My Introduction to the Air Transport IT Summit 2014

Ladies and gentlemen, welcome to the 2014 Air Transport IT Summit, jointly hosted by SITA and Airline Business.

This year the theme for our IT Summit is: ‘More Ground To Break’. In choosing this theme we wanted to capture the exciting things that airlines and airports are achieving with IT and communications. But we also wanted to look ahead to consider how to build on those achievements, and focus on the potential for technology to deliver even more value to the air transport industry.

In preparing for this Summit, our research with previous delegates and customers told us that you wanted to hear about how IT can drive industry transformation, and how IT supports the industry’s change agenda. What trends and technologies will help us evolve the passenger experience – while anticipating the demands of air travel of tomorrow?

One major factor shaping air travel is the increasing expectations of tech-savvy passengers. Nine out of ten of the world’s airline passengers say technology helps them when traveling… according to SITA’s Passenger IT Trends Survey. Over three quarters of them carry a smart phone when they travel…compared to just 28% in 2010.

Yet usage of mobile services, such as: check-in and booking – is still below 5%. With passengers at the edge of really ‘going mobile’… this is an excellent example of an opportunity to break more ground.

We must also plan for growth. By 2017, we can expect: 4 billion passengers, a growth rate of 5.6% a year… and 5.5 million more tonnes of freight – a growth rate of 3.6%… that brings the total to 37 million freight tonnes.

From an airport perspective, ACI figures show that passenger numbers will ‘more than double’ to 6 billion by 2031.

With that order of growth, along with higher passenger expectations, our industry will need to break new ground – in order to work in much smarter ways. This means we must harness the full potential of technology. We know the industry recognizes the value that technology can bring to its customers and operations.

Three-quarters of airlines expect to invest more heavily in new IT projects this year – according to our 2014 Airline IT Trends Survey. This is corroborated by our latest Airport I.T. Trends Survey – which records a rise in airports’ total I.T. spend to $6bn in 2013… versus $4.3bn in 2010.

So if I may be so bold as to propose the drivers of the industry’s IT, they are:

  • Improving airport operations;
  • Enhancing the passenger experience throughout their journey; and
  • Improving manpower efficiency and effectiveness, and
  • Services for connected aircraft

Common to all of these are quality data and business intelligence. Better intelligence is the heartbeat of a smarter air transport industry. 100% of airlines and 90% of airports are investing to provide business intelligence across their operations – according to our IT Trends Surveys.

Within the 24/7 ‘connected everywhere’ air transport environment… ground-breaking change will come from the power of this intelligence combined with advances in:

  • Social media…
  • Mobile…
  • Analytics, and
  • The Cloud.

This combination lies at the root of services to passengers:

  • from managing flight disruptions
  • real-time flight and bag status information
  • to searching for fares.

We have, I suggest, only just begun to scratch the surface of the potential in: merchandising… tailored advertising… personalized customer interactions… and more.  This is across multiple touchpoints and channels, on the ground, and now of course, in the air.

As we move towards real-time analysis and use of data, as well as predictive and prescriptive analytics, there is great potential for airlines and airports to evolve increasingly smarter operations.

To truly harness this potential, we must work together to exploit the data and intelligence that will truly break new ground for our passengers and operations.

African Airlines Rising in Airline Strategy Awards

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Last Sunday I was privileged to announce and present the SITA-sponsored Award for Executive Leadership at the “Airline Strategy Awards” held, as always, at Lincoln’s Inn in London.  The very well deserved award went to James Hogan, the CEO of Etihad Airways, from Abu Dhabi.

I was very struck by the fact that two of these prestigious awards went to African airlines – the first time that any airline from Africa had won one of these awards.

The CEO of Ethiopian Airways, Tewolde GebreMariam, won the Regional Leadership  Award. He won because Ethiopian Airways has delivered consistent profits whilst expanding its network and fleet.

The CEO of Kenyan Airways, Titus Naikuni, won the Airline Business Award, awarded by the magazine’s Editor.  In the 10 years that Mr Naikuni has been CEO, Kenyan Airways has trebled its revenues and doubled its fleet.

This is a very interesting development and shows how quickly the world and the airline business is changing.  Parts of the African Continent are now experiencing fast growth.  The World Bank reports that the economy of Sub-Saharan African countries grew at rates that match or surpass global rates.  The rate of return on investment in Africa is currently the highest in the developing world.  During 2011, Sub-Saharan economic growth rate was 4.9%.  Excluding South Africa, which accounts for over a third of the region’s GDP, growth in the rest of region was 5.9%.

Trade has driven much of the growth in Africa’s economy. China and India are increasingly important trade partners with 12.5% of Africa’s exports being to China and 4% to India.

It is therefore not surprising to see African airlines rising, and it was good to see this recognised at the Airline Strategy Awards.

As an Airline, which Retailer are you like?

On the 18-20th June, airlines at the Air Transport IT Summit will be reflecting on how IT can help them boost their profitability and efficiency, and bring about better ways of working. As Chair of SITA, the air transport provider, I will be host at the Summit.

Among the many topics, ancillary sales will be one area under scrutiny at the event. With the airline industry as a whole just about achieving profitability in tough conditions – including slowing economic growth and rising oil prices – ways of boosting revenues through retailing are clearly high on the industry’s agenda.

I believe there are real opportunities here for airlines. Ancillary sales are claimed to have delivered as much as 5% of global airline revenues in 2012, according to estimates from IdeaWorksCompany. At the same time, 100% of airlines now have a presence online in the ‘virtual high street’, selling through their web sites, according to the Airline IT Trends Survey by SITA and Airline Business.

So many airlines are focused on ways of increasing retail revenues. In addition to the web, airlines now have new passenger systems, big data, social media and other new technologies at their disposal, which can enable them to become much more effective air transport retailers.

What do I mean by this?  Airlines will be able to make personalised offers to passengers, presenting an array of additional products and services that can be bought and making recommendations to customers in ways similar to Amazon and other retailers. There are opportunities to up-sell and cross-sell every time a passenger interacts digitally with the airline. Harnessing social media and big data will also enable airlines to look beyond their immediate loyalty programmes and target other potential customers with customized smart offers.

But I have a word of caution. While the technologies are definitely there to enable increase retail activity, airlines need to be sure of what their customers will or won’t find acceptable when they receive a targeted offer. There are boundaries. So before you embark on this journey of ‘retail enablement’, as an airline find your retailer analogy and ask yourself: which retailer are you like?

The topic will be discussed in detail in the next issue of Air Transport IT Review, to be available at the time of the Air Transport IT Summit.  

You can join the conversation on the Linked In ‘Air Transport Information Technology’ group. 
http://www.linkedin.com/groupItem?view=&gid=4443272&type=member&item=240648445&qid=55bb10fc-c497-42ef-a981-8dd3d6f31719&trk=group_most_recent_rich-0-b-ttl&goback=.gsm_4443272_1_*2_*2_*2_lna_PENDING_*2.gmr_4443272.gde_4443272_member_240648445.gmr_4443272

And you can follow this year’s IT Summit at #ATIS2013

BIg IT Trends in Air Transport

As Chair of the SITA Board I’ll again be hosting the Air Transport Industry IT Summitin Brussels, which this year takes place on June 18-20. Remarkably, this will be the 14th Summit. I put the endurance of the event down to its focus on the big social and IT trends that air transport CIOs and other industry IT professionals are having to grapple with.  

Of the many trends we’ll be discussing over the course of the event, three in particular promise some exciting developments in air transport and I’m sure we’ll be hearing a lot more about them.

The first is retailing by airlines, or more specifically ‘retail enablement’. Airlines need to become much savvier at retailing when they engage with their customers. They need to look beyond the core task of moving travelers from A to B, as well as beyond their frequent flyer programmes, and focus on the entire customer relationship. IT is essential, but charting the course will not be easy.  

Then there’s the promise of BigData. Airlines, airports, tour operators and others will need to realize this promise and capitalize on the benefits of big data analytics. Again, we need to chart the way forward as an industry and as individual organizations: not just to gain better profiles of customers but also to gain insights from the vast amounts of operational data that our industry generates.

My third trend to watch at this year’s Summit is the so-called ‘mobile explosion’. We’re constantly hearing about the efforts of airline and airports to innovate in mobilizing their workforces and empowering passengers through their smartphones. The potential for mobile to enhance operations and CRM is vast, bringing with it the need for the industry to relook at processes. We will also see a big future impact on air transport coming from other industries, such as banking and retail, as mobility permeates their ways of working.

I think these are transformative times for the air transport industry and IT trends like this are at the very heart of it.

You can join the conversation on the Linked In ‘Air Transport Information Technology’ group. 
http://www.linkedin.com/groupItem?view=&gid=4443272&type=member&item=240648445&qid=55bb10fc-c497-42ef-a981-8dd3d6f31719&trk=group_most_recent_rich-0-b-ttl&goback=.gsm_4443272_1_*2_*2_*2_lna_PENDING_*2.gmr_4443272.gde_4443272_member_240648445.gmr_4443272

And you can follow this year’s IT Summit at #ATIS2013 

 

Closing of the SITA/Airline Business IT Summit 2012

This is my summing up of the Closing of the IT Summit

Key themes that came up were the ones I had highlighted at the start

Cloud

Big Data

Social Media

Mobility

I also picked two other key themes that had emerged during the Summit, one a business theme:

How the whole air transport eco-system and community has to join up for customers at the same time as airlines and airports compete intensely with each other

and a techy theme:

How web services will enable the joining up of the industry.

There seemed to me to be remarkable convergence during the day on these six themes.

Joining it all up using technology is of course where SITA comes in.

We need to pull it all together to make it easy to fly.

SITA Air Transport Industry Summit 2012

This is the 13th year that SITA has run – in partnership with Airline Business – the Air Transport IT Summit

We feel that it is now established as the top IT event in the air transport industry’s calendar,  it is the recognized platform for CEO’s, CIO’s and other industry leaders to address their peers across the air transport industry, as well as the wider community. 

Tony Tyler, Director General and CEO, IATA, Khalid A. Almolhem, Director General, Saudi Arabian Airlines and Alex Cruz, CEO, Vueling are among the prominent list of speakers who will address a range of topical industry issues to an audience of senior level delegates from all over the world.  For a full list of speakers and the  topics they will discuss visit www.sitasummit.aero

I very much hope to see you there.

Is the Airline Industry becoming like Retail?

In my latest article in Airline Business I examined the increasing convergence between the airline and retail industries as customers become ever more connected and the way in which technology developments will shape both their futures
I thought readers of this blog might be interested:

A popular theme for airline industry conferences and discussions is how the sector is becoming increasingly like retail.

This is perhaps a bit unfair since, in my view, retail itself is in many ways catching up with the air transport industry. In the UK and the USA many retailers are now going through the “between 20% and 30% of revenues online” barrier – in other words, the point when online moves from an interesting additional channel to market to the mainstream.

This is a stage which most airlines reached mid last decade. Nothing surprising here, given the different nature of the product that airlines and retailers sell – one which is simply a permission to fly and the other a physical product in a shop, or ordered online and delivered from the warehouse.

These industries – and arguably most others too – are converging, however. Travellers and shoppers are the same customers, after all. Everyone is connected all the time everywhere these days, through iPads, smartphones or laptops. These devices are increasingly used not just for personal or business use, but for both. Both retailers and airlines understand that a website is not enough. Customers expect the companies they buy from – and interact with – to be present not just online but in the mobile world of tablets and smartphones, and – of course – out there on Twitter and Facebook.

Just as we in 2012 present ourselves seamlessly in multiple channels as individuals, so we expect our preferred airline or shop to be there too. We expect them to communicate with us appropriately, we expect our business relationships to be just as channel-savvy as our personal relationships. So, for a complex transaction like a round-the-world holiday or a complete house redecoration, we expect human interaction and advice in person.

For an update message that our flight is cancelled because of fog or our online order is ready for collection at the store, we expect a message on our mobile device. And, in between, we may be interested in staying in touch with these businesses through Twitter and Facebook, and in looking at their newest products or their newly launched advert on YouTube.

For airlines or retailers that aspire to be brand-leaders, however, even transacting seamlessly across the channels is not going to be enough. You need to be able to engage customers in your product and get them to associate with your brand and its values. No longer is this just about TV advertising – or indeed paying Google to promote your products in its search listings. It is about creating an experience that reinforces customer loyalty and provides your best customers with benefits and privileges they really value.

Some of this will be delivered in-store – or in the lounge, or on board – but increasingly it will be about connecting with them in the periods between shopping or flying.

Airlines – because of the connectivity limitations and long-standing concerns over interference – have been the one place on or above Earth where you could not be connected. In the last few years this has come to an end, and we are seeing wi-fi on board and mobile and internet connectivity increasingly provided or planned. In the same way, we are now starting to see wi-fi provided for free in-store by retailers, with tailored landing pages. This is also being extended into how airlines connect with their customers before and after they fly, such as the Malaysian Facebook for groups application.

Intriguingly, airlines are now looking to retailers for inspiration – John Lewis in London and Tesco in Korea have used matrix barcodes, known as quick response codes, in public places or other stores to sell their online assortment of products. The customer scans the code and then checks out.

These have appeared at several airline retail conferences, presumably because of the potential read-across to airlines which could use onboard connectivity and the entertainment screen to facilitate customers ordering ancillary ranges of products online.

On their websites, airlines and retailers are using the same methods to encourage up-selling and cross-selling across their product ranges. In conclusion, this is what technology has done for business. Increasingly, all businesses – whether selling flights or sofas – are becoming more similar, as customers buy and interact seamlessly with them and each other in the omni-channel world.

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