows airlines to provide updates to customers so that they are fully informed at all times, and serves as an input for machine learning and computer vision technology to make predictions.
Airline data was turned on its head by the epidemic
The epidemic has turned the air travel revenue model on its head, leaving airlines to rely on the less profitable leisure segment for survival. Airlines can increase profits by focusing on data to eliminate cost inefficiencies and generate additional revenue by providing better experiences. This agenda requires a strong digital backbone complete with platforms, data and technology.
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