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PERSPECTIVES


A cockpit view of the
airline industry

Guido Haarmann, Vice President Airline IT, Amadeus shares how airlines can reinvent at speed & transformation in the airline industry.

Tell us about your role at Amadeus?
I am a Vice President within the Amadeus’ Airline IT business and leading the key strategic initiative of the regionalization within Central Europe. Additionally I am a member of the board of the Accenture/ Amadeus Alliance an active sponsor of our joint initiatives that aim to shape the future of travel.

What triggered your passion for Aviation?
The freedom it gives travelers to cross massive distance in pretty little time. This has inspired me when I started to work in this industry over 20 years back.

What are your thoughts on the current state of the airline industry?
The airline industry is at the verge of changing and becoming a customer centric business, driving for personalization. To achieve a competitive edge, airlines are in the process of re-thinking their operating models more drastically than ever before—from cost leadership to digitalized customer centricity. Also, advanced technologies allow real time interaction with all relevant distribution channels addressing personalized customer needs along the end-to-end travel value chain.

What are the key challenges airlines are facing today?
In our meetings with clients, we see that IT has reached a tremendous importance for the current and future airline business models and has gained immense power in the strategic business planning. In consequence we are facing substantial changes in organizational structures of airlines’ business processes and IT architecture – a complex “Business and IT transformation”. My take - the biggest transformation ever in this industry.

What disruptive trends are you observing in the airline industry?
Digitalization is – as in any other industry - disrupting the airline business models. At Amadeus we are closely involved with the travel related start up scene. Our venture companies Amadeus Ventures and Amadeus Next! which helps us to drive innovation for our clients. Over the last ten years, we have seen two important trends. Firstly, the exponential rise of data and information on everything from traveler behavior, spending patterns, weather events, systems efficiency and much more. Secondly, the increasing scale of computing power and storage capability, which is able to assimilate, process and work with multiple and complex data sources to generate.

What are the competitive challenges facing airlines today?
New entrants are disrupting all facets of the travel industry. New traveler expectations are challenging all airlines to continually improve how airlines operate. New sources of data and information are challenging travel brands to innovate in terms of how travelers are serviced and how disruption is managed. Insights and action—airlines need to quickly gear up in these areas to leverage the available data smartly to win the customer.

What is at stake if airlines don’t innovate?
The current business model. Our customers'
 operating models and business priorities are changing fast from pure cost leadership to digitalized customer centricity. In consequence airlines are facing a complex business & IT transformation centered in large scale, multi-vendor IT programs with complex architecture and interfaces to their legacy systems—a dramatic challenge even for high performance organizations. While facing the need to manage innovation at speed, the old CIO mantra of “Implementation on time and on budget“ remains mission critical in order to meet time to market requirements. If airlines don’t address this now, they have no chance to maintain a profitable business. I do expect quite some M&A action—just as we see with Eurowings.

How is customer centricity evolving in the aviation industry?
The future airline isn’t about moving people from A to B, unveiling new destinations and seamless online check in services. Instead it is about a thoroughly progressive, completely 360-degree view of the traveler and everything that goes into creating special, unique, memorable experiences. And to do so information and data needs to be gathered and deployed throughout the customer experience from the moment they are inspired or required to travel, to the time they return home from their trip.

Achieving superior customer experience will increasingly involve not only travel data, but also external data such as weather, geographical, social, media consumption and spend data. When companies are able to integrate and act upon both their own data and that of third parties, they will be equipped to develop breakthrough products, services and models.

Today’s airline IT organizations are pulled in different directions. How can airline IT organizations operate effectively while managing multiple business objectives?
Companies that succeed will be those that embrace the opportunities digitalization brings. But in addition, those that succeed will also be those that ensure that their systems and processes allow for the rapid generation of insights, as well as the rapid deployment of the actions needed to capitalize on those insights. The key to unlocking the potential of today is identifying the quick wins across the business to ensure incremental and impactful changes, as well as an open mind about what is possible in the future.

What value does the alliance of Amadeus and Accenture offer to the airline industry? How is the alliance between Accenture & Amadeus a game changer?
The strategic partnership between Amadeus and Accenture is the natural combination of two market leaders for end to end airline solutions and digital thought leadership. By combining these capabilities, we jointly support airlines to reinvent themselves at speed while leading the way to innovation. As partners we cut through IT complexity at speed to optimize systems through market-shaping innovations and thus serve quickly and effectively business needs. Accenture’s digital experience and innovation at the world’s leading companies combined with Amadeus’ deep industry expertise and unparalleled specialization in mass data management across all functions helps airlines developing leading innovations around customer centricity.

How can airlines pivot to innovative business models?
The joint expertise Amadeus and Accenture bring to the table, allows to cut through current IT complexity at speed to optimize systems through market-shaping innovations and thus quickly and effectively serving business needs. Accenture’s strong digital expertise—specifically from industries that have been affected by digitalization earlier like Retail and Consumer Goods—combined with Amadeus’ R&D skills and end-to-end industry expertise helps us build and deliver digital products & services, anchored in unparalleled analytics that drive immediate value for our clients.

What kind of a traveler are you?
Condé categorized travelers into 10 types—within that frame work I am definitely type no 10: The genuinely curious: Eyes, ears, mind all wide open.

What are the three things you prefer in an airline while travelling?
Convenience, service and safety—on the ground and in the air.

What advice would you give to someone looking to make a start in the aviation industry?
Boeing estimates global cargo and passenger traffic will expand 5 percent annually through 2032. To accommodate the growth, 20,930 aircrafts will be added to the world's fleet—so this growth will also drive further innovation. The airline industry will become even more fascinating than it has already been: Along with the transformation new types of jobs will evolve—in any way it is good to truly understand the processes and how airlines operate. Looking at that from the traveler perspective as well as airline operations drives the understanding of the industry. Starting in this industry will require a high degree of curiosity and flexibility to support reinvention.