Five Key Insights from the Airline Industry on Digital Retail

October 11, 2022

Datalex rounds up some of the key insights from the recent T2RL Engage and World Aviation Festival events.

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The T2RL Engage event in London and the World Aviation Festival in Amsterdam were fantastic industry events filled to the brim with networking and excellent insights that focused on the future direction of airline technology and its power to transform how airlines do their business, and to drive a next level digital customer experience.  With so many great discussion and insights into the clear need for change in the fundamental airline technology make up – we have taken a look at some of the key insights and recurring themes from the event.  

  1. The digital “quantum leap” – Both events emphasised how digital has accelerated significantly post-COVID and the ramifications and initiatives that have sprung from that. Many airlines spoke about how digital at its core was accelerated during the pandemic because everything in the organisation was put on hold – except digital. This has helped get the wider airline organisation ‘on side’ with the inevitable transition to digital. The industry as a whole is clearly in desperate need of change to align digital with business objectives and that starts at the foundations with a fundamental shake up in an airlines’ technology make up – all of which has been driven by a ‘quantum leap’ in the digital space and the digital expectations of travellers.  

  2.  Offer is well understood; order is still more abstract – One of the key takeaways from the T2RL Engage conference was that the offer/order concept tends to claim to allocate equal understanding to both, when in actuality offer has a head start and order is trailing behind. Offer is very well understood throughout the industry and many airlines are doing this well. A perfect offer however is nothing without its order counterpart, “it is the art of not only selling, but servicing.” What was left unclear was that delivery element of the order – everything below the wing that will have to step up to accommodate such a shift. “The delivery part is key, particularly with the human aspect with the entitlements expected at an airport and how this comes up in the delivery system.” With order-based commercial environments as the vision, it’s clear that the DCS will need to step up so that order can be truly realised. 

  3. ‘Dynamic pricing’ is still a misleading term: airlines believe what they are doing today is dynamic – It was clear from the event that there is still an ‘old world’ mentality that is prevalent in the industry around pricing. ‘Dynamic’ is considered by many to be the current practice of optimising a completely static and inefficient system, which in itself is a paradox – and certainly not dynamic. Those airlines that still operate in the PSS world are constrained in what actions can affect real change. Conor O’Sullivan at Datalex explained the importance of having a future proofed AI-powered product that circumvents this old word system entirely and ensures that the system and product is ‘architected for the future world,’ – without the PSS. There were also concerns raised at the event around the hesitation in using dynamic pricing and the lack of trust there, with some wondering if it is ‘better to be right or to be dynamic?’ Conor pointed out that both of these are not mutually exclusive. A modern e-commerce system will determine instantly if a price is right or not leveraging AI and it will immediately retrain the model so that any inaccuracies are addressed straight away. 

  4. Digital Transformation is top of the agenda for innovative airlines – It was clear from both events that digital retailing and transformation is an absolute necessity in order to compete effectively in this new world. ‘You can’t just sit still,’ David Orzasky from Virgin Australia commented when asked why the time is now to go after digital retailing. He spoke about their next generation retailing strategy in partnership with Datalex as one of the top 3 priority projects. The company understands now that not only is selling different, you need to “service differently,” and digital initiatives that support seamless servicing is an imperative, with David reiterating that this is why ‘digital retailing is so critical for us.’ 

  5. Sustainability initiatives are gaining real ground – Many airlines spoke about the importance of Sustainable Aviation Fuel (SAF), with several noting how SAF demand was largely driven by corporate customers who are laser-focused on their sustainability objectives.  On another note, Director General of IATA, Willie Walsh said that there continues to be unwarranted and excessive blame on aviation and its impact on the environment. He highlighted the ‘misguided’ and disproportionate blame on aviation when compared to other industries.   

 

   

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