2. Digital Acceleration
The future of aviation is digital. To thrive, airlines will have no choice but to become agile and flexible businesses by investing in new software, latest technology, and digital solutions, along with attracting qualified talent.
Several airlines are currently grappling with digital distractions, including legacy systems, disparate technologies, poor infrastructure, and cybersecurity risks. These hurdles are putting a toll on technology departments that lack the proper resources to invest and acquire advanced solutions that drive growth, effectiveness, and efficiencies. For example, automation techniques (such as touchless check-ins, advanced self-service and biometrics for paperless process, automatic baggage solutions) could strongly support the industry as it bounces back. But accelerating technology will require airports and airlines to plan better (from back office to operations) and create a digital ecosystem well designed to serve a seamless passenger travel experience.
But where to start? Company leaders should take a holistic approach to digital transformation, always adopting a customer-first lens into the decision-making process. Leadership teams should also ensure cultural readiness across all parts of the business, not just IT, to embrace a long-term vision that may not even pay off in its early days, but rather support long-term outcomes for the business.
Several aviation companies, mostly flag carriers and airline groups, are now starting to outline their digitization strategies, improving their readiness to overinvest in strategic initiatives such as AI/Machine learning, movement to Cloud & SaaS providers, and introducing intelligence analytics. Doing so has required the creation of entirely new departments dedicated to digital innovations or new roles in e-commerce, distribution, digital marketing, revenue management, and IT.
At the same time, investments in digital capabilities will support a better customer experience journey at several stages, such as strengthening health security measures at airports, accelerating the use of adaptive digital communication support, tailoring products and services based on customer and employee feedback, and offering a high quality free and unlimited internet connection. Customer data and analytics is another key component, which can be used to better understand and serve micro-segments of customers.
The real solution lies in understanding customer behaviors and preferences, and then using those insights to deliver a personalized, value-rich experience. Airlines can also significantly benefit from getting inspiration from leading customer-oriented industries, such as retail, which have succeeded in building true loyalty and providing tailored customer experiences and touch points that make each guest or consumer feel special and valued. A digital acceleration will also entail building close partnerships between airlines and their broader ecosystem (e.g., hospitality operators) to deliver a seamless experience while strengthening customer relationships.
Leadership Implications:
Driving a digital agenda will require full attention from a digitally savvy Executive Committee, propelled and challenged under the leadership of a visionary CIO, CTO or CDO, with full support from the board and CEO. While a long-term digital vision will be key, leaders must ensure that quick wins get visibility to generate positive momentum in the organization. Moving to autonomous agile teams and adopting a servant leadership culture are some of the ways that technology leaders have signaled serious change in the IT function. Ultimately, a digital transformation must be embraced across the whole organization and cannot succeed if it remains an objective for the technology team alone.
Several airlines have taken bold measures in this area, such a creating a fully integrated product organization that connects the dots between business needs, digital innovation, and data & technology implementation. But they could only do that with the right talent—by embedding digital savviness as a key competence in the recruitment and assessment of critical business roles across the entire organization, not only in the technology function. So where is the talent? The airline industry could benefit from hiring professionals from industries and companies that have succeeded in building superior customer experience, such as hospitality loyalty programs or digitally-driven businesses such as health tech or e-commerce.
Additionally, successful customer experiences require the board and the CEO to re-wire the culture of the airline from a focus on being an operator under heavy regulatory scrutiny to a truly digital commercial business that thinks customer first. This could include cultivating the board agenda to mandate a discussion and review of digital metrics and customer insights in every meeting. Last, but not least, the board of directors must also evolve and ensure they have sufficient representation of expertise through directors who truly understand and embrace digital transformation and innovation.
