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The digital airline takes flight
SINGAPOREANS love to travel and of the total amount spent on airline flights, 46 percent spent are made via online channels. This is according to the latest Household Expenditure Survey, which takes data from 2012 to 2013 and excludes packaged tours, and with even more digital intermediaries stepping into the fray, and with more airlines improving their own online platforms, this trend has since accelerated.
The significant proportion of purchases made online here is no surprise, since Singapore has been ranked first in the world for using information and communications technologies to boost competitiveness and well-being by World Economic Forum’s Networked Readiness Index.
Similar to many industries, the digital revolution is transforming the value chain in the aviation travel industry. In order to understand the business challenges and disruption brought by digital technology, Accenture conducted 25 in-depth interviews with senior airline executives at leading premium and low-cost carriers, with the findings prepared in the “Digital Readiness for Customer Experience in the Airline Industry” survey.
The survey revealed that the top challenge facing the airline industry in adopting a digital strategy is in addressing key internal issues, such as cultural resistance, upgrading legacy technologies and breaking down operational silos. The second would be coming up with proper development and execution of digital strategies to enhance the customer’s experience.
This is coupled by the fact that intermediaries such as online travel agencies (OTA) and portals such as Google Flights have already established themselves as a key conduit for travellers looking to book the best fare for their needs.
Airlines recognise that they have to tailor their activities to the customer’s travel preferences, which leaves them challenged to strike the best balance between how much dependence and information is given to these intermediaries, versus how much they wish to manage in order to enhance their own digital offerings to reach customers.
Accenture’s survey reveals that while 65 percent of senior airline executives surveyed will share their customer data with intermediaries, more than 70 percent prefer customers to use an airline’s direct platform.
Some airlines are selectively opening Application Programming Interfaces (APIs) to increase third-party interaction. In such instances, establishing rules of data ownership remains an issue, as all participants in the value chain recognise that data is a crucial key to customer engagement and future sales.
Airlines possess three unique strengths to improve customer experiences and reduce the power of intermediaries. They include: ownership of the flight, which is the most critical piece of the value chain, leveraging access to richer customer insights, and being able to offer more touch points and meaningful services with customers.
Most of the surveyed airlines have already developed plans to build strong social media initiatives. Accenture’s study identified four main digital objectives for the airline industry to focus on: supporting self-service through mobile applications and websites; creating and leveraging a 360-degree view of the customer; expanding the digital dialogue through social media and third-party partnerships; and using real-time insights to enhance the personalized customer experience.
Some ideas include using mobile geolocation technologies to guide customers to boarding gates, VIP lounges or baggage carousels, sending digital vouchers to passengers’ mobile devices when flights are delayed, and making an app for customers to provide real-time ratings on the flight, crew, entertainment and food on board.
Digital technologies also present valuable opportunities to break down silos within airline operations, which then contributes to improved customer experience.
Having a safe, smooth, on-time journey is every passenger’s top priority. Digital technologies can help influence flight operations, ground operations, maintenance, marketing, sales, customer service and loyalty to operate consistently. The ability to deliver this information in real-time will provide a seamless and enjoyable travel journey to the passenger.
A significant impact can be made by integrating business processes with new technology and new cost reductions strategies. To achieve this goal, the study indicated that it will require a robust but flexible platform to connect customers, crews, staff, agents and partners. Digital innovation will impact every aspect of the airline industry. This provides an exciting opportunity for executives to leave old ways of working behind and take off to a digital future.