The evolution of the airline industry continues to accelerate. Earnings have declined and pressures continue to mount for airlines to lift their revenues in the face of ever-increasing competition. The benefits of consolidation in North America have run their course, and consolidation elsewhere in the world will likely come in small increments. Cost reduction efforts are now more difficult to effectuate, and indeed, labor costs have significantly increased over the past seven to 10 years in many regions of the world. While carriers have taken many different routes to try to bolster the bottom line, we believe it’s time to take a different strategic approach.

If airlines focus efforts on improving customer experiences and building loyalty, we believe carriers will enjoy a substantial direct impact to their profitability. The state of new technologies, if properly designed and deployed, are now at an inflection point to finally deliver on the many past promises. We now are deploying technology to deliver hyper-relevant, tailored experiences to airline customers to allow them to experience frictionless travel every time. Let’s walk through some of these possibilities:

  1. Know the customer

    Customer intimacy is the key to customer loyalty, and data is the connector. Airlines have a wealth of data on passengers—from most-traveled routes to seat choices, meal selections and preferred methods of communication. The problem is, most airlines do nothing with it in large part because of the limitations of their existing CRM systems.

    Now the future is here. A small but growing number of airlines are combining all of their customer data to create a 360-degree view of each customer. By keenly understanding their customers’ travel behaviors and preferences, airlines are beginning to roll out systems that are capturing the hearts and minds of customers by delivering exactly what they need.

    One powerful example from the travel industry is Carnival Corporation. Carnival Corp. has developed “Guest Genomics” that combine streaming analytics, contextual awareness and machine learning to create a unique picture of each guest. The Guest Genome allows crew members and staff to anticipate guest preferences and personalize each interaction. These meaningful, frictionless customized experiences build loyalty in the Carnival Corp. brand among customers.1
  2. Improve front-end digital

    As with any customer-facing industry, there is an increased push to use digital to enhance interactions. There is great potential to do so on the front-end of travelers’ experiences with airlines. Apps, chatbots and artificial intelligence (AI) are just some of the ways to use technology to connect more strongly with customers.

    For instance, Avianca created an artificial intelligence-enabled chatbot that customers can use through Facebook messenger to simply and intuitively manage their travel at their point of need. Customers can check in, confirm itineraries and more without the need to download an app, make a phone call or visit a website.

    Also leveraging new AI technology, Japan Airlines (JAL) and Accenture announced this month the roll out of AI-driven voice recognition technology to ease JAL’s customers’ check-in experiences at airports. The service assesses what check-in counter agents are saying to passengers and then pushes relevant information to the agents’ tablets in near real-time, which includes additional relevant information tailored to the individual’s journey. JAL and Accenture are piloting the AI-enhanced service at its international check-in counters at Narita Airport and Haneda Airport.

  3. Be hyper-relevant
    Rather than thinking about the business bottom line, think about your customer and the rest will follow. Airlines have the power to deliver the right offer at the right time based on the knowledge they have of a customer. Look at each consumer and his or her end needs and work back from there. Think about how technology can help you to deliver exactly what a customer wants—in that moment.

    For example, the RIOgaleão airport in Brazil developed a connected traveler platformthat delivers consistent, contextualized digital experiences in real time. Customers use RIOgaleão’s app to get up-to-the-minute flight data, exclusive offers and internet access. More than 3,000 beacons also guide passengers to exact locations throughout the airport. The solution is flexible so that the airport can continue to add features that boost relevance, such as parking reservations.

  4. Enhance loyalty

    Earning loyalty is no longer about awarding points for flight miles traveled. Airlines are being more creative in evolving loyalty programs to meet customers’ high expectations. Think about new perks you might offer, such as faster check-in for traveling families or fine dining discounts for business travelers. Then think about airlines taking that to the next level by pushing out hyper-relevant offers with the right type of offer to the right person at the right time.

    The airline will likely need to join forces with ecosystem partners to fill in the gaps when it comes to products or services. You can also allow travelers to earn loyalty benefits and redeem them across these partners. Customers will have more choices and thus a positive perception about working with your brand. All of this will work vastly more intelligently, agile and effective when power by AI.

    It’s an exciting time for airlines to use technology to ramp up customer experiences like never before. These steps can improve the bottom line and solidify a customer base that will yield value for years to come.


John Luth

Former Managing Director

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