By Maher Koubaa, Amadeus Executive Vice President Airlines, Middle East, Africa and Turkey,
From tsunamis to ash clouds and global financial crises, the travel industry has seen its share of setbacks over the past few years. The industry has always handled these events with admirable resilience and managed to bounce back quickly from each disaster.
COVID-19 is different. The global pandemic has had an unparalleled and devastating impact on the aviation industry with airlines grounding their entire fleets for months. Over 60% of flights were cancelled worldwide, with bookings in April 2020 alone dropping a staggering 95% compared to the same month the previous year, and 75 million jobs are said to be at risk. Yet there is light at the end of the tunnel as some countries have started to open their borders and air travel is tentatively resuming.
Although the future is uncertain for everyone – and especially for those in the travel industry – history teaches us that change is inevitable and unavoidable. As we see a cautious return to the skies, and we rethink the future of the industry together, innovation will be key to overcome the challenges and emerge stronger from the crisis.
Looking to the future, we foresee a number of innovative trends which will drive recovery in the airlines industry.
1. Focus on delivering a frictionless traveller experience
Simple activities in our lives like a trip to the grocery store are now difficult, risky, or even prohibited, and it is therefore understandable that travellers will be hesitant or anxious to board a flight in this new COVID world. To rebuild traveller trust, it is imperative that airlines address these fears while they continue to focus on delivering a seamless traveller experience.
Technology lies at the heart of this goal. Innovative technologies mean that traveler preferences can be addressed at every stage of the reservation process, as airlines can use secure customer data to customize services. For passengers, this means faster and simpler check-in procedures as well as re-accommodation in a matter of seconds in times of disruption.
During the current period of uncertainty, relevant real-time information is more important than ever before.
2. Improve airline systems to allow for agility
COVID-19 has effectively reset the travel industry. Every tourism company and airline is taking a hard look at its operations, re-assessing its ways of working and adapting to the ‘new normal’. In this new world, the ability to make fast decisions has become crucial.
Over the past few months, many airlines scaled back operations and refocused some of their fleets to support repatriation flights and medical supply shipments. Technology played a critical role in helping carriers achieve agile aircraft configurations.
Airlines repurposed their aircraft by adding cargo space to flight cabins and some added extra space around passengers and families to apply maximum safety measures. Key to this agility was the seamless integration between airline systems from inventory to reservation, departure control, and offer management; all core Passenger Service System (PSS) capabilities.
Fully integrated PSSs for example enabled airlines to easily deploy real-time seating, cabin, and cargo reconfigurations. Business rules and other setting adjustments could all be configured from a single user interface for automatic and flexible application across the airline’s entire network, by market, origin, and destination and other variables.
Looking to the future, fully integrated systems also mean that even if unforeseen events like last-minute aircraft changes occur during operational windows, airlines can immediately and automatically reseat passengers and adjust weight and load balance. With end-to-end automated aircraft configuration and reconfiguration, airlines avoid expensive, time-consuming and resource-intensive manual intervention.
3. Collaboration and consolidation in aviation
It is likely that consolidation and concentration will lead to a major industry reshaping in all regions. Some airline groups are expected to become stronger, accelerating strategic investments, while others may not recover.
We also anticipate a number of significant changes in the aviation landscape with new codeshare and interline agreements between different parties.
Smart airline inventory management solutions use advanced availability management techniques, dynamic customer identification and sophisticated airline policy controls to automate flight schedules, codeshare agreements, re-accommodation and seating. This helps maximize airline network yield, increasing revenues and improving efficiency.
Collaboration has been important through these past months, as aviation stakeholders along the value chain unite to ensure the survival of the industry. This is where the community element of PSS comes in. By giving a community of airlines common processes and core functionality, technology partners can develop additional IT solutions for airlines such as loyalty management, revenue management and financial management systems.
4. Explore smart revenue models
The International Air Transport Association (IATA) released analysis showing that the airline industry’s global debt could rise to $550 billion by year-end; a $120 billion increase over debt levels at the start of 2020.
With these alarming numbers, it is clear that modern, state of the art revenue management will be crucial for airlines to move quickly to recovery. Amadeus has incorporated artificial intelligence and machine learning algorithms into its revenue management solutions to be prepared for shifting trends and travel demand. Although these solutions often rely on historical data to understand behaviours, Amadeus’ Altéa Passenger Service System, which sits within the Amadeus Airline Platform, has shown great resilience in the current market context, building models where there is no precedent upon which to rely.
The ability to detect the patterns of recovery at different market, country and route levels, will allow airlines to make quick, efficient, and smart revenue management business decisions.
As we continue to navigate COVID-19 and prepare for the future, collaboration with our customers and partners is central for travel to pick up again. Amadeus is working side by side with our airline customers to support them on the road to recovery, employing our technology to meet current and future needs as we rethink travel together.