Can airlines speed up their adoption of new technology? And should they?


Digital innovation has been outpacing the rate of change in aviation for a while, putting airlines at a disadvantage to other companies, even in the travel sector.

IATA’s push for NDC, OneOrder and other digital innovations including hackathons, initially developed with tnooz, and the newly announced NEXTT program are intended to help airlines close the gap.

But can they speed up the rate of adoption and deployment of new technology in time?

One of the points raised during IATA WPS was whether airlines and even some of the technology providers are setting themselves up to fail by working with a project timeline mindset.

As technology in five years’ time is likely to be very different from technology today, will it do any good for airlines to set timelines five years off or longer to complete the initiatives they want to follow?

On the sidelines of WPS, tnooz listened to what industry thought-leaders have to say about it.

Goal-based deployment

Douglas Gaccione, executive vice president, global growth and marketing at Switchfly says he sees some regions embracing change more readily than others, with a few willing to take risks on new digital technologies and others following quickly thereafter once the concept has proven successful.

He suggests airlines might want to think more in terms of the problems technology solves than merely considering what it takes to implement new systems.

“Sometimes we need to step back and think about the goal. What am I trying to solve, what am I trying to accomplish and what is the ROI on that?

“If you say, ‘I’m going to have OneOrder done in the next five to ten years’, it’s going to take you fifteen years to do it.

“If you say, ‘I need to accomplish this specific task and I need to do it in a two to three year timeline,’ I think that you are lot more likely [to shorten] that amount of time.

“I think it’s interesting and brave to create accelerated metrics so that people have to deliver on the promises of NDC.”

Gaccione also shares an example of technology already adopted in a travel context which could also benefit airlines if they focused their digital initiatives on passenger-centric solutions.

“I think the best example I see is Disney bracelets that go through theme parks.

“It’s something that could be incorporated into a smartwatch on the airplane so quickly, where if you want to get a premium meal or maybe want to upgrade to a different class while you’re on plane or rent a movie, get a beer, something like that, you should be able to run that up.

“There was an analogy earlier to a restaurant where when you go and check out and depart the plane, or when you get back to your origin, that’s when you swipe your credit card and check out.

“You should this open running tab the entire time. It just makes it easier to spend money, make it easier for customer to have a second wallet.”

However, Gaccione did empathize with airlines and established aviation technology companies in having to adapt legacy systems.

“When you come into something that has a bunch of legacy technology and legacy code and you’re trying to enhance what’s already there without breaking it, to make it new and modern, that’s one of the most difficult tasks you can do as a technology provider. I think that’s the crux of it, but organizational structure has a lot to do with that too.”

airlines

Strategic mindset

Jim Davidson, president and CEO of Farelogix believes that there have been advances, crediting IATA for getting companies thinking of ways technology can solve problems.

He worries that airlines should ensure they have capitalized on the business applications of each initiative before getting distracted by the next.

“In the industry we’re always in a such a hurry to talk about the new stuff, but we never really let the existing stuff—that was recently new—to materialize.

“We tend to overlap ourselves with the next big thing and we never let our business processes catch up with that.

“This is pretty important. It’s where airlines are really consumer focused. It’s creating more revenue for them.

“If you look at this on a number of different levels, you say, ‘wow this is something that we haven’t seen in a while.’

“Consumers are happier, airlines are happier. Airlines are investing in their product. We’re seeing higher quality of services and product. Let’s let that really materialize.

“I think airlines are now focusing on creating the offer, a dynamic offer, and they haven’t given any thought on how to use the constraints in place today.

“That might mean limiting what they do on the offer side…we haven’t delivered even some of the offers to the regular airline infrastructure and to expect airlines to expect to pull out some of that infrastructure over the next couple of years is probably overambitious.

“We’re in the infancy. Good retailing comes from experimentation. We’re just barely getting into the experimentation phase, in terms of how we bring in decision science.”

Customer first

Susan Doniz, CIO of Qantas, who came to the airline industry as an outsider, also shares her views on how airlines compare to other industries in deployment of their technology initiatives.

What she says is aligned both with the views of Gaccione and Davidson, striking a balance that pinpoints what matters most for airlines as they advance in the race for optimized IT.

“When I came in [to the airline industry]..I was really shocked at how much legacy and customization exists in this industry. I understand now why, because there is so much regulation and you put processes on top of processes, but there’s no time to step back and look at simplifying.

“There’s also a little bit of ‘[putting] projects over products’. We’re so busy with all of this project work, and we’re running 24/7, so there doesn’t seem to be this time to step back and escape where the pack is going to—[we] just react to everything that’s happening.

“That was also a huge observation for me: how can we carve out the time to look at our future destiny, and our strategy when we’re so busy looking at the here and now?

“[What] was really interesting in a positive way is how much we rely on each other and how much collaboration there is across the industry. In other industries I’ve been in it has been very competitive, even almost at the detriment of the customer.

“What I see here is that often times we’ll hand off the customer from one competitor to the other and we’re all trying to make this a great experience for the customer. For me, that is really a very heartening thing to see. We’re all passionate about making things great for the customer.

“But I think we still have a long way to go because I don’t necessarily think we’ve always put the customer at the core of everything we’re doing.”



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