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id="left-area"> <article id="post-27387" class="et_pb_post post-27387 post type-post status-publish format-standard has-post-thumbnail hentry category-airlines category-blog category-payments tag-aviationfest"> <a class="entry-featured-image-url" href="https://worldaviationfestival.com/blog/airlines/what-does-airlines-new-payment-capability-npc-look-like/"> <img data-src="https://worldaviationfestival.com/wp-content/uploads/2024/10/payment-1080x650.png" alt="What does airlines’ New Payment Capability (NPC) look like?" width="1080" height="675" data-srcset="https://worldaviationfestival.com/wp-content/uploads/2024/10/payment-1080x650.png 1080w, https://worldaviationfestival.com/wp-content/uploads/2024/10/payment-980x531.png 980w, https://worldaviationfestival.com/wp-content/uploads/2024/10/payment-480x260.png 480w" data-sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" src="data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==" class="lazyload" style="--smush-placeholder-width: 1080px; --smush-placeholder-aspect-ratio: 1080/675;" /><noscript><img src="https://worldaviationfestival.com/wp-content/uploads/2024/10/payment-1080x650.png" alt="What does airlines’ New Payment Capability (NPC) look like?" class="" width="1080" height="675" srcset="https://worldaviationfestival.com/wp-content/uploads/2024/10/payment-1080x650.png 1080w, https://worldaviationfestival.com/wp-content/uploads/2024/10/payment-980x531.png 980w, https://worldaviationfestival.com/wp-content/uploads/2024/10/payment-480x260.png 480w" sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" /></noscript> </a> <h2 class="entry-title"><a href="https://worldaviationfestival.com/blog/airlines/what-does-airlines-new-payment-capability-npc-look-like/">What does airlines’ New Payment Capability (NPC) look like?</a></h2> <p class="post-meta"> by <span class="author vcard"><a href="https://worldaviationfestival.com/author/ericthreedot/" title="Posts by Eric Leopold (Threedot)" rel="author">Eric Leopold (Threedot)</a></span> | <span class="published">Oct 15, 2024</span> | <a href="https://worldaviationfestival.com/category/blog/airlines/" rel="category tag">Airlines</a>, <a href="https://worldaviationfestival.com/category/blog/" rel="category tag">News</a>, <a href="https://worldaviationfestival.com/category/blog/payments/" rel="category tag">Payments</a></p><p><em>By Eric Léopold, Founder, <a href="http://www.threedot.io/">Threedot</a> </em></p> <p>In 2011 I wrote a business case for a new project called New Distribution Capability (<a href="https://www.iata.org/en/programs/airline-distribution/retailing/ndc/">NDC</a>). Around the same time, as distribution and payment are closely related, I was working on another one for a New Payment Capability (NPC). The approach was similar: improve the customer experience by leveraging modern technology. However, other dimensions of these initiatives, from the roles of incumbents to their business models, varied a lot between the two domains. IATA ended up launching multiple payment projects, such as IATA <a href="https://www.iata.org/en/services/finance/easypay/">EasyPay</a>. What would an airline’s New Payment Capability look like today?</p> <p> </p> <h2>Customer experience</h2> <p>One of the most customer-friendly payment experiences today is probably <a href="https://global.alipay.com/platform/site/ihome">Alipay</a>, at least from my recent experience in China. It works online (mobile) and offline (QR). The service apps (mobility, etc.) are integrated in the Alipay app. It includes peer-to-peer payment, i.e. the app can receive payments (unlike a credit card). The integration with apps is native, there is no add-on security feature that disturb conversion, like “3DSecure” for credit cards, unless a foreigner feeds the app with a credit card.</p> <p>While modern payment methods provide instant money transfer, bank transfers may still take days. The parallel with paper mail vs e-mail makes one wonder how long multi-days bank transfers will resist to instant transfers.</p> <p>In summary, customers get the instantaneous (1-click) experience without compromising security.</p> <p> </p> <h2>Payment methods</h2> <p>Different regions have embraced specific mainstream payment methods. In Europe and North America credit and debit cards are dominant, but not in China where QR codes are widely used. In India <a href="https://www.npci.org.in/what-we-do/upi/product-overview">UPI</a> is a standard for bank-to-bank transfer, whereas mobile payment is most popular in Kenya. In parallel to all forms of digital payment, traditional cash is still used and it’s fascinating to witness how some taxi drivers still prefer cash for “financial” reasons.</p> <p>Global travelers need a payment capability that is accepted globally based on local preferences.</p> <p> </p> <h2>Currencies</h2> <p>An ideal payment solution, or capability, should facilitate the usage of a range of fiat currencies (USD, EUR, GBP, CHF…) as well as points from loyalty programs and crypto currencies, depending on the needs and preferences of customers. At the same time, prices need to be displayed in each currency or type of currency.</p> <p> </p> <h2>Installments and credit</h2> <p>The popularity of Buy-Now-Pay-Later (BNPL) solutions enabling payment by installments has grown in the airline market as flights represent a relatively high expense.</p> <p>While instant payment provides speed, slower bank methods can provide credit facility. BNPL solutions show how credit scoring can be automated and seamlessly integrated into payment processes.</p> <p> </p> <h2>Security, fraud and chargeback</h2> <p>Mobile wallets enhance payment convenience by adding a storage layer where customers can manage multiple payment methods and handle security through biometric checks and tokenization.</p> <p>At the same time credit card transactions may generate issues. The cost of card fraud to airlines may exceed $1Bn per year. In 2019 in IATA settlement systems, agent debit memos for card chargebacks represented 20% in value. In the chargeback scenario, the customer disputes a card transaction, either incorrect or unauthorized or the service was not delivered.</p> <p>The ideal payment capability would necessarily reduce fraud and related payment issues.</p> <p> </p> <h2>Business model</h2> <p>Payment methods that offer rewards, often funded indirectly by merchants, may face limited acceptance by merchants due to their higher transaction fee, or be accepted with a merchant surcharge where regulation allows it.</p> <p>Payment is regulated in some markets, e.g. Europe has voted the <a href="https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32015L2366">Payment Service Directive</a>, which may limit the amount of transaction fees or the ability to add surcharges.</p> <p>Regardless of the business models and hidden costs, customers expect transparency in payments.</p> <p> </p> <h2>Conclusion</h2> <p>Travel services represent a large share (maybe 20-30%) of the global E-commerce sales and digital payments.</p> <p>There is potential to significantly improve the payment experience in the travel industry by leveraging modern technology. The NPC would define how customers can safely store payment methods in digital wallets and connect them seamlessly to travel merchants, so that every payment transaction is safe and frictionless.</p> <p> </p> <p>For more from Eric Léopold also see:</p> <ul> <li class="entry-title"><a href="https://worldaviationfestival.com/blog/airlines/the-dual-mode-of-airline-innovation-in-technology/">The dual mode of airline innovation in technology</a></li> <li class="entry-title"><a href="https://worldaviationfestival.com/blog/airlines/26-challenges-and-opportunities-on-aviations-road-to-2050/">26 challenges and opportunities on aviation’s road to 2050</a></li> <li class="entry-title"><a href="https://worldaviationfestival.com/blog/airlines/five-opportunities-to-improve-travelers-experience-post-covid/">Five opportunities to improve travelers’ experience post-COVID</a></li> </ul> <p> </p> </article> <article id="post-26934" class="et_pb_post post-26934 post type-post status-publish format-standard has-post-thumbnail hentry category-airlines category-digital-transformation category-blog category-travel-technology tag-aviationfest"> <a class="entry-featured-image-url" href="https://worldaviationfestival.com/blog/airlines/the-dual-mode-of-airline-innovation-in-technology/"> <img data-src="https://worldaviationfestival.com/wp-content/uploads/2024/08/innovation-1-1080x650.png" alt="The dual mode of airline innovation in technology" width="1080" height="675" data-srcset="https://worldaviationfestival.com/wp-content/uploads/2024/08/innovation-1-1080x650.png 1080w, https://worldaviationfestival.com/wp-content/uploads/2024/08/innovation-1-980x531.png 980w, https://worldaviationfestival.com/wp-content/uploads/2024/08/innovation-1-480x260.png 480w" data-sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" src="data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==" class="lazyload" style="--smush-placeholder-width: 1080px; --smush-placeholder-aspect-ratio: 1080/675;" /><noscript><img src="https://worldaviationfestival.com/wp-content/uploads/2024/08/innovation-1-1080x650.png" alt="The dual mode of airline innovation in technology" class="" width="1080" height="675" srcset="https://worldaviationfestival.com/wp-content/uploads/2024/08/innovation-1-1080x650.png 1080w, https://worldaviationfestival.com/wp-content/uploads/2024/08/innovation-1-980x531.png 980w, https://worldaviationfestival.com/wp-content/uploads/2024/08/innovation-1-480x260.png 480w" sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" /></noscript> </a> <h2 class="entry-title"><a href="https://worldaviationfestival.com/blog/airlines/the-dual-mode-of-airline-innovation-in-technology/">The dual mode of airline innovation in technology</a></h2> <p class="post-meta"> by <span class="author vcard"><a href="https://worldaviationfestival.com/author/ericthreedot/" title="Posts by Eric Leopold (Threedot)" rel="author">Eric Leopold (Threedot)</a></span> | <span class="published">Aug 27, 2024</span> | <a href="https://worldaviationfestival.com/category/blog/airlines/" rel="category tag">Airlines</a>, <a href="https://worldaviationfestival.com/category/blog/digital-transformation/" rel="category tag">Digital Transformation</a>, <a href="https://worldaviationfestival.com/category/blog/" rel="category tag">News</a>, <a href="https://worldaviationfestival.com/category/blog/travel-technology/" rel="category tag">Travel Tech</a></p><p><em>By Eric Léopold, Founder, <a href="http://www.threedot.io/">Threedot</a> </em></p> <p>The speed of innovation in technology means that airlines leaders must keep an eye on new and evolving technologies across multiple horizons, while filtering the level of hype that comes with these emerging technologies. Can they map the key technologies that can impact their airline business by level of maturity, while taking out the hype factors? Can they seamlessly operate in a dual mode, where they experiment quickly with new or future technology while rolling out in phases the mature or at scale technology?</p> <p>For this article I’ve picked four stages of technology evolution in terms of maturity horizon and hype, and illustrated each stage with digital technologies relevant to air travel. We could have done a similar exercise using aircraft technology, talking about drones, electric engines and batteries, EVTOL, etc.</p> <p> </p> <h2>1.Future technology</h2> <p>“Future technology” includes technology at a research and development stage, for example quantum computing, which is a branch of computing that leverages quantum mechanics.</p> <p><strong>Quantum computing</strong>: the hype is coming for this technology to watch out. The promise of quantum computing is a new generation of algorithms that can solve major challenges, like breaking encryption algorithms used to secure data today. The hype around quantum computing will explode as soon as a breakthrough is achieved and can be reproduced widely. Any application requiring intensive computing may be impacted, from network optimization and weather forecasting to cryptography and data security.</p> <p> </p> <h2>2.New technology</h2> <p>“New technology” includes technology that has recently become available at production stage, for example Generative Artificial Intelligence, which is a branch of AI that is able to generate new data such as texts and images.</p> <p><strong>Generative Artificial Intelligence</strong>: The hype around AI is at its peak, once again. Over the past decades, AI has enabled many innovations, from computer vision to autonomous vehicles. Since 2022, Generative AI is the latest breakthrough in this field. GenAI has delivered the ability for computers to “understand” and generate text with a quality that equals, and sometimes surpasses, human-generated content. Following the hype of the past few months, companies are compiling business case and exploring use cases to unlock the full potential of GenAI.</p> <p> </p> <h2>3.Maturing technology</h2> <p>“Maturing technology” includes technology that has become available for production and implemented multiple use cases, for example blockchain or metaverse.</p> <p><strong>Blockchain</strong>: the crypto and NFT hype are over. Innovators in the travel blockchain space like Winding Tree have shut down, but several tech startups in digital identity or payment and settlement are using the technology. The current state of “disillusionment” may last until the technology is more broadly embedded into mainstream applications and can demonstrate long-term benefits.</p> <p> </p> <h2>4.Technology at scale</h2> <p>“Technology at scale” includes technology that has reached global scale implementation in production with proven benefits in multiple use cases, such as cybersecurity, cloud and API, biometric, or 5G and connectivity.</p> <p><strong>Cybersecurity</strong>: On 19 July 2024 a significant “glitch”, referred to as “global IT outage” or “Windows bug” or “CrowdStrike incident”, severely impacted many industries, including airlines. This event was a reminder about the need and lack of tech-related business resilience in general, particularly as it was caused by an error rather than a malicious intent. Those systems shutting down everywhere also highlighted the potential risk of cyber threats from malicious actors with harmful intent. This global IT outage is still an exception as cybersecurity technology works reliably at global scale, while 30 years ago some “experts” predicted that internet would never support any secure transactions.</p> <p><strong>Cloud and API</strong>: The hype and concerns about cloud computing are now resolved. Cloud computing has been achieved mainstream adoption at scale, despite initial resistance to hosting data and applications remotely. Cloud-based applications connected by APIs are replacing legacy systems and business models. The speed of the transition to cloud and APIs still depends on multiple factors: benefits, complexity and commercials.</p> <p><strong>Biometric</strong>: The biometric technology, used to identify and verify an individual’s identity, has moved well beyond the hype curve as border control authorities have implemented facial and fingerprint recognition at scale, while the boarding process is on the way. Initial concerns about false negative, or data breach and privacy, have broadly been addressed during earlier stages.</p> <p><strong>5G and connectivity</strong>: 5G, the fifth generation of mobile network technology, provides a bandwidth that allows airlines staff can connect to their host system anytime anywhere, at the airport or else. Air-to-ground and satellite technologies, providing coverage over the ground and oceans, enable inflight connectivity to become widely available.</p> <p> </p> <h2>5.Tech trends to watch</h2> <p>Besides technologies, which emerge and reach scale over time, there are some trends to watch that apply to technology. For example, open-source is a development model that applies to technologies and promotes principles like accessibility and peer review for benefits like collaboration, safety and innovation, as an alternative to closed proprietary systems.</p> <p><strong>Open-source</strong>: In the context of GenAI, OpenAI’s GPT models and Anthropic’s Claude model are not open-source (despite OpenAI original company’s intent), however very popular Large Language Models, such as Meta’s Llama 3, are open source. While intuitively software developers tend to keep software proprietary for commercial reasons (control, security, monetization), some categories may benefit from an open-source model, such as Unix for servers and now Llama for AI. See “<a href="https://about.fb.com/news/2024/07/open-source-ai-is-the-path-forward/">Open Source AI is the Path Forward</a>” by Meta’s CEO.</p> <p> </p> <h2>Conclusion</h2> <p>This technology overview highlights the importance for airlines to adapt their approach – attitude or innovation mode – towards the technologies they wish to adopt. For early-stage technologies, their focus should be on agility and proving viable use cases. In contrast, later-stage technologies require prioritizing implementation with speed and scale. Insights and lessons from mature technologies include that major initial concerns with new technologies proved to be unfounded, e.g. a technology might not scale. While airlines may be perceived as slow to experiment with new technologies and to roll-out established ones, they could greatly benefit from adopting a dual mode for innovation in technology.</p> <p> </p> </article> <article id="post-26389" class="et_pb_post post-26389 post type-post status-publish format-standard has-post-thumbnail hentry category-airlines category-airports tag-airlines tag-airports tag-sustainability"> <a class="entry-featured-image-url" href="https://worldaviationfestival.com/blog/airlines/five-opportunities-to-improve-travelers-experience-post-covid/"> <img data-src="https://worldaviationfestival.com/wp-content/uploads/2024/06/Eric-6-1080x650.png" alt="Five opportunities to improve travelers’ experience post-COVID" width="1080" height="675" data-srcset="https://worldaviationfestival.com/wp-content/uploads/2024/06/Eric-6-1080x650.png 1080w, https://worldaviationfestival.com/wp-content/uploads/2024/06/Eric-6-980x531.png 980w, https://worldaviationfestival.com/wp-content/uploads/2024/06/Eric-6-480x260.png 480w" data-sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" src="data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==" class="lazyload" style="--smush-placeholder-width: 1080px; --smush-placeholder-aspect-ratio: 1080/675;" /><noscript><img src="https://worldaviationfestival.com/wp-content/uploads/2024/06/Eric-6-1080x650.png" alt="Five opportunities to improve travelers’ experience post-COVID" class="" width="1080" height="675" srcset="https://worldaviationfestival.com/wp-content/uploads/2024/06/Eric-6-1080x650.png 1080w, https://worldaviationfestival.com/wp-content/uploads/2024/06/Eric-6-980x531.png 980w, https://worldaviationfestival.com/wp-content/uploads/2024/06/Eric-6-480x260.png 480w" sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" /></noscript> </a> <h2 class="entry-title"><a href="https://worldaviationfestival.com/blog/airlines/five-opportunities-to-improve-travelers-experience-post-covid/">Five opportunities to improve travelers’ experience post-COVID</a></h2> <p class="post-meta"> by <span class="author vcard"><a href="https://worldaviationfestival.com/author/ericthreedot/" title="Posts by Eric Leopold (Threedot)" rel="author">Eric Leopold (Threedot)</a></span> | <span class="published">Jul 2, 2024</span> | <a href="https://worldaviationfestival.com/category/blog/airlines/" rel="category tag">Airlines</a>, <a href="https://worldaviationfestival.com/category/blog/airports/" rel="category tag">Airports</a></p><p><em>By Eric Léopold, Founder, <a href="http://www.threedot.io/">Threedot</a> </em></p> <p>With passenger traffic recovering to pre-COVID levels, the challenges of the air travel experience are reemerging, raising questions about the nature of travel demand: has anything changed during the pandemic? In this article, I suggest five opportunities to enhance the traveler’s experience.</p> <p>The <strong>expectation</strong> remains unchanged: customers expect a seamless travel experience. This expectation stems from their experiences with seamless services managed by a single operator in a closed environment. The younger generation, in particular, has even greater expectations for real-time information and instant responses.</p> <p>The <strong>challenge</strong> is growing: customers often overlook that air transport requires the coordination of dozens of players, which take time to modernize their processes and technology. Some players, such as air traffic control or security screening, have no primary interest in a smooth experience.</p> <p>The <strong>solutions</strong> require evolution at all levels: vision, mindset, people, processes, and technology. Supporting a seamless travel experience depends on the partial interconnection and alignment of numerous service providers.</p> <p> </p> <h1>Vision</h1> <p>The vision of the world’s largest low-cost carrier (LCC), Ryanair, is reportedly to maximize control, with direct sales, point-to-point flights to secondary airports for “resourceful” customers. In contrast, many legacy airlines aim to maximize reach, with indirect sales and hub-and-spoke networks using multiple aircraft types. A third vision involves creating a layer above or below all players, connecting and aligning them through either a centralized commercial player or a decentralized community approach. Customers need to navigate between players that have different visions of what the air travel experience should be.</p> <p> </p> <h1>Mindset</h1> <p>The mindset of interoperating partners ranges from “hospitality companies”, like Riyadh Air, which are genuinely customer-obsessed, to government-owned operators, such as air traffic controllers or security authorities, whose mandates prioritize safety and security above all else. Interestingly Riyadh Air is at the same time government-owned, focused on safety and security, and obsessed by customers.</p> <p> </p> <h1>People</h1> <p>People make the difference in a service industry. The best service requires that: 1) Operations are adequately staffed, which remains a challenge post-COVID as many qualified people have left the industry; 2) Staff are adequately trained on the latest processes and tools; and 3) Measures are in place to monitor service levels and recognize outstanding contributions. Attracting, developing and retaining talent remains a key challenge to provide a consistent travel experience.</p> <p> </p> <h1>Processes</h1> <p>Passenger processes need to be revisited with collaboration and data in mind. For example, a ride-sharing company knows if there is an unusual traffic jam on the way to the airport, information that would be useful for the airline. Conversely, the airline is the first to know if a flight is delayed and who is on board, which is useful for ground transportation companies at arrival. Process design should start with the customer experience in mind and be optimized based on available data from collaborative partners.</p> <p> </p> <h1>Technology</h1> <p>Technology is the enabler of simplification and automation that process design alone cannot achieve. For instance, connecting flights add massive complexity compared to direct flights, but technology can help make connections smoother. Mega airport hubs also add time and complexity in navigation, but technology can assist in finding gates or estimating wait times and walking times.</p> <p>I can foresee five opportunities coming from these trends.</p> <p> </p> <h1>Opportunities</h1> <p>1. <strong>Personalization</strong>: A student and a business traveler don’t expect the same travel experience, nor do a family with several children or an older person with reduced mobility. Personalization means adjusting the service to each persona, such as providing lounge access or wheelchairs.</p> <p>2. <strong>Retailing</strong>: Customers typically book a flight first, then a hotel, and then other services. Half book directly, while the other half use a travel agent to compare and combine services. Retailing means that all services—at the airport, in-flight, or at the destination—can be purchased in one place, combined, and adjusted as needed. Technology, including retailing platforms and APIs, makes this possible.</p> <p>3. <strong>Sustainability</strong>: Combining personalization and retailing allows the environmentally conscious traveler to select a flight on a new generation aircraft (reducing carbon emissions by X%), using blended biofuels (further reducing emissions), purchasing carbon offsets from projects deploying solar panels (indirectly reducing emissions), finding a lounge that serves vegetarian food without single-use plastics, and booking ground transport in an electric car charged with solar-generated electricity. While the air transport industry is challenging to decarbonize, there are many ways to progress over the next two decades.</p> <p>4. <strong>Servicing</strong>: Some customers see irregularities as opportunities to discover new things, like when a bird strike stopped our flight on the runway of Windhoek airport, giving us an extra night in Namibia. However, most people value predictability and smooth operations. When things go wrong, customers expect prompt recovery. Prompt recovery offers every service provider the best opportunity to create a memorable experience and lasting relationship. Generative AI and other tools can provide individualized real-time support at scale in case of changes and disruptions.</p> <p>5. <strong>Quality and Customer Satisfaction</strong>: I write these lines on a flight where I’ve just eaten the worst ham and cheese sandwich of my (51-year) life. The opportunity is to let customers order food from airport stores, which offer more choices and quality than this airline, and have it delivered on board. Giving customers choice and transparency by showing ratings on products and services will significantly improve customer satisfaction and airline ratings. Who would ever order this ham and cheese sandwich if they saw it was rated as “criminal”?</p> <p> </p> <h1>Conclusion</h1> <p>Customer centricity represents a major change for a process-oriented industry that thrived on attention to operational details. Environmental consciousness represents a massive change for an industry that thrived on combustion engines powered by fossil fuels. Collaboration between multiple service providers and stakeholders represents a necessary change in an industry that was initially national and regulated (like most railways still today). All these changes are happening now. They create uncertainty and fear but represent major opportunities and will lead to significant enhancements for the industry that connects people globally in real life.</p> <p><strong>Disclaimer</strong>: The theme, structure, and writing come from the author. ChatGPT was used to suggest revisions for clarity and engagement, some of which were included. The responsibility for the article remains fully with the author.</p> <p> </p> </article> <article id="post-25900" class="et_pb_post post-25900 post type-post status-publish format-standard has-post-thumbnail hentry category-airlines category-airports category-blog tag-aviationfest"> <a class="entry-featured-image-url" href="https://worldaviationfestival.com/blog/airlines/the-aviation-sustainability-challenge-will-grow-before-it-becomes-an-opportunity/"> <img data-src="https://worldaviationfestival.com/wp-content/uploads/2024/04/Eric-5-1080x650.png" alt="The aviation sustainability challenge will grow before it becomes an opportunity" width="1080" height="675" data-srcset="https://worldaviationfestival.com/wp-content/uploads/2024/04/Eric-5-1080x650.png 1080w, https://worldaviationfestival.com/wp-content/uploads/2024/04/Eric-5-980x531.png 980w, https://worldaviationfestival.com/wp-content/uploads/2024/04/Eric-5-480x260.png 480w" data-sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" src="data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==" class="lazyload" style="--smush-placeholder-width: 1080px; --smush-placeholder-aspect-ratio: 1080/675;" /><noscript><img src="https://worldaviationfestival.com/wp-content/uploads/2024/04/Eric-5-1080x650.png" alt="The aviation sustainability challenge will grow before it becomes an opportunity" class="" width="1080" height="675" srcset="https://worldaviationfestival.com/wp-content/uploads/2024/04/Eric-5-1080x650.png 1080w, https://worldaviationfestival.com/wp-content/uploads/2024/04/Eric-5-980x531.png 980w, https://worldaviationfestival.com/wp-content/uploads/2024/04/Eric-5-480x260.png 480w" sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" /></noscript> </a> <h2 class="entry-title"><a href="https://worldaviationfestival.com/blog/airlines/the-aviation-sustainability-challenge-will-grow-before-it-becomes-an-opportunity/">The aviation sustainability challenge will grow before it becomes an opportunity</a></h2> <p class="post-meta"> by <span class="author vcard"><a href="https://worldaviationfestival.com/author/ericthreedot/" title="Posts by Eric Leopold (Threedot)" rel="author">Eric Leopold (Threedot)</a></span> | <span class="published">Apr 17, 2024</span> | <a href="https://worldaviationfestival.com/category/blog/airlines/" rel="category tag">Airlines</a>, <a href="https://worldaviationfestival.com/category/blog/airports/" rel="category tag">Airports</a>, <a href="https://worldaviationfestival.com/category/blog/" rel="category tag">News</a></p><p><em>By Eric Léopold, Founder, <a href="http://www.threedot.io">Threedot</a> – 15 April 2024</em></p> <p><strong>Air transport’s unique sustainability challenge</strong></p> <p>While the world is on its way to reduce its dependency on fossil fuels which will cut CO2 emissions and mitigate the human impact on climate change, air transport remains an sector uniquely challenging to decarbonize. Technologically, solutions applicable to ground transport (road or rail) do not translate directly to air transport. Politically, governments hesitate to enact policies or allocate funds necessary for producing Sustainable Aviation Fuels (SAF), as the industry is still perceived as serving the elite despite five decades of commoditization and low fares. As a result, the aviation supply chain – aircraft, engines, fuel, etc. – has been working harder to tackle this sustainability challenge.</p> <p> </p> <p><strong>Why is this challenge so difficult?</strong></p> <p>Ground transport can decarbonize effectively, with electric vehicles running on batteries and with trains powered by overhead electric lines – with electricity sourced from nuclear plants. Maritime transport has the potential to decarbonize, with green ships powered by Liquefied Natural Gas (LNG) or Hydrogen fuel cells. Why can’t air transport find specific solutions? Is it due to a lack of interest or prioritization, or is there a deeper inherent difficulty?</p> <p>Most alternatives suitable for ground and sea transport are unfortunately impractical for air. Lifting and transporting batteries 10km up in the sky is energetically more costly than moving them on the ground. Other energy sources like gas and hydrogen are unsuitable for aircraft fuel tanks. The idea of installing power lines at high altitude seems far-fetched. Ultimately, traditional fuel remains the energy source with the best energy density ratio, which is essential for air transport. Each alternative raises further questions: How to produce fuel without drilling for oil? How to generate hydrogen without associated CO2 emissions? Can we synthetize fuels from biomass without affecting other supply chains?</p> <p> </p> <p><strong>The air transport industry’s sustainability playbook</strong></p> <p>Airlines and their stakeholders – including customers, shareholders, and partners – must address several critical questions:</p> <ul> <li>Can synthetic fuels be created without releasing carbon that was captured in the ground for millions of years?</li> <li>Is there an alternative fuel whose combustion does not emit CO2?</li> <li>Is zero-emission flight achievable with electric aircraft, and if so, over what range and payloads?</li> <li>Can energy consumptions be reduced through technological advancements and better operations, including newer aircraft or harmonized air traffic management that shorten routes and reduces congestions and delays?</li> <li>Is it possible to capture CO2 instead of emitting greenhouse gases?</li> <li>What role do carbon offsets play? They finance sustainability projects, but do not address the root cause of emissions, which makes, by definition, an interim solution.</li> </ul> <p> </p> <p><strong>How can airlines organize themselves to answer sustainability questions?</strong></p> <p>Each airline may address this challenge in their own way. No single organizational design suits them all. We can highlight several activities across a dozen teams involved in the sustainability journey:</p> <ol> <li>The strategy and corporate planning team focuses on the vision and big picture, high-level objectives and the long-term corporate plan to achieve sustainability targets</li> <li>The chief sustainability officer coordinates in a consistent plan, manages the environment team and leads the transition to net-zero emissions</li> <li>The finance team assesses the financial impacts of new taxes, fuels, equipment and operations, and generates sustainability reports</li> <li>The marketing team creates green fares and communicates the commitment and roadmap to 2050</li> <li>The customer experience team reduces single-use plastics</li> <li>The catering team minimizes the food waste and introduces vegetarian options</li> <li>The engineering and technology teams look at innovative solutions from new fuels to new engines</li> <li>The IT team implements infrastructure and software solutions for data collection, operations forecasting and performance reporting</li> <li>The operations team optimizes flight plans daily</li> <li>The fleet team seeks new, more fuel-efficient aircraft and engines</li> <li>The purchasing team secures sustainable fuels in significant and affordable quantities</li> <li>The HR team ensures all staff are trained on sustainability best practices and the organization maintains relevant skill sets</li> </ol> <p> </p> <p><strong>Conclusion</strong></p> <p>Most humans, except maybe visionary writers, struggle to envision a positive future driven by new technology. Inventions and breakthroughs such as the internet, mobile phones, social networks, smart bots (speaking our language and behaving like humans), reusable rockets, a solar plane crossing an ocean or a spacecraft landing on a comet, once seemed far-fetched. Today, imagining hundreds of plants producing sustainable fuel, electric aircraft crossing oceans or rockets carrying people to Mars, may seem equally unlikely. However, as airline leaders worldwide increasingly view sustainability not only as a challenge to overcome, but as an emerging opportunity, the potential for sustainable air transport will grow. This future, where the air transport industry produces an acceptable quantity of CO2, promises lasting connectivity for people and goods worldwide, crossing territories, mountains and oceans, without negative impact on global warming.</p> <p> </p> </article> <article id="post-25528" class="et_pb_post post-25528 post type-post status-publish format-standard has-post-thumbnail hentry category-airlines category-retailing tag-aviationfest"> <a class="entry-featured-image-url" href="https://worldaviationfestival.com/blog/airlines/the-state-of-airline-retailing/"> <img data-src="https://worldaviationfestival.com/wp-content/uploads/2024/03/eric-4-1080x650.png" alt="The state of airline retailing" width="1080" height="675" data-srcset="https://worldaviationfestival.com/wp-content/uploads/2024/03/eric-4-1080x650.png 1080w, https://worldaviationfestival.com/wp-content/uploads/2024/03/eric-4-980x531.png 980w, https://worldaviationfestival.com/wp-content/uploads/2024/03/eric-4-480x260.png 480w" data-sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" src="data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==" class="lazyload" style="--smush-placeholder-width: 1080px; --smush-placeholder-aspect-ratio: 1080/675;" /><noscript><img src="https://worldaviationfestival.com/wp-content/uploads/2024/03/eric-4-1080x650.png" alt="The state of airline retailing" class="" width="1080" height="675" srcset="https://worldaviationfestival.com/wp-content/uploads/2024/03/eric-4-1080x650.png 1080w, https://worldaviationfestival.com/wp-content/uploads/2024/03/eric-4-980x531.png 980w, https://worldaviationfestival.com/wp-content/uploads/2024/03/eric-4-480x260.png 480w" sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" /></noscript> </a> <h2 class="entry-title"><a href="https://worldaviationfestival.com/blog/airlines/the-state-of-airline-retailing/">The state of airline retailing</a></h2> <p class="post-meta"> by <span class="author vcard"><a href="https://worldaviationfestival.com/author/ericthreedot/" title="Posts by Eric Leopold (Threedot)" rel="author">Eric Leopold (Threedot)</a></span> | <span class="published">Mar 7, 2024</span> | <a href="https://worldaviationfestival.com/category/blog/airlines/" rel="category tag">Airlines</a>, <a href="https://worldaviationfestival.com/category/blog/retailing/" rel="category tag">Retailing</a></p><p>Observers of the air travel distribution landscape have noticed an evolution in the past ten years since, in 2014, the NDC standard was approved by the US Department of Transportation. The destination of the changes is called Airline Retailing in reference to digital retailers that provide a seamless experience and personalize offers, among other benefits to consumers. What are the drivers of this evolution? What is the current state of the journey? What does the road ahead look like?</p> <p> </p> <h3>The drivers of airline retailing</h3> <p>The immediate, primary driver is the set of IATA standards, including process flows and data models, that describe the way to shop for air travel using modern technologies.</p> <p>The root cause behind these standards is the airlines’ need to generate more revenue per seat or per passenger, to showcase the value of premium products and to better serve customers during their trip, among other benefits.</p> <p>The real driver behind airlines’ needs is the evolving expectations of customers, combining the new generation of digital natives with the public who embraced digital services during the COVID pandemic. The cost to airlines of doing nothing is the lack of relevance to their customers.</p> <p>Overall, the combination of consumer, airline and technology trends drives the evolution of air travel distribution into “retailing”. Low-cost carriers paved the way to digital retailing thanks to their simpler operating model: point-to-point flights, single cabin, no tickets, direct sales only, etc. Full-service carriers competed on their direct sales but had an additional challenge in their indirect channel, where travel agents sell air travel services using legacy third-party technology.</p> <p> </p> <h3>The state of airline retailing</h3> <p>Airlines, travel sellers, technology providers and corporate buyers are in the same boat for this transition.</p> <p>On the corporate customer side, the most sophisticated buyers look for innovations that meet their needs. For example, they value tailored offers that include benefits for their travelers, or specific information about CO2 emission per flight. Most buyers are waiting for their travel management company to upgrade their solutions and are not curious about the technology used to source content.</p> <p>On the airline side, the most advanced airlines have set their own deadline for 100% offers and orders, which happens between 2025 and 2028. The majority of airlines (by volume) has embarked into the journey, started by creating a new distribution channel based on an API. Interestingly 2024 is the year when starting a new airline does not require to implement any legacy process or system for global distribution.</p> <p>On the travel seller side, the most advanced companies have built their sourcing technology to consumer air travel APIs. Most travel sellers are waiting for their technology provider to upgrade their solutions and source rich and dynamic content.</p> <p>On the technology provider side, the three Western GDSs have implemented and are rolling out API connectivity, while new entrants, known as NDC aggregators, provide rich and dynamic content combined to innovative commercial models. The traditional corporate booking tools may be the last piece to embrace new technologies regardless of the potential benefits for corporate users, which opens the door to new solution providers.</p> <p>There are many more facets of the retailing transition that deserve attention: loyalty, payment, settlement, identity management, revenue management, airport operations, etc. There is merit in covering them in a longer version of this article.</p> <p>Overall, the air travel distribution value chain is about half-way through the journey to airline retailing, which started in 2014 and may end around 2030. Does this mean that the previous journey, known as automation of travel distribution (CRS, PSS, GDS, ET, EMD, etc.), will have lasted from 1960 to 2030? The next question is: what to expect at the end of this journey?</p> <p> </p> <h3>The road ahead</h3> <p>The simple vision is that an old protocol, EDIFACT, is replaced by a modern technology, API. Whether technology providers invent smarter proprietary APIs or default to a standard one, called NDC, is secondary. What matters is connectivity and reach.</p> <p>A broader ambition is to phase out all legacy processes and systems: PNR, tickets, EMD, booking classes (RBD), fare filing, etc. They are replaced by Offers and Orders accessible via API. Airlines will compete in providing a better customer value proposition by dynamically creating relevant offers and in consistently fulfilling orders.</p> <p>The real success, however, is that the “digital airlines” become customer-centric retailers. The guiding principle should be: design a smooth customer experience and build efficient processes behind it, rather than: build convenient processes from an airline perspective and find out how to get customers around them.</p> <p>A vivid and visual example of this approach is the Apple Store, where customers stand in the middle of the store while Apple staff gravitate around them for advice, for product demos, for payment and for delivery. This customer-centric experience contrasts with the regular experience whereby the passenger moves around and find their way to check-in, drop a bag, verify their travel document or else.</p> <p> </p> <p>Ultimately, airlines will aggregate demand and build dynamic supply, like Uber, rather than building supply (namely airport to airport capacity) and looking for demand.</p> <p> </p> <h3>Stay connected</h3> <p>The world of airline retailing is changing fast. Stay connected.</p> <p> </p> <hr /> <p><em>Disclaimer: the author of this article worked at IATA between 2005 and 2020 and launched the NDC program, now known as Modern Airline Retailing. </em></p> <p> </p> </article> <article id="post-25119" class="et_pb_post post-25119 post type-post status-publish format-standard has-post-thumbnail hentry category-airlines category-airports category-digital-transformation category-blog category-travel-technology"> <a class="entry-featured-image-url" href="https://worldaviationfestival.com/blog/airlines/26-challenges-and-opportunities-on-aviations-road-to-2050/"> <img data-src="https://worldaviationfestival.com/wp-content/uploads/2024/01/2050-1080x650.png" alt="26 challenges and opportunities on aviation’s road to 2050" width="1080" height="675" data-srcset="https://worldaviationfestival.com/wp-content/uploads/2024/01/2050-1080x650.png 1080w, https://worldaviationfestival.com/wp-content/uploads/2024/01/2050-980x531.png 980w, https://worldaviationfestival.com/wp-content/uploads/2024/01/2050-480x260.png 480w" data-sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" src="data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==" class="lazyload" style="--smush-placeholder-width: 1080px; --smush-placeholder-aspect-ratio: 1080/675;" /><noscript><img src="https://worldaviationfestival.com/wp-content/uploads/2024/01/2050-1080x650.png" alt="26 challenges and opportunities on aviation’s road to 2050" class="" width="1080" height="675" srcset="https://worldaviationfestival.com/wp-content/uploads/2024/01/2050-1080x650.png 1080w, https://worldaviationfestival.com/wp-content/uploads/2024/01/2050-980x531.png 980w, https://worldaviationfestival.com/wp-content/uploads/2024/01/2050-480x260.png 480w" sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" /></noscript> </a> <h2 class="entry-title"><a href="https://worldaviationfestival.com/blog/airlines/26-challenges-and-opportunities-on-aviations-road-to-2050/">26 challenges and opportunities on aviation’s road to 2050</a></h2> <p class="post-meta"> by <span class="author vcard"><a href="https://worldaviationfestival.com/author/ericthreedot/" title="Posts by Eric Leopold (Threedot)" rel="author">Eric Leopold (Threedot)</a></span> | <span class="published">Jan 17, 2024</span> | <a href="https://worldaviationfestival.com/category/blog/airlines/" rel="category tag">Airlines</a>, <a href="https://worldaviationfestival.com/category/blog/airports/" rel="category tag">Airports</a>, <a href="https://worldaviationfestival.com/category/blog/digital-transformation/" rel="category tag">Digital Transformation</a>, <a href="https://worldaviationfestival.com/category/blog/" rel="category tag">News</a>, <a href="https://worldaviationfestival.com/category/blog/travel-technology/" rel="category tag">Travel Tech</a></p><p>As we (Terrapinn and <a href="https://threedot.io/our-story/">Threedot</a>) resume our editorial collaboration for a third year, towards World Aviation Festival 2024, I thought I’d take a step back and look at challenges and opportunities facing Aviation until 2050, across eight areas. I’ve listed 26 topics below, like the number of years to go until 2050.</p> <p> </p> <h3>Sustainability</h3> <p>In 2024 the main challenge facing air transport, but also the biggest opportunity, may be sustainability. The sustainability of an industry is the balance between the benefits and costs to the society. In the case of air transport, the benefits in terms of jobs and economic development may represent about 2-3% of the world’s GDP (about $2.5 trillion compared to $100 trillion<a href="#_ftn1" name="_ftnref1">[1]</a>), whereas the costs to society include about 2% of human-induced greenhouse gas emissions (about 1bn tonnes compared to 50b tonnes<a href="#_ftn2" name="_ftnref2">[2]</a>), as well as noise and other impacts on the environment. The challenge is to keep the 100 million jobs and other benefits while reducing or eliminating the CO2 emissions and other impacts.</p> <p> </p> <ol> <li><strong>Sustainable Aviation Fuel (SAF)</strong></li> </ol> <p>The opportunities lie in the development of an entire new ecosystem around the production and distribution of new “sustainable” fuels, as well as aircraft and engines that don’t require fuel combustion. As airlines collectively spend hundreds of billions every year on fuel, aircraft and engines, there is major market for new solutions. States, transport operators and technology providers are working and funding these solutions. The trend of the energy transition from fossil fuels to renewable energy is a global trend that encompasses not only transports.</p> <p> </p> <ol start="2"> <li><strong>Hydrogen</strong></li> </ol> <p>In theory, hydrogen is attractive. Whereas Carbon combined to Oxygen creates CO2, Hydrogen combined to Oxygen creates H2O, water. With a high energy density by weight and generation from renewable (non-fossil) energies, hydrogen seems a viable alternative fuel. However, this fuel requires a new infrastructure from transportation to storage, and new aircraft designs, with related safety concerns. While promising, it comes with more challenges than the SAF approach.</p> <p> </p> <h3>Safety</h3> <p>Aviation became the safest mode of transport over the past 80 years, since States decided to create an international aviation system with safety as number one priority. Yet many challenges keep arising, as the recent pandemic and incidents reminded us.</p> <p> </p> <ol start="3"> <li><strong>Health and COVID-19</strong></li> </ol> <p>Aviation carries people and people carry viruses; hence aviation indirectly carries viruses around the world. After the SARS and MERS alerts, the SARS-CoV-2 corona-virus and its variants took over the world, spreading the Corona-Virus Disease identified in 2019 (COVID-19). The reaction of most States was to close borders to international traffic in an attempt to mitigate the propagation. As COVID tests and vaccines were developed, borders re-opened under conditions which could have been more predictable and coordinated. WHO reports close to 7m deaths for 770m cases<a href="#_ftn3" name="_ftnref3">[3]</a>. As we enter 2024, the COVID pandemic is behind us but the pandemic risk from another virus still applies to aviation.</p> <p> </p> <ol start="4"> <li><strong>Safety Culture and 737 Max</strong></li> </ol> <p>For 80 years aviation has built a strong safety record, but not one we can take it for granted. The grounding of the Boeing 737 MAX in 2019-2020 after two similar crashes was a reminder that a commitment to safety and transparency is critical to the sustainability of aviation. The financial pressure on manufacturers will keep increasing, and many new manufacturers are entering the market, which increases the challenge for them to think “safety first” when confronted with other priorities.</p> <p> </p> <ol start="5"> <li><strong>Aircraft tracking and MH370</strong></li> </ol> <p>Aircraft tracking is an ambivalent topic. While aviation is highly regulated and standardized, private companies managed to create a global network for real-time aircraft tracking, such as Flightradar24<a href="#_ftn4" name="_ftnref4">[4]</a> or FlightAware<a href="#_ftn5" name="_ftnref5">[5]</a>. These services enable travelers and their families to know the status of flights. It came as a surprise to many when the flight 370 of Malaysia Airlines (MH) was lost and not tracked. Indeed, there is global tracking system once the aircraft transponder is switched off. Almost ten years after losing MH370, there is no certainty on the reason of the disappearance of the aircraft from the radars of air traffic controllers.</p> <p> </p> <ol start="6"> <li><strong>Space transport, drones and vertiports</strong></li> </ol> <p>Different kinds of aircraft have begun navigating the air space and sharing it with commercial airlines, creating a need for harmonized traffic management. Virgin Galactic wants to develop space tourism and their shuttles will need to cross the airspace at high speed. Many companies are building remotely piloted aircraft, commonly called drones, or even autonomous aircraft, which can fly themselves to destination. The Vertical-Takeoff-and-Landing (VTOL) technology will allow flying cars and taxis, at a large scale than helicopters, requiring vertiports (no-runway airports for VTOL aircraft) and urban airways<a href="#_ftn6" name="_ftnref6">[6]</a>.</p> <p> </p> <ol start="7"> <li><strong>Dangerous goods, Lithium batteries</strong></li> </ol> <p>The goods transported in the hold of the aircraft may create a threat as well. For example, regulations require that lithium batteries be removed from checked bags. Either a short circuit or an internal defect may cause the battery to heat up, catch fire or explode due to pressure, which is a major issue inside an aircraft in the air. While regulations exist and communications and trainings are widespread, the residual risks come from counterfeit products.</p> <p>These safety challenges remind us of the constant challenges of making a mode of transport safe. Turbulences are more a nuisance to passengers’ comfort than a threat to their lives.</p> <p><strong> </strong></p> <h3>Security</h3> <p>The aviation community makes a distinction between the types of threats. While safety deals with unintentional harmful effects, security protects against intentional, and unlawful, actions. Aviation is a target of criminal acts, such as the 9/11 attacks, and more challenges are on the horizon.</p> <p> </p> <ol start="8"> <li><strong>Airport security screening for passengers</strong></li> </ol> <p>The purpose of airport security screening is to ensure that no passenger carries any weapon that could threaten the flights. Over time, threats have included liquids and gels, which increased the pain inflicted to all passengers traveling with carry-on bags. In regular traveler surveys, the security checkpoint remains the main pain point of the entire travel experience and is the privilege of air travel compared to other modes of transport. There is an opportunity to use new technologies and expedite this security process, potentially combining personal data where possible.</p> <p> </p> <ol start="9"> <li><strong>Disruptive, or “unruly” passengers</strong></li> </ol> <p>Although passengers are screened before entering the aircraft, some may still misbehave during the flight, which in general represents a nuisance to other passengers and in extreme cases may require to divert and land the aircraft if the individual is a threat to other passengers or the flight. While the awareness of the issue has increased recently, crews are well prepared, and the objective is to eliminate the disruptive behaviors. Measures such as temporary or lifetime bans, or the ability to prosecute, should be effective in most jurisdictions.</p> <p> </p> <ol start="10"> <li><strong>Cyber-security</strong></li> </ol> <p>Cyber-security is a topic broader than aviation that grew over time with the digitalization of industries and the dependence on communication networks. In the world of aviation, cyber-attacks are one of the few threats that could ground the entire aviation network, and cyber-security is one topic that may keep aviation leaders awake at night. Vulnerabilities include air traffic management and aircraft operations. While there is no evidence of a hacker remotely taking control of air traffic management or of aircraft commands, the risk has been identified.</p> <p> </p> <ol start="11"> <li><strong>Drones used as a weapons</strong></li> </ol> <p>While leisure drones are amazing tools for taking photos and videos from the sky, and professional drones become vehicles for delivering goods over the air, the latter may be wrongly used to harm people, as demonstrated recently in war zones. Aviation may become a target of harmful drones in the airport areas and need to build preventive measures in the most sensitive areas.</p> <p> </p> <h3>Efficiency</h3> <p>Global air transport can be considered as highly efficient, compared to rail transport for example. Despite being standardized and coordinated globally, many frustrating challenges remain and need to be addressed.</p> <p> </p> <ol start="12"> <li><strong>Air Navigation delays</strong></li> </ol> <p>The main cause of traveler frustration, according to a recent study<a href="#_ftn7" name="_ftnref7">[7]</a> by TNMT, is flight irregularities. A flight may be delayed for many reasons, due to the airline, to the airport, to air traffic management, or else – but from a traveler perspective, the airline is accountable. Regarding air traffic management, recent issues include post-COVID workforce shortage, IT system outages or strikes, which all increase delays, disruptions and irregularities. Regulations may help, such as a new law<a href="#_ftn8" name="_ftnref8">[8]</a> in France requiring air traffic controllers to give a 2-day notice which may help canceling fewer flights.</p> <p> </p> <ol start="13"> <li><strong>Closure of airspace</strong></li> </ol> <p>Conflicts and wars have an impact on airspace. For example, the Russian airspace is closed to many airlines since the invasion of Ukraine in 2022 and Russian airlines are banned from many airspaces. The airspace closure has lengthened the path from Europe to Asia forcing aircraft routes<a href="#_ftn9" name="_ftnref9">[9]</a> to the North or South of Russia, increasing the time and cost of these flights. Further political instability may impact the availability of routes in the skies.</p> <p> </p> <ol start="14"> <li><strong>Legacy technologies</strong></li> </ol> <p>The global air navigation infrastructure was built before the invention of modern communication networks. Pilots and air traffic controllers were trained to communicate by voice, to speak in English and to use coded words to avoid misunderstandings, e.g. Fox Charlie for FC. However nowadays, machines talk to each other by exchanging data, and even people know how to send precise GPS location by text message. The role of voice in air traffic management will become a challenge for autonomous flights where no human is present for a conversation with an air traffic controller. The vision<a href="#_ftn10" name="_ftnref10">[10]</a> of the US Federal Aviation Administration is a communication by API, not voice.</p> <p> </p> <h3>Travel Experience</h3> <p>The passenger traffic has just recovered to 2019 levels<a href="#_ftn11" name="_ftnref11">[11]</a>, which means in 2024 we can stop referring to 2019 and simply refer to the previous year. With the recovery challenge just behind us, the next challenge is the doubling of traffic in the next 15-20 years, using a similar infrastructure to today, without impacting the travel experience.</p> <p> </p> <ol start="15"> <li><strong>Retailing, or the promise of a personalized service and experience</strong></li> </ol> <p>The legacy technology challenge in airline distribution is being addressed. While airlines, travel agencies and technology providers had invented e-commerce in the 1960s before the internet was created, this infrastructure struggled to evolve beyond its original purpose of selling seats in a regulated industry. A new era of software, based on airline offers and orders<a href="#_ftn12" name="_ftnref12">[12]</a>, leveraging artificial intelligence, will enable travelers to customize their travel experience.</p> <p> </p> <ol start="16"> <li><strong>Facilitation, or the promise of a seamless experience at a high level of security</strong></li> </ol> <p>Each crisis usually brings another layer of control which may never go away. The COVID crisis added health documentation controls (vaccines or tests), in addition to immigration and customs controls at borders, as well as security checks and of course boarding gate procedures. The search for the single integrated token, that supports a seamless passenger experience across the airport, at departure and arrival, is still on. Complementary initiatives like ICAO’s Traveller Identification Programme (TRIP)<a href="#_ftn13" name="_ftnref13">[13]</a> and IATA’s OneID<a href="#_ftn14" name="_ftnref14">[14]</a>, respectively focused on government-issued and airline-issued credentials, are two enablers of this dream journey.</p> <p> </p> <ol start="17"> <li><strong>Connectivity, or the Timbuktu to Kota Kinabalu challenge</strong></li> </ol> <p>Air transport provides connectivity. Going from Mali to Malaysia may take 4000 hours (or 166 days) over 19000km by foot (across Libya, Syria, Iraq, Nepal, Myanmar, etc.) according to Google Map, or two days by air, while rail may not be an option due to borders and terrain. In many parts of the world where infrastructure is developing, air transport remains the preferred option, as rail may cost $1-10m per km of new line, depending on the geography, type of rail or labor cost, and take years or decades to connect two cities.</p> <p> </p> <h3>Technology & Innovation</h3> <p>Aviation is both a very innovative sector and slow to adopt innovation. The airframes, engines and other aircraft-related technologies have made significant progress over 80 years, and at the same time they seem to underestimate the sustainability challenge. On the commercial side, airlines have invented e-commerce when providing fares and inventory to travel agencies, and at the same time they cannot match today’s customer expectations for digital experience. Innovation and adoption of new technologies will have a major impact on aviation’s sustainability, efficiency, security and beyond.</p> <p> </p> <ol start="18"> <li><strong>AI impacts autonomous flights and efficient air transport management</strong></li> </ol> <p>Aviation has decades of experience in flying aircraft in all visibility and weather conditions, using autopilots, Instrument Flight Rules (IFR) and global Air Traffic Control to guide aircraft stably and reliably. While AI may already help optimize individual flight paths, for performance or sustainability, and air traffic in general, for example by supporting controllers’ decisions, it will be critical to manage the growing number of new aircraft types, from remotely piloted aircraft to autonomous aircraft.</p> <p> </p> <ol start="19"> <li><strong>Data about turbulences or any source of risks to increase safety, security and efficiency</strong></li> </ol> <p>Technology and regulation already enable the live tracking of aircraft, using the aircraft ADS-B transponders, the messages over frequencies and the ground stations. The data generated by the aircraft helps inform travelers but may also support the decision making of many operators. Aircraft sensors and weather radar enable the modeling of the atmosphere and possible turbulences, which can inform the pilots and air traffic controllers, and eventually make flights more comfortable for travelers.</p> <p> </p> <ol start="20"> <li><strong>Digital, from digital ID to mobile experience</strong></li> </ol> <p>All the documentation has been digitalized in the last two decades with the introduction of smart phones, including the tickets, the boarding passes and the methods of payments. The passport is the last physical travel document. The current e-passport holds a chip that stores biometric information, authenticated by a public key infrastructure (PKI)<a href="#_ftn15" name="_ftnref15">[15]</a>. The next step is to store the personal data on a phone and to allow the identification securely, which will transform the phone into the single travel token.</p> <p> </p> <p> </p> <h3>Workforce</h3> <p>Aviation’s challenge is to have a workforce that grows fast enough to support the doubling of air traffic within the next 15 years (assuming 5% annual traffic growth) or 18 years (4%). The opportunity is to train new professional, attract people who would not have considered aviation, but also gain efficiency by accommodating more traffic within the same infrastructure.</p> <p> </p> <ol start="21"> <li><strong>Shortage of skilled staff, pilots and technicians</strong></li> </ol> <p>Some staff may not have returned to the aviation sector after the pandemic, some staff may not be fully trained after their absence during the pandemic. In some regions where aviation is pointed as the main cause of climate change, young professionals may hesitate to join the sector and learn the required skills. In other regions some sectors may be more attractive to young, educated professionals looking for an exciting career path. At the same time, aviation is facing its biggest challenge and will go through its biggest transformation during the next generation.</p> <p> </p> <ol start="22"> <li><strong>Gender diversity</strong></li> </ol> <p>Aviation has historically lacked gender diversity, with men being more represented both in operational and management roles, and Amelia Earhart remaining one exception. This status has changed recently, for example with the appointment of female CEOs to lead airlines. Role models will attract more women to aviation, which will help address the workforce and talent shortage.</p> <p> </p> <h3>Regulation / Liberalization</h3> <p>Air transport is still the only global industry that is not globalized, i.e. there is no global airline. The entities that are the closest to being a global airline are alliances, limited to some commercial synergies, or joint-ventures, also commercial, or airline groups in some regions, e.g. Latin America or Europe or Southeast Asia.</p> <p> </p> <ol start="23"> <li><strong>Liberalization of ownership and control</strong></li> </ol> <p>Unlike other businesses, airlines must be owned, in many jurisdictions, by nationals, or foreigners may own up to 25% of an airline, for example. States may sign Air Service Agreements that limit the number of flights between two States and enforce the ownership rules. Since the deregulation of aviation, there is a trend to further liberalize the sector, for example with the EU-US Open Skies agreement for traffic rights or the EU Single European Sky for air traffic management. The African Union voted in 1999 a promising Single African Air Transport Market (SAATM)<a href="#_ftn16" name="_ftnref16">[16]</a> to enhance connectivity across the continent.</p> <p> </p> <ol start="24"> <li><strong>Laws restricting flights in France and Netherlands</strong></li> </ol> <p>As part of climate change actions, France passed a law<a href="#_ftn17" name="_ftnref17">[17]</a> that became effective in 2023 to ban or restrict domestic flights where train is a viable alternative. In a similar spirit, the Dutch government had plans to cap the number of flights at Amsterdam’s airport, Schiphol, but this plan may face some challenges and pressures, reflecting the balance of environment and economic interests. This type of restrictions may grow unless aviation implements the sustainable transformation at a credible pace.</p> <p> </p> <ol start="25"> <li><strong>Taxation and environment</strong></li> </ol> <p>Air transport is subject to heavy regulation and taxes. The energy transition of air transport will be influenced by new regulations and taxes. States may introduce taxes on carbon emissions, using CORSIA<a href="#_ftn18" name="_ftnref18">[18]</a>, the international framework of ICAO, and incentivize the production of sustainable fuels. Although the aim is to produce enough SAF at a competitive price to support a timely transition, the unpredictable impact of the regulations and taxes represents a major challenge for all stakeholders.</p> <p> </p> <ol start="26"> <li><strong>Harmonization or lack of, from security to health</strong></li> </ol> <p>Last but not least, aviation is globally interconnected and interoperable sector, like telecom or banking, but still lacks harmonization in areas such as health and security. Harmonization represents a major effort which will deliver benefits for most of the proposals in this article. Harmonization makes the travel experience more seamless, it reduces safety risks, it accelerates implementation, it facilitates working abroad or investing in businesses, and more. After years of continuous growth, despite conflicts, crisis and pandemics, aviation has the opportunity to bring inter-operability to the next level.</p> <p> </p> <hr /> <p>Article by<a href="https://threedot.io/"> Eric Leopold</a></p> <p> </p> <p><a href="#_ftnref1" name="_ftn1">[1] </a>Benefits of Air Transport <a href="https://aviationbenefits.org/economic-growth/">https://aviationbenefits.org/economic-growth/</a> and World GDP <a href="https://www.worldometers.info/gdp/gdp-by-country/">https://www.worldometers.info/gdp/gdp-by-country/</a></p> <p><a href="#_ftnref2" name="_ftn2">[2] </a>Global greenhouse gas emissions <a href="https://ourworldindata.org/ghg-emissions-by-sector">https://ourworldindata.org/ghg-emissions-by-sector</a></p> <p>Global CO2 emissions in 2022 <a href="https://www.nature.com/articles/s43017-023-00406-z">https://www.nature.com/articles/s43017-023-00406-z</a></p> <p>Energy-related CO2 emissions in 2022 <a href="https://www.iea.org/reports/co2-emissions-in-2022">https://www.iea.org/reports/co2-emissions-in-2022</a></p> <p><a href="#_ftnref3" name="_ftn3">[3]</a> WHO on COVID-19: <a href="https://www.who.int/emergencies/diseases/novel-coronavirus-2019">https://www.who.int/emergencies/diseases/novel-coronavirus-2019</a></p> <p><a href="#_ftnref4" name="_ftn4">[4]</a> Flightradar24: <a href="https://www.flightradar24.com">https://www.flightradar24.com</a></p> <p><a href="#_ftnref5" name="_ftn5">[5]</a> FlightAware: <a href="https://www.flightaware.com/">https://www.flightaware.com/</a></p> <p><a href="#_ftnref6" name="_ftn6">[6]</a> ICAO on Advanced Air Mobility: <a href="https://www.icao.int/Meetings/AAM2024/Pages/default.aspx">https://www.icao.int/Meetings/AAM2024/Pages/default.aspx</a></p> <p><a href="#_ftnref7" name="_ftn7">[7]</a> TNMT study on passenger frustration: <a href="https://tnmt.com/passenger-frustration-with-airlines/">https://tnmt.com/passenger-frustration-with-airlines/</a></p> <p><a href="#_ftnref8" name="_ftn8">[8]</a> New law on air traffic control (in French): <a href="https://www.lesechos.fr/industrie-services/tourisme-transport/les-greves-du-controle-aerien-seront-mieux-encadrees-a-lavenir-2029453">https://www.lesechos.fr/industrie-services/tourisme-transport/les-greves-du-controle-aerien-seront-mieux-encadrees-a-lavenir-2029453</a></p> <p><a href="#_ftnref9" name="_ftn9">[9]</a> Airlines still flying in Russian airspace: <a href="https://www.flightradar24.com/blog/which-major-airlines-are-still-flying-over-russian-airspace/">https://www.flightradar24.com/blog/which-major-airlines-are-still-flying-over-russian-airspace/</a></p> <p><a href="#_ftnref10" name="_ftn10">[10]</a> FAA on UTM: <a href="https://www.faa.gov/uas/advanced_operations/traffic_management">https://www.faa.gov/uas/advanced_operations/traffic_management</a></p> <p><a href="#_ftnref11" name="_ftn11">[11]</a> IATA on Air Passenger Market: <a href="https://www.iata.org/en/pressroom/2023-releases/2023-10-04-01/">https://www.iata.org/en/pressroom/2023-releases/2023-10-04-01/</a></p> <p><a href="#_ftnref12" name="_ftn12">[12]</a> IATA on Airline Retailing: <a href="https://www.iata.org/en/programs/airline-distribution/retailing/">https://www.iata.org/en/programs/airline-distribution/retailing/</a></p> <p><a href="#_ftnref13" name="_ftn13">[13]</a> ICAO’s TRIP: <a href="https://www.icao.int/security/fal/trip/Pages/default.aspx">https://www.icao.int/security/fal/trip/Pages/default.aspx</a></p> <p><a href="#_ftnref14" name="_ftn14">[14]</a> IATA’s OneID: <a href="https://www.iata.org/en/programs/passenger/one-id/">https://www.iata.org/en/programs/passenger/one-id/</a></p> <p><a href="#_ftnref15" name="_ftn15">[15]</a> ICAO Public Key Directory: <a href="https://www.icao.int/Security/FAL/PKD/Pages/default.aspx">https://www.icao.int/Security/FAL/PKD/Pages/default.aspx</a></p> <p><a href="#_ftnref16" name="_ftn16">[16]</a> African Union’s Single African Air Transport Market: <a href="https://au.int/en/saatm">https://au.int/en/saatm</a></p> <p><a href="#_ftnref17" name="_ftn17">[17]</a> France law restricting domestic flights: <a href="https://www.service-public.fr/particuliers/actualites/A16193">https://www.service-public.fr/particuliers/actualites/A16193</a></p> <p><a href="#_ftnref18" name="_ftn18">[18]</a> ICAO CORSIA: <a href="https://www.icao.int/environmental-protection/CORSIA/Pages/default.aspx">https://www.icao.int/environmental-protection/CORSIA/Pages/default.aspx</a></p> <p> </p> </article> <article id="post-23766" class="et_pb_post post-23766 post type-post status-publish format-standard has-post-thumbnail hentry category-airlines category-digital-transformation category-blog category-retailing tag-aviationfest"> <a class="entry-featured-image-url" href="https://worldaviationfestival.com/blog/airlines/the-growing-cost-of-doing-nothing-in-airline-digital-retailing/"> <img data-src="https://worldaviationfestival.com/wp-content/uploads/2023/09/Eric--1080x650.png" alt="The growing cost of doing nothing in airline digital retailing" width="1080" height="675" data-srcset="https://worldaviationfestival.com/wp-content/uploads/2023/09/Eric--1080x650.png 1080w, https://worldaviationfestival.com/wp-content/uploads/2023/09/Eric--980x531.png 980w, https://worldaviationfestival.com/wp-content/uploads/2023/09/Eric--480x260.png 480w" data-sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" src="data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==" class="lazyload" style="--smush-placeholder-width: 1080px; --smush-placeholder-aspect-ratio: 1080/675;" /><noscript><img src="https://worldaviationfestival.com/wp-content/uploads/2023/09/Eric--1080x650.png" alt="The growing cost of doing nothing in airline digital retailing" class="" width="1080" height="675" srcset="https://worldaviationfestival.com/wp-content/uploads/2023/09/Eric--1080x650.png 1080w, https://worldaviationfestival.com/wp-content/uploads/2023/09/Eric--980x531.png 980w, https://worldaviationfestival.com/wp-content/uploads/2023/09/Eric--480x260.png 480w" sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" /></noscript> </a> <h2 class="entry-title"><a href="https://worldaviationfestival.com/blog/airlines/the-growing-cost-of-doing-nothing-in-airline-digital-retailing/">The growing cost of doing nothing in airline digital retailing</a></h2> <p class="post-meta"> by <span class="author vcard"><a href="https://worldaviationfestival.com/author/ericthreedot/" title="Posts by Eric Leopold (Threedot)" rel="author">Eric Leopold (Threedot)</a></span> | <span class="published">Sep 21, 2023</span> | <a href="https://worldaviationfestival.com/category/blog/airlines/" rel="category tag">Airlines</a>, <a href="https://worldaviationfestival.com/category/blog/digital-transformation/" rel="category tag">Digital Transformation</a>, <a href="https://worldaviationfestival.com/category/blog/" rel="category tag">News</a>, <a href="https://worldaviationfestival.com/category/blog/retailing/" rel="category tag">Retailing</a></p><p>As many airlines and most system providers either have implemented a solution or have a plan towards digital retailing, several players have not decided a way forward yet. The main reasons for “doing nothing” about digital retailing include a lack of compelling business case, a lack of funding or simply competing priorities.</p> <p> </p> <h3>The business case for the transition to airline digital retailing</h3> <p>The business case for the transition to airline digital retailing is well defined at industry level. The last example comes from IATA who published a document<a href="#_ftn1" name="_ftnref1">[1]</a> in March 2023. The document covers key findings about potential savings from NDC and ONE Order implementations, as well as the cost of not implementing.</p> <p>Since 2019 McKinsey published a report on the value of airline retailing, estimated at $40Bn by 2030. They added a new report<a href="#_ftn2" name="_ftnref2">[2]</a> in 2022 exploring the benefit of payment innovation, to address the $20Bn annual costs of payment.</p> <p>BCG has published a series of articles about the “Airline retail revolution”. In an October 2022 report<a href="#_ftn3" name="_ftnref3">[3]</a>, they focus on the airline organization required to undertake the transition to digital retailing, around: Revenue Management, Offer Creation, Ancillary Products, and Marketing.</p> <p>Not only the business case is here but the solutions are here too. In June 2023, Threedot published an article<a href="#_ftn4" name="_ftnref4">[4]</a> about Order Management Systems available in the market, listing 9 vendors and their respective solutions.</p> <p>Funding is also here after a profitable year for airlines, as reported<a href="#_ftn5" name="_ftnref5">[5]</a> by IATA in June 2023. The latest forecast is $9.8Bn for 2023, which is still low compared to revenue but a positive sign of recovery.</p> <p>If the business case, the solutions and the funding are there, why do some players opt for “doing nothing”? Is there a business case for “Wait & See”?</p> <p> </p> <h3>The short-term consequences of inaction</h3> <p>Let’s imagine we had to get a business case approved for the “Wait & See” strategy. The three pillars of this strategy would be:</p> <ul> <li>Missed opportunities in ancillary sales</li> <li>Delays and costs in changes and refunds</li> <li>Lack of integration with multimodal partners</li> </ul> <p>Each pillar has small consequences in the beginning, which may justify the inaction. We miss opportunities of selling ancillaries via travel agents, compared to direct sales, but we don’t know how much, so it doesn’t hurt. We have delays in changing booking and refunding customers, but we don’t know how upset customers are and we cannot measure their frustration, or the impact of frustration on lost business. Finally, we cannot do business with rail partners seamlessly, but we don’t measure the impact on our business and our carbon emissions, so it does not matter.</p> <p>When assessing the short-term consequences of inaction, we can justify “doing nothing” for another year or two.</p> <p> </p> <h3>The long-term impact of not-transitioning</h3> <p>As more partners and sellers get on with NDC, the new normal will be API connectivity, somewhere between 2025 and 2030. The cost of “doing nothing” will keep growing and include for example:</p> <ul> <li>No personalization of offers</li> <li>Inability to implement continuous pricing and dynamic offers</li> <li>Double cost of infrastructure: Direct + Legacy indirect</li> </ul> <p>The business case of inaction will include the growing complexity of innovating on legacy platforms. Every new requirement for the coming years will be developed on old systems that will be decommissioned soon, meaning that every development will have to be done again. The sooner the transition the cheaper.</p> <p>In summary, the more the industry will move to digital retailing, the more missed opportunity will pass by.</p> <p> </p> <h3>Conclusion</h3> <p>In most cases, the cost of “doing nothing” is not measured, although we can assume that it is growing every year.</p> <p>The good news for “Wait & See” strategy is that there will always be a bridge to phase out legacy processes and systems. There is no train leaving the station and a risk of missing the train.</p> <p>Even better, in 2030 (or before) there might be a radical new way of selling airline products which makes NDC obsolete and digital retailing can be leapfrogged (although I cannot imagine yet what this would like, maybe a decentralized platform).</p> <p>In any case, “doing nothing” when it comes to digital retailing has a cost, a growing cost, and sooner or later, after a system failure, a major business requirement, a cyber-attack or else, the remaining player will embrace the transition and get the benefits of a modern, customer-centric, retailing experience.</p> <p> </p> <hr /> <p><a href="#_ftnref1" name="_ftn1">[1]</a> IATA Modern Airline Retailing – A Business Case: <a href="https://www.iata.org/en/publications/newsletters/airline-retailing-hub/modern-airline-retailing---a-business-case/">https://www.iata.org/en/publications/newsletters/airline-retailing-hub/modern-airline-retailing—a-business-case/</a></p> <p><a href="#_ftnref2" name="_ftn2">[2]</a> McKinsey Airline retailing : How payment innovation can improve the bottom line <a href="https://www.mckinsey.com/industries/travel-logistics-and-infrastructure/our-insights/airline-retailing-how-payment-innovation-can-improve-the-bottom-line">https://www.mckinsey.com/industries/travel-logistics-and-infrastructure/our-insights/airline-retailing-how-payment-innovation-can-improve-the-bottom-line</a></p> <p><a href="#_ftnref3" name="_ftn3">[3]</a> BCG Reshaping the Airline Organization for the Future of Retail <a href="https://www.bcg.com/publications/2022/airline-retail-revolution-demands-reshaping-airline-organization">https://www.bcg.com/publications/2022/airline-retail-revolution-demands-reshaping-airline-organization</a></p> <p><a href="#_ftnref4" name="_ftn4">[4]</a> Threedot Overview of Airline Order Management Systems <a href="https://threedot.io/overview-of-airline-order-management-systems/">https://threedot.io/overview-of-airline-order-management-systems/</a></p> <p><a href="#_ftnref5" name="_ftn5">[5]</a> IATA Airline Profitability Outlook Strengthens <a href="https://www.iata.org/en/pressroom/2023-releases/2023-06-05-01/">https://www.iata.org/en/pressroom/2023-releases/2023-06-05-01/</a></p> <p> </p> </article> <article id="post-23495" class="et_pb_post post-23495 post type-post status-publish format-standard has-post-thumbnail hentry category-airlines category-airports category-blog tag-airlines tag-sustainability tag-world-aviation-festival"> <a class="entry-featured-image-url" href="https://worldaviationfestival.com/blog/airlines/is-aviation-in-the-mood-for-a-festival/"> <img data-src="https://worldaviationfestival.com/wp-content/uploads/2023/09/Eric-2-1080x650.png" alt="Is Aviation in the mood for a Festival?" width="1080" height="675" data-srcset="https://worldaviationfestival.com/wp-content/uploads/2023/09/Eric-2-1080x650.png 1080w, https://worldaviationfestival.com/wp-content/uploads/2023/09/Eric-2-980x531.png 980w, https://worldaviationfestival.com/wp-content/uploads/2023/09/Eric-2-480x260.png 480w" data-sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" src="data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==" class="lazyload" style="--smush-placeholder-width: 1080px; --smush-placeholder-aspect-ratio: 1080/675;" /><noscript><img src="https://worldaviationfestival.com/wp-content/uploads/2023/09/Eric-2-1080x650.png" alt="Is Aviation in the mood for a Festival?" class="" width="1080" height="675" srcset="https://worldaviationfestival.com/wp-content/uploads/2023/09/Eric-2-1080x650.png 1080w, https://worldaviationfestival.com/wp-content/uploads/2023/09/Eric-2-980x531.png 980w, https://worldaviationfestival.com/wp-content/uploads/2023/09/Eric-2-480x260.png 480w" sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" /></noscript> </a> <h2 class="entry-title"><a href="https://worldaviationfestival.com/blog/airlines/is-aviation-in-the-mood-for-a-festival/">Is Aviation in the mood for a Festival?</a></h2> <p class="post-meta"> by <span class="author vcard"><a href="https://worldaviationfestival.com/author/ericthreedot/" title="Posts by Eric Leopold (Threedot)" rel="author">Eric Leopold (Threedot)</a></span> | <span class="published">Sep 4, 2023</span> | <a href="https://worldaviationfestival.com/category/blog/airlines/" rel="category tag">Airlines</a>, <a href="https://worldaviationfestival.com/category/blog/airports/" rel="category tag">Airports</a>, <a href="https://worldaviationfestival.com/category/blog/" rel="category tag">News</a></p><p>In an industry as dynamic and transformational as aviation, the notion of a “festival” might seem frivolous. After all, we’re talking about a sector responsible for the safe and efficient transport of millions of people and shipments every day around the globe.</p> <p>I’m asking the question of mood because my mind is in two places at the same time. On the festive side, you have heard that passenger volumes have recovered pre-Covid levels after three years of crisis, and States have agreed on a net zero CO2 emissions goal by 2050.</p> <p>At the serious side, we are moving into an era of uncertainty related to energy transition environmental sustainability, and you can hear, especially in Europe, that the public is skeptical about the aviation’s goal to cut their share of CO2 emission, currently at 2% of the world’s total emissions.</p> <p>While the continuous benefits of aviation and the new developments are worth gathering and celebrating, the pressure on decarbonizing faster is a growing concern.</p> <p> </p> <p><img fetchpriority="high" decoding="async" class="aligncenter wp-image-23531 size-full" src="https://worldaviationfestival.com/wp-content/uploads/2023/09/eric-fig-1.png" alt="" width="727" height="695" srcset="https://worldaviationfestival.com/wp-content/uploads/2023/09/eric-fig-1.png 727w, https://worldaviationfestival.com/wp-content/uploads/2023/09/eric-fig-1-480x459.png 480w" sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) 727px, 100vw" /></p> <p> </p> <h3>Reducing aviation’s environmental impact</h3> <p>The big picture of CO2 emissions is that the industrial age, powered by fossil fuel combustion, is generating greenhouse gas (GHG) which contribute to climate change and global warming. The official source for data on this topic is the Intergovernmental Panel on Climate Change<a href="#_ftn1" name="_ftnref1">[1]</a> (IPCC), which is the “United Nation’s body for assessing the science related to climate change”. Their latest “Summary for Policymakers” provides trends, by type of emission or by region, and solutions, by type of energy, to limit global warming.</p> <p>For simplicity, according to 2016 figures<a href="#_ftn2" name="_ftnref2">[2]</a>, with global GHG emissions of 50 billion tonnes, see below, the industry roughly represents 24% of GHG emissions, agriculture 18%, buildings 17%, and transport 16%. All sectors have got their respective plans to reduce their emissions. In transport, road (12%), air (2%) and maritime (2%) add up to the 16%. While road has started deploying electric vehicles powered by batteries, the plan for air transport is a new synthetic fuel called SAF (for Sustainable Aviation Fuel).</p> <p>Air transport needs an energy transition away from fossil fuels. In some regions the transition is driven by the pressure of climate change and global warming forecast, in other regions the end of the supply of fossil fuels in the coming decade will require a similar transition. In the last 12 months, States, collectively under their organization for aviation, ICAO, have adopted a Long-Term Aspirational Goal<a href="#_ftn3" name="_ftnref3">[3]</a> for net-zero emission by 2050, and the airlines’ association, IATA, has published their plan, called Net Zero Roadmaps<a href="#_ftn4" name="_ftnref4">[4]</a>. While there is a long way to go, and 2050 sounds far away, it is re-assuring to know that States, airlines and the entire aviation industry has a goal and a roadmap to reduce their CO2 footprint.</p> <p>The real challenge, for aviation and the world, may be elsewhere, in the geographical differences and geopolitics. If you look at the CO2 emissions in the world in the past 50 years, the world went roughly from 17 Bn tonnes to 37 Bn tonnes, more than double. At a personal level, the CO2 in atmosphere was 332 parts per million when I was born in 1973 and is now 411 ppm. Interestingly, Europe’s emissions have decreased in the past 50 years, from about 4 Bn tonnes per year to 3 Bn, while the rest of the world grew indeed from 13 Bn to 34 Bn. The population in Europe (and the developed world) benefits from a mature economy and from historical infrastructure investments which help reduce emissions, while the rest of the world has a developing economy and growing needs for energy, production and transport.</p> <p> </p> <p><img decoding="async" class="aligncenter wp-image-23533 size-full lazyload" data-src="https://worldaviationfestival.com/wp-content/uploads/2023/09/eric-fig-2.png" alt="" width="745" height="579" data-srcset="https://worldaviationfestival.com/wp-content/uploads/2023/09/eric-fig-2.png 745w, https://worldaviationfestival.com/wp-content/uploads/2023/09/eric-fig-2-480x373.png 480w" data-sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) 745px, 100vw" src="data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==" style="--smush-placeholder-width: 745px; --smush-placeholder-aspect-ratio: 745/579;" /><noscript><img decoding="async" class="aligncenter wp-image-23533 size-full" src="https://worldaviationfestival.com/wp-content/uploads/2023/09/eric-fig-2.png" alt="" width="745" height="579" srcset="https://worldaviationfestival.com/wp-content/uploads/2023/09/eric-fig-2.png 745w, https://worldaviationfestival.com/wp-content/uploads/2023/09/eric-fig-2-480x373.png 480w" sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) 745px, 100vw" /></noscript></p> <p> </p> <h3>We’ve almost recovered from COVID</h3> <p>Air traffic has almost fully recovered post-Covid, reaching in June 2023 95% of the same period in 2019<a href="#_ftn5" name="_ftnref5">[5]</a>. During this year of recovery and mechanically strong growth (traffic was 31% higher than same period in 2022), demand grew faster than supply, as airlines and the supply chain struggled to put aircraft quickly in the sky. The result of the supply / demand profile is higher airline fares and consequently strong profitability.</p> <p>For example, Emirates reported their most profitable year, at US$ 3 billion profit for 2022-2023. This profit alone however is not big enough to compensate for the Covid losses. Similarly, IAG reported record Q2 profit in 2023 at €1.2 billion<a href="#_ftn6" name="_ftnref6">[6]</a>. At industry level IATA expects profits $9.8 billion in 2023<a href="#_ftn7" name="_ftnref7">[7]</a>, which is only 1.2% profit margin and not enough to make the industry financially sustainable.</p> <p>If traffic numbers airlines have recovered from Covid, and airlines have shown profits recently, airlines have not compensated the losses accumulated during the Covid crisis and the entire industry is still fragile.</p> <p> </p> <h3>Benefits of aviation</h3> <p>The suspension of air travel during Covid reminded everyone of the benefits of aviation. We remember the value of something once we miss it. The impossibility to visit friends and family, to go on holidays or to meet clients and partners for business made us travel. The limitations on the cargo supply chain slowed down the entire economy, reducing the food deliveries or availability of consumer electronics. Some countries, like island states, which are highly dependent on aviation, suffered the most from the suspension and isolation from the rest of the world.</p> <p>The alternative mode of transport often quoted to replace air transport is rail. In mature markets like Europe, where a broad network is available, the operational (environmental) cost of rail is lower than air transport. However in the majority of the world where rail is not available, the (environmental) cost of building the rail infrastructure is very high. Studies show $1m to $2m for 1km of conventional rail, much more for high-speed rail. If we add a tunnel or bridge, the cost is $10m to $100m per kilometre. It means that a developing country has a choice of paying nothing to connect two airports by air over a distance of 1000km or paying $1bn-$10bn to connect the two train stations over the same distance. Whenever the transport infrastructure budget competes with health, education and other budget, the decision to invest billions in railway infrastructure is not obvious. For the same cost, would you build one railway or a thousand schools and hospitals for your country?</p> <p> </p> <h3>Time for gathering but too early for celebrating</h3> <p>Given the climate change issues and the benefits of aviation, the debate may not be so much about the value of air transport, but about the viability if we don’t implement sustainable solutions quickly. The energy transition, away from fossil fuels, at global level, translates for the aviation sector into the production and distribution of new fuels.</p> <p>The World Aviation Festival is the opportunity for gathering and debating many topics which can make the air travel experience better and the air travel industry more sustainable. The aviation sector has faced major challenges since the inception of the international framework in 1944, including the unprecedented events of 9/11 and Covid-19. The next challenge may be its biggest ever, but it is not a surprise: the need to decarbonize the industry, while dealing with a reduced growth in traffic.</p> <p>Personally, I will attend the World Aviation Festival in Europe, as I’m in the mood for gathering with passionate people who want to make air travel sustainable. Europe has demonstrated the ability to cap CO2 emissions over decades, and may be able to lead the way to net zero emissions in aviation.</p> <p> </p> <hr /> <p>Article by<a href="https://threedot.io/"> Eric Leopold</a></p> <p><a href="#_ftnref1" name="_ftn1">[1]</a> <a href="https://www.ipcc.ch/">https://www.ipcc.ch/</a></p> <p><a href="#_ftnref2" name="_ftn2">[2]</a> <a href="https://ourworldindata.org/emissions-by-sector">https://ourworldindata.org/emissions-by-sector</a></p> <p><a href="#_ftnref3" name="_ftn3">[3]</a> <a href="https://www.icao.int/environmental-protection/Pages/LTAG.aspx">https://www.icao.int/environmental-protection/Pages/LTAG.aspx</a></p> <p><a href="#_ftnref4" name="_ftn4">[4]</a> <a href="https://www.iata.org/en/programs/environment/roadmaps/">https://www.iata.org/en/programs/environment/roadmaps/</a></p> <p><a href="#_ftnref5" name="_ftn5">[5]</a> <a href="https://www.iata.org/en/pressroom/2023-releases/2023-08-08-01/">https://www.iata.org/en/pressroom/2023-releases/2023-08-08-01/</a></p> <p><a href="#_ftnref6" name="_ftn6">[6]</a> <a href="https://www.gridpoint.consulting/blog/record-second-quarter-results-at-iag">https://www.gridpoint.consulting/blog/record-second-quarter-results-at-iag</a></p> <p><a href="#_ftnref7" name="_ftn7">[7]</a> <a href="https://www.iata.org/en/pressroom/2023-releases/2023-06-05-01/">https://www.iata.org/en/pressroom/2023-releases/2023-06-05-01/</a></p> <p> </p> </article> <article id="post-22972" class="et_pb_post post-22972 post type-post status-publish format-standard has-post-thumbnail hentry category-airlines category-digital-transformation category-blog category-travel-technology tag-airlines tag-artificial-intelligence tag-genai tag-travel-tech"> <a class="entry-featured-image-url" href="https://worldaviationfestival.com/blog/airlines/can-passengers-expect-a-genai-revolution/"> <img data-src="https://worldaviationfestival.com/wp-content/uploads/2023/07/AI-3-1080x600.png" alt="Can passengers expect a GenAI revolution?" width="1080" height="675" data-srcset="https://worldaviationfestival.com/wp-content/uploads/2023/07/AI-3-1080x600.png 1080w, https://worldaviationfestival.com/wp-content/uploads/2023/07/AI-3-980x490.png 980w, https://worldaviationfestival.com/wp-content/uploads/2023/07/AI-3-480x240.png 480w" data-sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" src="data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==" class="lazyload" style="--smush-placeholder-width: 1080px; --smush-placeholder-aspect-ratio: 1080/675;" /><noscript><img src="https://worldaviationfestival.com/wp-content/uploads/2023/07/AI-3-1080x600.png" alt="Can passengers expect a GenAI revolution?" class="" width="1080" height="675" srcset="https://worldaviationfestival.com/wp-content/uploads/2023/07/AI-3-1080x600.png 1080w, https://worldaviationfestival.com/wp-content/uploads/2023/07/AI-3-980x490.png 980w, https://worldaviationfestival.com/wp-content/uploads/2023/07/AI-3-480x240.png 480w" sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" /></noscript> </a> <h2 class="entry-title"><a href="https://worldaviationfestival.com/blog/airlines/can-passengers-expect-a-genai-revolution/">Can passengers expect a GenAI revolution?</a></h2> <p class="post-meta"> by <span class="author vcard"><a href="https://worldaviationfestival.com/author/ericthreedot/" title="Posts by Eric Leopold (Threedot)" rel="author">Eric Leopold (Threedot)</a></span> | <span class="published">Jul 28, 2023</span> | <a href="https://worldaviationfestival.com/category/blog/airlines/" rel="category tag">Airlines</a>, <a href="https://worldaviationfestival.com/category/blog/digital-transformation/" rel="category tag">Digital Transformation</a>, <a href="https://worldaviationfestival.com/category/blog/" rel="category tag">News</a>, <a href="https://worldaviationfestival.com/category/blog/travel-technology/" rel="category tag">Travel Tech</a></p><h1>GenAI, the inflection point</h1> <p> </p> <p>The topic of artificial intelligence (AI) has been on the table for several decades. In recent years, this transformative journey has reached memorable milestones such as IBM’s Deep Blue beating a chess world champion, and more recently, DeepMind’s AlphaGo made headlines by winning against a professional Go player. Late last year, we’ve come to an inflection point, where AI got closer to conquering the Turing test, which discerns human intelligence from artificial one.</p> <p>We are now living in a new era, brought by the revolution of Generative AI (GenAI), a type of applications that creates text, sound, or images (artefacts) from manual inputs (prompts). While AI has made significant strides across various domains, GenAI impresses as it mirrors human intelligence, particularly in generating articles or drawing images.</p> <p>Simultaneously, the aviation industry has demonstrated its appetite for technological adoption, with a rich history spanning from pre-internet network connectivity with airports and travel agencies to cutting-edge advancements in automated aircraft piloting and other process automation like sorting billions of bags.</p> <p>Will airlines and the air travel industry embrace GenAI? What impact will it have on customer experience and airline operations? Can passengers expect a GenAI revolution?</p> <p> </p> <h3>Humans and machines</h3> <p>The author of this article is a human being, who enlisted the assistance of ChatGPT-4 to compile this piece in an attempt to combine, rather than oppose, human and artificial, or humans and machines. I’ve used GenAI to guide the article’s structure, exploration, and referencing, producing the AI-enhanced content that you are reading now. For clarity, “AI” in this article refers to Artificial Intelligence, and not to the IATA 2-letter code for Air India.</p> <p>My interest in artificial intelligence started in the 1990s when studying and programming neural networks using Yann LeCun’s method (<a href="https://threedot.io/wp-content/uploads/2023/07/NIPS-1989-optimal-brain-damage-Paper.pdf">Optimal Brain Damage</a>, Le Cun, Denker, Solla 1989). LeCun noted, more than thirty years ago, that “as the number of parameters in the systems increases, overfitting problems may arise, with devastating effects on the generalization performance”. Today’s Large Language Models (ChatGPT being a LLM) may contain hundreds of billions of parameters to be trained on datasets containing billions of words, which raises the question of generalization. Are these LLMs good at memorizing or can they generalize and understand?</p> <p>My interest grew when exploring AI applications in aviation in the 2010s, see for example IATA’s 2018 white paper about <a href="https://threedot.io/wp-content/uploads/2023/07/IATA-AIinAviation-Whitepaper.pdf">AI in Aviation</a> (not available on IATA’s website any longer). Most of the findings are still relevant, from AI-enhanced customer touchpoint capabilities to operational capabilities and supporting capabilities.</p> <p> </p> <h3>Vision for the AI-powered airline</h3> <p>The vision for an AI-powered (including GenAI) airline is a travel service provider with enhanced safety, sustainability, customer-centricity, and operational efficiency.</p> <p>Airline customers will benefit from all these enhancements in many ways, including smooth flights, on-time journeys, reduced or eliminated queues, personal travel advice and services, and more.</p> <p> </p> <h3>Value is in scaling human capabilities</h3> <p>AI offers airlines value by augmenting or replacing current human-dependent tasks. AI is scaling human capabilities.</p> <p>GenAI, via the Language Models, has an obvious application for customer interaction, where AI could enhance interaction quality through email, web forms, and call centers. Early attempts at digitizing these interactions with chatbots fell short of human interaction capabilities. However, GenAI promises improved accuracy and response times, adding a human touch through cabin crew who deliver GenAI-driven responses.</p> <p>GenAI has a broader ability to analyze large of text and data, and to produce analysis and recommendations. This capability has an application in commercial planning, which encompasses network and schedule planning, revenue management, and offer creation. As we’ve discussed in an <a href="https://worldaviationfestival.com/blog/airlines/from-selling-ancillaries-to-shaping-travel-experiences/">article</a> last month, AI can help shape personalized experiences at scale</p> <p>Finally, AI can improve operational planning, from optimizing route planning to predictive maintenance and disruption management.</p> <p> </p> <h3>New paradigm, new solutions</h3> <p>When seeking solutions, airlines have three main options: license a proprietary solution, partner with a tech startup, or develop their own solution based on an open-source platform.</p> <p>The pros of proprietary solutions are the integration with existing software and the perceived security. The cons are typically the speed of implementation, the innovation and the contractual limitations.</p> <p>Tech startup would typically provide the opposite relationship, based on speed, innovation and flexibility, but lacking integration and scale.</p> <p>Finally the development of an solution may seem to be limited to large airlines, with IT teams, but actually the barriers to entry have lowered thanks to the availability of cloud-based open-source solutions. The benefits of this approach include control, speed, agility but also tested security.</p> <p> </p> <h3>Hallucination and privacy risks</h3> <p>Although the benefits are substantial, potential risks associated with GenAI, such as <a href="https://en.wikipedia.org/wiki/Hallucination_(artificial_intelligence)">hallucinations</a> and data privacy, may be underestimated. “Hallucinations” refer to AI systems making statements that don’t align with reality, while data privacy issues arise when these systems learn from confidential user data and produce content in response that is made available to the public and competition.</p> <p>For airlines, the safety risk is the potential for applications to make erroneous assumptions on routes, maintenance, or flight decisions. Given safety is the top priority in the airline industry, all AI applications that could affect safety will be under intense scrutiny.</p> <p>Similarly, the risk for customer interaction arises when chatbots make incorrect recommendations, leading to customer disappointment. This can be mitigated by fact-checking GenAI outputs, while increasing staff productivity.</p> <p>Lastly, there is a risk to airlines’ profitability if the GenAI systems are not properly managed or integrated. Many airlines prefer to test and learn, typically with internal use cases, such as editing documents and drafting emails. Some airlines have already identified all the GenAI use cases across their business, sorted by level of impact, effort and risk.</p> <p> </p> <h3>A revolution is coming</h3> <p>GenAI is clearly revolutionizing many aspect of the airline business and the customer experience. Companies that have been slow to prioritize technology or form a digital strategy risk falling behind the digital trailblazers that have embraced AI, and since the beginning of the year GenAI.</p> <p>Airlines should be cautious of over-reliance on a single technology and/or partner for their GenAI experiments as it could lead to dependency, slow innovation or limited access to their own data.</p> <p>Leveraging their extensive history with IT, airlines will undoubtedly make informed decisions as they navigate this new chapter in their technological journey. Customers can definitely expect a revolution in the travel experience in the coming months.</p> <p> </p> <hr /> <p>Article by <a href="https://threedot.io/">Eric Leopold</a></p> <p> </p> </article> <article id="post-22668" class="et_pb_post post-22668 post type-post status-publish format-standard has-post-thumbnail hentry category-airlines category-blog category-retailing category-travel-technology tag-airlines tag-digital-transformation tag-travel-retailing tag-travel-tech"> <a class="entry-featured-image-url" href="https://worldaviationfestival.com/blog/airlines/from-selling-ancillaries-to-shaping-travel-experiences/"> <img data-src="https://worldaviationfestival.com/wp-content/uploads/2023/06/Eric-1-1080x600.png" alt="From selling ancillaries to shaping travel experiences" width="1080" height="675" data-srcset="https://worldaviationfestival.com/wp-content/uploads/2023/06/Eric-1-1080x600.png 1080w, https://worldaviationfestival.com/wp-content/uploads/2023/06/Eric-1-980x490.png 980w, https://worldaviationfestival.com/wp-content/uploads/2023/06/Eric-1-480x240.png 480w" data-sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" src="data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==" class="lazyload" style="--smush-placeholder-width: 1080px; --smush-placeholder-aspect-ratio: 1080/675;" /><noscript><img src="https://worldaviationfestival.com/wp-content/uploads/2023/06/Eric-1-1080x600.png" alt="From selling ancillaries to shaping travel experiences" class="" width="1080" height="675" srcset="https://worldaviationfestival.com/wp-content/uploads/2023/06/Eric-1-1080x600.png 1080w, https://worldaviationfestival.com/wp-content/uploads/2023/06/Eric-1-980x490.png 980w, https://worldaviationfestival.com/wp-content/uploads/2023/06/Eric-1-480x240.png 480w" sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" /></noscript> </a> <h2 class="entry-title"><a href="https://worldaviationfestival.com/blog/airlines/from-selling-ancillaries-to-shaping-travel-experiences/">From selling ancillaries to shaping travel experiences</a></h2> <p class="post-meta"> by <span class="author vcard"><a href="https://worldaviationfestival.com/author/ericthreedot/" title="Posts by Eric Leopold (Threedot)" rel="author">Eric Leopold (Threedot)</a></span> | <span class="published">Jun 29, 2023</span> | <a href="https://worldaviationfestival.com/category/blog/airlines/" rel="category tag">Airlines</a>, <a href="https://worldaviationfestival.com/category/blog/" rel="category tag">News</a>, <a href="https://worldaviationfestival.com/category/blog/retailing/" rel="category tag">Retailing</a>, <a href="https://worldaviationfestival.com/category/blog/travel-technology/" rel="category tag">Travel Tech</a></p><h1>From selling ancillaries to shaping travel experiences</h1> <p> </p> <p>What will airline ancillaries become in a world of modern airline retailing? How will AI shape the guest experience during the air travel journey?</p> <p>Since the deregulation of air travel and the creation of the low-cost model, airlines have embarked in the “unbundling” of the services they used to sell. The former “attributes” of the customer experience, included in the airline fare, have become “a-la-carte” services, such as bags, meals, seats or changes. As airline processes and systems did not evolve at the same speed as the commercial practices, airlines added layers on top of their legacy processes and systems to deal with ancillaries and merchandizing.</p> <p>Fast forward to today, as many airlines have embarked into the transition to digital retailing, where the guest experience is the priority, what may happen to the ancillaries? Are they still an after-thought post booking or are they becoming the heart of dynamic offers?</p> <p> </p> <h3>Five different kinds of “ancillaries”</h3> <p>Let’s review first the different kinds of ancillaries. The most common category is the services, mentioned above, coming from the unbundling of the airline fare. Customers only pay for what they need. The most frequent ancillaries are typically bags, seats, meals. Others include priority boarding, security fast track, lounge access, time to think or wifi on board. They are optional in the sense that customers are able to travel without using any of them.</p> <p>The next category is the fees, associated to the booking and the payment, some of them are not even optional. For example, booking fees, change fees, or credit card fees, or cancellation fees. These fees represent significant revenue for airlines, besides the ticket fares, although customers may not recognize them as services as in the first category.</p> <p>A similar category is any airline revenue unrelated to the customer experience. Indeed some airlines report as “ancillary” their cargo revenue or the sale of points to card schemes. The absence of official definition makes it possible for airlines to include any revenue coming from flight operations as “ancillary” revenue.</p> <p>Airlines have become better at selling services from third-parties. For example, the two parties of the travel experience are the carrier and the traveler, and the third party is the insurance company. All those flight-related services, provided by a third-party, are a category of ancillaries. They include travel insurance, bag insurance, price guarantees, visa services, etc.</p> <p>Finally, some airlines have outgrown the strict definition of “airline” to sell any travel services and more. The travel-related services, beyond the flight, include hotels, rail, car rental, cruise, tours, events or SIM cards and more. By entering this space, airlines become relevant to travelers, who generally have a broader travel need to fulfil, but also overlap with travel agencies.</p> <p>All the categories of ancillaries, except cargo revenue, will be impacted by the shift to digital retailing. Customers will find it easier and even seamless to include them in the travel experience.</p> <p> </p> <h3>The challenge of personalizing the guest experience at scale</h3> <p>Indeed the “unbundling” of the travel experience and the creativity of travel providers has led to a certain level of complexity. On the bright side, different type of travelers, from business travelers to families or passengers with reduced mobility, can enjoy a tailored experience. On the dark side, booking all the options across multiple providers is a challenge, which becomes impossible in case of disruption.</p> <p>Three ingredients make overcoming the challenge more realistic: customer data platform<a href="#_ftn1" name="_ftnref1">[1]</a>, AI and retailing.</p> <p>Legacy airlines have managed data in silos, each system processing a set of data and integrating with other system. At the heart of airline commercial system, a transactional record called the PNR. Rethinking the commercial system around a “customer data platform” enables to better channel communications to customers and to better personalize offers to customers. Two benefits that resonate well with airlines’ customers.</p> <p>Legacy airlines have relied on business rules and constraints to manage their revenue. They had to file a specific fare for each individual combination of options. In a world of AI, the commercial system can learn from the customer preferences and behaviors to recommend the most suitable offer. Digital retailers have pioneered these recommendation techniques for two decades. Airline customers will receive offers that are likely to match their needs.</p> <p>Legacy airlines have delegated the creation of offers to intermediaries which were provided with schedules, fares and inventories. While it was convenient before internet existed, it did not evolve towards the digital retailing world. With the availability of offers and orders, airlines are now able to create the offers by themselves across all channels.</p> <p>Combining customer data, AI and offers, airlines can personalize the guest experience at scale, without placing the burden on the customer to manually select every option.</p> <p> </p> <h3>Will dynamic offers handle all the recent innovative use cases?</h3> <p>Despite the restrictions mentioned above, airlines were able to innovate in the ancillary space in the last decade. Will the retailing model, including dynamic offers, support these innovations? Will the new systems, called Offer-Order Management Systems, handle the innovative use cases? Let’s explore a few use cases.</p> <p>SWISS introduced the “green fare”<a href="#_ftn2" name="_ftnref2">[2]</a>. It is called “green” because it includes 20% of SAF and 80% of carbon offset. It comes with a lot of unrelated features: more miles collected, hold baggage, e-newspapers, snacks and beverage, and rebooking option. In a retailing world, “green” becomes a sustainability feature (SAF, offset) which can be combined to any other unrelated features.</p> <p>Alaska Airlines introduced the “Flight Pass”<a href="#_ftn3" name="_ftnref3">[3]</a>, a subscription starting at $49 monthly giving access to heavy discounts on regional flights. The subscription gives access to the “right to fly” but not to the full experience, the differentiation is the number of flights and the booking window. We can imagine a world of dynamic offers influenced by the subscription levels.</p> <p>Several airlines propose last minute upgrades, either at a flat rate or via an auction mechanism. While the gaming part of the experience is interesting, the class of travel decision can take place at booking, for budget or status reasons, or at time of travel, for personal reasons maybe. In a modern retailing environment, the upgrade option is available for any order, at a dynamic price.</p> <p>Other airlines have fare alerts on certain routes or services, as selected by customers. These alerts, or simply notifications, will become recommendations that may enhance the guest experience. A customer may book a flight early on, to secure a seat, and customize the experience closer to departure based on recommendations and “alerts”.</p> <p>Finally, there is no marketplace today for the secondary sale of tickets, despite obvious benefits for both airlines and travelers. Airlines could benefit from the resale of tickets and customers could avoid losing non-refundable tickets or find a seat on fully booked flights. In a world of offers and orders, the exchangeable “NFTicket”<a href="#_ftn4" name="_ftnref4">[4]</a> becomes an order with a lifecycle.</p> <p> </p> <h3>The business of memorable experiences</h3> <p>As the paradigm has shifted from fares to offers, will the paradigm of ancillaries evolve too? Should ancillary be limited to non-flight or non-airline products and services, e.g. cargo or miles? Should the focus be on the guest experience and their attributes or options, rather than ancillaries?</p> <p>While the customer needs evolve, towards digital, sustainability and experiences, and while technology and capabilities evolve in the same direction, the paradigm shift will depend on the airline management’s mindset and vision. Are airlines in the business of transporting goods and people safely? Or are they also in the business of providing memorable experiences, like other service providers in the travel and hospitality industry?</p> <p> </p> <hr /> <p>Article by <a href="https://threedot.io/">Eric Leopold</a></p> <p><a href="#_ftnref1" name="_ftn1">[1]</a> Gartner on Customer Data Platform: <a href="https://www.gartner.com/reviews/market/customer-data-platforms">https://www.gartner.com/reviews/market/customer-data-platforms</a></p> <p><a href="#_ftnref2" name="_ftn2">[2]</a> SWISS green fare: <a href="https://flightpass.alaskaair.com/asa/subscriptions">https://flightpass.alaskaair.com/asa/subscriptions</a></p> <p><a href="#_ftnref3" name="_ftn3">[3]</a> Alaska Airlines: <a href="https://flightpass.alaskaair.com/asa/subscriptions">https://flightpass.alaskaair.com/asa/subscriptions</a></p> <p><a href="#_ftnref4" name="_ftn4">[4]</a> NFTicket by TravelX: <a href="https://travelx.io/nfticket-2/">https://travelx.io/nfticket-2/</a></p> <p> </p> </article> <article id="post-22371" class="et_pb_post post-22371 post type-post status-publish format-standard has-post-thumbnail hentry category-airlines category-airports category-digital-transformation category-blog tag-aviationfest"> <a class="entry-featured-image-url" href="https://worldaviationfestival.com/blog/airlines/digital-identity-customer-centricity-in-air-travel-through-the-eyes-of-the-customer/"> <img data-src="https://worldaviationfestival.com/wp-content/uploads/2023/05/Eric-1080x600.png" alt="Digital identity: Customer-centricity in air travel through the eyes of the customer" width="1080" height="675" data-srcset="https://worldaviationfestival.com/wp-content/uploads/2023/05/Eric-1080x600.png 1080w, https://worldaviationfestival.com/wp-content/uploads/2023/05/Eric-980x490.png 980w, https://worldaviationfestival.com/wp-content/uploads/2023/05/Eric-480x240.png 480w" data-sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" src="data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==" class="lazyload" style="--smush-placeholder-width: 1080px; --smush-placeholder-aspect-ratio: 1080/675;" /><noscript><img src="https://worldaviationfestival.com/wp-content/uploads/2023/05/Eric-1080x600.png" alt="Digital identity: Customer-centricity in air travel through the eyes of the customer" class="" width="1080" height="675" srcset="https://worldaviationfestival.com/wp-content/uploads/2023/05/Eric-1080x600.png 1080w, https://worldaviationfestival.com/wp-content/uploads/2023/05/Eric-980x490.png 980w, https://worldaviationfestival.com/wp-content/uploads/2023/05/Eric-480x240.png 480w" sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" /></noscript> </a> <h2 class="entry-title"><a href="https://worldaviationfestival.com/blog/airlines/digital-identity-customer-centricity-in-air-travel-through-the-eyes-of-the-customer/">Digital identity: Customer-centricity in air travel through the eyes of the customer</a></h2> <p class="post-meta"> by <span class="author vcard"><a href="https://worldaviationfestival.com/author/ericthreedot/" title="Posts by Eric Leopold (Threedot)" rel="author">Eric Leopold (Threedot)</a></span> | <span class="published">May 31, 2023</span> | <a href="https://worldaviationfestival.com/category/blog/airlines/" rel="category tag">Airlines</a>, <a href="https://worldaviationfestival.com/category/blog/airports/" rel="category tag">Airports</a>, <a href="https://worldaviationfestival.com/category/blog/digital-transformation/" rel="category tag">Digital Transformation</a>, <a href="https://worldaviationfestival.com/category/blog/" rel="category tag">News</a></p><h1>Digital identity: Customer-centricity in air travel through the eyes of the customer</h1> <p> </p> <p>We live both in the digital era and in the era of the customer. The aircraft have become full of electronics, the travelers are equipped with digital equipment, and the entire planning and booking experience is completely digital. The concept of identity sits at the edge of the physical and digital worlds and is undergoing a massive transformation. The digital identity has emerged as a key enabler for personalization, efficiency, and security across various stages of the travel journey. This article looks at the big picture of digital identity in travel, as the enabler of the customer-centric travel services. From the personalization of offers to seamless airport experience, immigration processes, document checks, payment and loyalty, let’s check out the exciting possibilities that lie ahead.</p> <p> </p> <h3>Personalized journeys</h3> <p>With new tools and technologies, such as artificial intelligence, airlines and travel companies are able to offer personalized journeys and to deliver personalized experiences. While some consider air travel as a commodity, like a subway or a taxi, Uber has shown that customers value a differentiated service, even for a short ride. Taxi is a commodity?</p> <p>Uber proposes UberX, and Uber XL for groups, Uber Comfort for extra legroom, Uber Black for premium rides, Uber SUV for group premium, Uber WAV for seniors, Uber Green for sustainable rides, Uber Reserve for advance booking, Uber Saver for more savings, Uber Taxi to ride with an official cab, Uber Intercity for long rides, Uber bikes and scooters for city freedom, and Uber Rent for self-controlled rides. Taxis were a commodity… before Uber.</p> <p>By collecting and analyzing data about travelers’ preferences, past bookings, and demographics, travel companies can tailor offers to match individual needs. Through digital identity, airlines can offer personalized flight deals, accommodation options, and travel packages that align with a traveler’s interests and requirements. This level of personalization will enhance customer satisfaction and strengthens loyalty (see more discussion about loyalty below).</p> <p> </p> <h3>Seamless airport experience</h3> <p>Digital identity plays a pivotal role in streamlining the end-to-end, curbside to gate procedures at airports. Traditional paper-based boarding passes have mostly been replaced by digital equivalents such as mobile boarding passes. Traditional paper-based identity documents (passport or driver license) will be replaced by electronic ones related to biometric identifiers. With digital identity verification, travelers can drop a bag, enter a lounge or board an aircraft with the touch of their smartphones, eliminating the need for physical documents.</p> <p>Companies like Thales<a href="#_ftn1" name="_ftnref1">[1]</a>, NEC<a href="#_ftn2" name="_ftnref2">[2]</a>, SITA<a href="#_ftn3" name="_ftnref3">[3]</a>, Vision Box<a href="#_ftn4" name="_ftnref4">[4]</a>, and others, provide technology and solutions, including facial recognition and fingerprint scans, that enable fast and secure identity verification, which means reducing queues, and overall enhancing efficiency of the airport journey.</p> <p> </p> <h3>Enhanced Security and Immigration Processes</h3> <p>The security and immigration processes are a key step in the traveler journey that depends on the government authorities, not on the airline that sold the ticket. While risk-based assessment at security may still take time to be implemented, digital identity has already largely simplified immigration processes, making them more efficient and secure. For instance, Automated Border Control systems and e-Gates leverage digital identity verification to expedite the immigration procedures.</p> <p>Even visa waivers and travel authorization can be handled electronically. The traditional paper visas remain the last roadblock to seamless immigration process. Eventually these systems, based on biometrics and electronic passports, will authenticate travelers in seconds, enabling swift border crossings.</p> <p>Other documents like health and customs forms are already mostly digitalized, like in the Japan entry procedure<a href="#_ftn5" name="_ftnref5">[5]</a> which I used recently. They provide QR codes and self-service solutions to make entry in the country as seamless as possible. Several companies help governments to implement comprehensive digital immigration and border control solutions, for example Travizory’s<a href="#_ftn6" name="_ftnref6">[6]</a> digital border solution.</p> <p> </p> <h3>Beyond air travel, wider implications of Digital Identity on transport</h3> <p>While digital identity advancements have a significant impact on air travel, their applications extend beyond the aviation sector. In other modes of transportation such as trains and buses, digital identity’s verification enhances the ticketing processes and streamline the experience. Digital identity becomes a game-changer when it can be leveraged for seamless integration between different travel service providers, potentially creating a unified travel experience across various providers and their platforms. IATA has similar vision just for the air travel part of the journey, called One ID<a href="#_ftn7" name="_ftnref7">[7]</a>.</p> <p>In the hospitality world digital identity solutions are enabling vacation rentals to verify the identity of their guests, with innovative solutions like Neoke<a href="#_ftn8" name="_ftnref8">[8]</a>. Platforms like Airbnb and Booking.com are integrating digital identity verification processes to enhance security and trust. By validating guests’ identities through secure digital channels, rental hosts can mitigate risks and ensure a safer experience for both parties, as well as comply with registration requirements where applicable. Digital identity verification simply streamlines the check-in and document check process, eliminating the need for physical document checks and reducing potential bottlenecks.</p> <p> </p> <h3>Loyalty and identity</h3> <p>Identity is closely intertwined with loyalty. Digital identity data is the key to access travel companies’ loyalty programs and trigger can offer personalized experience tailored to individual travelers, and in particular to the level of service they are entitled to within the loyalty program. As loyalty programs track customers’ preferences, purchase history, and engagement patterns, they are closely linked to the future airline offer creation systems.</p> <p>Beyond air travel, a traveler’s digital identity can be linked to their frequent flyer program, hotel loyalty program, and car rental rewards, creating a unified loyalty ecosystem. This integration enables travelers to earn and redeem rewards seamlessly, enhancing the overall travel experience and fostering customer loyalty.</p> <p> </p> <h3>Payment and Identity</h3> <p>Digital identity also plays a crucial role in payment processes. The rise of mobile payments and digital wallets has made transactions more convenient and secure. By incorporating digital identity verification into payment systems, travel companies can ensure that transactions are secure and protect against fraudulent activities.</p> <p>For instance, biometric authentication methods, such as fingerprint or facial recognition, can be used to verify a traveler’s identity during payment transactions. This enhances security by adding an additional layer of authentication beyond traditional methods like 4-digit PIN.</p> <p>Travel companies can offer tailored payment options and incentives based on a traveler’s preferences, spending habits, and loyalty program status. This includes targeted promotions and discounts, further strengthening customer engagement and loyalty.</p> <p> </p> <h3>Conclusion</h3> <p>The big picture of digital identity in travel is one of transformation, convenience, and security. From personalized offers to streamlined boarding procedures, enhanced immigration processes, document checks, and payments, digital identity is revolutionizing the way we travel and puts the customer in control.</p> <p>We can foresee a time when airline systems dedicated to customer profiles and preferences, and the personalization of offers, will take more room than the traditional transactional systems. Digital identity is closely coupled to the new era of customer centricity in air travel.</p> <p>As technology continues to evolve, the possibilities for digital identity in the travel industry are limitless. Embracing these advancements will lead to a future where travel becomes more seamless, personalized, and enjoyable for travelers around the world.</p> <p> </p> <hr /> <p>Article by Eric Leopold</p> <p><a href="#_ftnref1" name="_ftn1">[1]</a> Thales <a href="https://www.thalesgroup.com/en/markets/digital-identity-and-security/government/eborder/biometrics-and-passenger-experience">https://www.thalesgroup.com/en/markets/digital-identity-and-security/government/eborder/biometrics-and-passenger-experience</a></p> <p><a href="#_ftnref2" name="_ftn2">[2]</a> NEC <a href="https://www.necam.com/AdvancedRecognitionSystems/aviation/">https://www.necam.com/AdvancedRecognitionSystems/aviation/</a></p> <p><a href="#_ftnref3" name="_ftn3">[3]</a> SITA <a href="https://www.sita.aero/solutions/sita-at-airports/sita-passenger-processing/sita-smart-path/">https://www.sita.aero/solutions/sita-at-airports/sita-passenger-processing/sita-smart-path/</a></p> <p><a href="#_ftnref4" name="_ftn4">[4]</a> Vision Box <a href="https://www.vision-box.com/solutions/travel-and-border-control/airports-and-airlines">https://www.vision-box.com/solutions/travel-and-border-control/airports-and-airlines</a></p> <p><a href="#_ftnref5" name="_ftn5">[5]</a> Visit Japan <a href="https://www.vjw.digital.go.jp/main/#/vjwplo001">https://www.vjw.digital.go.jp/main/#/vjwplo001</a></p> <p><a href="#_ftnref6" name="_ftn6">[6]</a> Travizory <a href="https://www.travizory.com/">https://www.travizory.com/</a></p> <p><a href="#_ftnref7" name="_ftn7">[7]</a> IATA <a href="https://www.iata.org/en/programs/passenger/one-id/">https://www.iata.org/en/programs/passenger/one-id/</a></p> <p><a href="#_ftnref8" name="_ftn8">[8]</a> Neoke <a href="https://www.neoke.com/">https://www.neoke.com/</a></p> <p> </p> </article> <article id="post-21683" class="et_pb_post post-21683 post type-post status-publish format-standard has-post-thumbnail hentry category-airlines category-blog tag-aviation tag-covid tag-pandemic tag-recovey"> <a class="entry-featured-image-url" href="https://worldaviationfestival.com/blog/airlines/have-consumers-now-fully-regained-confidence-in-air-travel/"> <img data-src="https://worldaviationfestival.com/wp-content/uploads/2023/04/pandemic-1080x600.png" alt="Have consumers now fully regained confidence in air travel?" width="1080" height="675" data-srcset="https://worldaviationfestival.com/wp-content/uploads/2023/04/pandemic-1080x600.png 1080w, https://worldaviationfestival.com/wp-content/uploads/2023/04/pandemic-980x490.png 980w, https://worldaviationfestival.com/wp-content/uploads/2023/04/pandemic-480x240.png 480w" data-sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" src="data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==" class="lazyload" style="--smush-placeholder-width: 1080px; --smush-placeholder-aspect-ratio: 1080/675;" /><noscript><img src="https://worldaviationfestival.com/wp-content/uploads/2023/04/pandemic-1080x600.png" alt="Have consumers now fully regained confidence in air travel?" class="" width="1080" height="675" srcset="https://worldaviationfestival.com/wp-content/uploads/2023/04/pandemic-1080x600.png 1080w, https://worldaviationfestival.com/wp-content/uploads/2023/04/pandemic-980x490.png 980w, https://worldaviationfestival.com/wp-content/uploads/2023/04/pandemic-480x240.png 480w" sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" /></noscript> </a> <h2 class="entry-title"><a href="https://worldaviationfestival.com/blog/airlines/have-consumers-now-fully-regained-confidence-in-air-travel/">Have consumers now fully regained confidence in air travel?</a></h2> <p class="post-meta"> by <span class="author vcard"><a href="https://worldaviationfestival.com/author/ericthreedot/" title="Posts by Eric Leopold (Threedot)" rel="author">Eric Leopold (Threedot)</a></span> | <span class="published">Apr 11, 2023</span> | <a href="https://worldaviationfestival.com/category/blog/airlines/" rel="category tag">Airlines</a>, <a href="https://worldaviationfestival.com/category/blog/" rel="category tag">News</a></p><h1>Have consumers now fully regained confidence in air travel?</h1> <p> </p> <h3>What difference did one year make?</h3> <p>One year ago, I wrote an <a href="https://worldaviationfestival.com/blog/airlines/have-customers-regained-confidence-in-air-travel-yet/">article</a> with a similar headline about travel demand and confidence. The answer was “no”. We were two years into the pandemic. The COVID cases were at an all-time high with 3 million new cases per day. The borders were closed in Asian countries like China, Japan or Australia. But today the world map of COVID-related travel restrictions is mostly green for international travel, and the answer is probably “yes”.</p> <p> </p> <div id="attachment_21688" style="width: 1091px" class="wp-caption alignnone"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-21688" class="wp-image-21688 size-full lazyload" data-src="https://worldaviationfestival.com/wp-content/uploads/2023/04/Eric-article.png" alt="" width="1081" height="864" data-srcset="https://worldaviationfestival.com/wp-content/uploads/2023/04/Eric-article.png 1081w, https://worldaviationfestival.com/wp-content/uploads/2023/04/Eric-article-980x783.png 980w, https://worldaviationfestival.com/wp-content/uploads/2023/04/Eric-article-480x384.png 480w" data-sizes="auto, (min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1081px, 100vw" src="data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==" style="--smush-placeholder-width: 1081px; --smush-placeholder-aspect-ratio: 1081/864;" /><noscript><img loading="lazy" decoding="async" aria-describedby="caption-attachment-21688" class="wp-image-21688 size-full" src="https://worldaviationfestival.com/wp-content/uploads/2023/04/Eric-article.png" alt="" width="1081" height="864" srcset="https://worldaviationfestival.com/wp-content/uploads/2023/04/Eric-article.png 1081w, https://worldaviationfestival.com/wp-content/uploads/2023/04/Eric-article-980x783.png 980w, https://worldaviationfestival.com/wp-content/uploads/2023/04/Eric-article-480x384.png 480w" sizes="auto, (min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1081px, 100vw" /></noscript><p id="caption-attachment-21688" class="wp-caption-text">Map from United website powered by Smartvel</p></div> <p> </p> <p>In one year, the airline industry is heading back towards profits. Load factors and fares are high. All this despite other global issues, from alarming IPCC reports about global warming to on-going war in Ukraine to post-pandemic inflation causing a major bank run in the US and a major bank collapse in Switzerland.</p> <p>In one year, the restrictions of movement have accelerated digital transformation and remote work. While employees became familiar with video conferencing tools and companies have implemented more tolerant working policies for work-from-home, the trend seems to be coming back to office work.</p> <p>It is early to draw conclusion on the pandemic’s impact and legacy. While we start seeing the consequences of the pandemic on global finances, we have yet to see the consequences on mental health, related to stressful situations, to long COVID and to isolation. We may be out of the “pandemic phase” and entering the “consequences phase”.</p> <p> </p> <h3></h3> <h3>What did scenarios predict back in 2021?</h3> <p>When you see a “prediction” or a “likely scenario” you may be tempted to check back after the facts. For example, McKinsey (source: Webinar 27 May 2021) had the more likely scenario of 2021 called “virus recurrence, with muted recovery”. It showed a big drop – RPK<a href="#_ftn1" name="_ftnref1">[1]</a> going from 2.9 trillion in 2020 (-67% vs 2019) – with a slow recovery – RPK to 3.7 in 2021 (-57%) – then sharper recovery – RPK to 7.5 in 2022 (-12%) – and almost back to now this year – RPT at 8.4 (-3%).</p> <p>A CAPA survey of April 2021 showed that respondents expected a full recovery (vs 2019) in 2023 (for 35%), or already in 2022 (for 33%), or only in 2024 (for 24%) or even in 2025 and beyond for the most pessimistic (8%). The crowd was about right.</p> <p>According to IATA figures<a href="#_ftn2" name="_ftnref2">[2]</a>, in February 2023 RPK levels were still 15% below 2019, with domestic travel almost recovered at 3% below 2019 and international travel still 22% below 2019, mainly impacted by the Asia Pacific market. This year, 2023, should be the year of travel recovery from the COVID-19 pandemic.</p> <p>The main drivers of delay and difference in recovery have been the national policies in terms of vaccines, PCR tests and quarantines. The Western vaccine arguably had the biggest impact on protecting populations at risk, while many people handled immunity without vaccine. The virus mutations had minor effects on the vaccine performance and on the population.</p> <p> </p> <h3>What lessons have we learnt?</h3> <p>While the health side of the pandemic is under control, the disorganized or heterogeneous health policies remain a concern. WHO has the authority to define the pandemic, to publish recommendation and to monitor progress, but has limited or no impact on harmonizing travel restrictions. IATA has been very active on his front with equally limited success. Although the health situation is a scientific matter, the policies to deal with the crisis remain political decisions, more or less influenced by science.</p> <p> </p> <h3>What has changed in air travel after three years of pandemic?</h3> <p>At travel booking stage, all airlines now provide comprehensive health-related information. Before COVID, some countries already imposed travel requirements such as visas and vaccines (e.g. yellow fever), and airlines informed passengers accordingly. After COVID, the section on travel restrictions has augmented to include a COVID status. Over time, the health and immigration information will be automated in real-time and tracked for each trip and traveler.</p> <p>There has been a huge debate about the cleanliness of the cabin air at the beginning of the pandemic. We’ve not been wearing a mask for a few months on airplanes and the debate on virus spread through the air of the cabin seems to be over. Yet we’ve missed the opportunity to turn the airplane into a virus detection lab, using for example waste waters analysis to detect virus spread across geographies.</p> <p>The massive cancellations, followed by the massive issuance of vouchers and the late refunds, have focused the attention on the complexity of the airline ticketing change processes. Despite marginal improvements, the simplification is still work in progress. The vision of having one order per traveler or group of travelers, that can be automatically refunded and changed in full self-service mode, with funds credited instantly into a wallet, remains mostly at design stage.</p> <p> </p> <h3>What is the new normal in air travel post-pandemic?</h3> <p>I must admit that I saw an opportunity in 2020 for a “new normal” in travel, which did not really happen. To summarize the new normal in 2023:</p> <ul> <li>Large online workshops have replaced business trips in many cases</li> <li>Large events like conferences are still well attended, as people still value face-to-face unscheduled or random interactions</li> <li>Corporates have introduced CO2 budgets to reduce the number of trips and raise awareness on the carbon footprint of their businesses</li> <li>Flights using SAF are still a very small fraction of the business but growing</li> <li>Airlines provide detailed information on travel restrictions and make more flights refundable and modifiable</li> <li>The overall change and refund process remains complex, and the voucher management pretty cumbersome</li> </ul> <p> </p> <h3>What else do we need to watch?</h3> <p>The IATA vision paper of 2035<a href="#_ftn3" name="_ftnref3">[3]</a>, published in 2018, outlined the key risks facing the air travel industry, including… the pandemic. Interestingly a major broke out the following year. I’m not aware of an updated version of this paper but in the meantime, I can share my personal view on the latest risks impacting travel:</p> <ul> <li>Pandemic: COVID may not be around, but new viruses may develop every day.</li> <li>Health: consequences on mental health caused by the stress and isolation, will impact airline staff and travelers</li> <li>War: the civil war in Syria has been going for 12 years, the invasion of Ukraine is still live, China runs military exercises around Taiwan, and more, will impact destinations and routes</li> <li>Unrest: in many countries and at various levels, from Iran to France, will impact destinations and routes</li> <li>Finance: Major banks – Silicon Valley Bank and Credit Suisse – collapses and financial uncertainty, despite the post Global Financial Crisis series of measures, will impact airline finances and travel budgets</li> <li>Environment: Global warming is now on top of the agenda of most airlines, the pressure has shifted from demonstrations and medias to corporates introducing CO2 budgets for travel, will impact airline operations and costs.</li> <li>Cybersecurity: Still a high risk on the digital agenda, will impact airline data</li> <li>Safety: MH370 is still on everyone’s mind, almost 10 years later, there is still no global tracking system, despite numerous ADS-B ground solutions.</li> </ul> <p>In conclusion, while travel demand shows that consumers have regained confidence in travel, the “new normal” post-COVID is not there yet, and we still need to de-risk many topics if we want a more sustainable travel industry.</p> <p><a href="#_ftnref1" name="_ftn1">[1]</a> RPK = Revenue passenger kilometer</p> <p><a href="#_ftnref2" name="_ftn2">[2]</a> IATA Economics: <a href="https://www.iata.org/en/publications/economics/">https://www.iata.org/en/publications/economics/</a></p> <p><a href="#_ftnref3" name="_ftn3">[3]</a> IATA vision paper : <a href="https://www.iata.org/contentassets/086e8361b2f4423e88166845afdd2f03/iata-future-airline-industry.pdf">https://www.iata.org/contentassets/086e8361b2f4423e88166845afdd2f03/iata-future-airline-industry.pdf</a></p> <p> </p> </article> <article id="post-18866" class="et_pb_post post-18866 post type-post status-publish format-standard has-post-thumbnail hentry category-airlines category-airports category-digital-transformation category-blog category-travel-technology tag-airports tag-sustainability tag-transition tag-travel-tech"> <a class="entry-featured-image-url" href="https://worldaviationfestival.com/blog/airlines/is-this-summers-baggage-crisis-an-innovation-opportunity/"> <img data-src="https://worldaviationfestival.com/wp-content/uploads/2022/08/Is-this-summers-baggage-crisis-an-innovation-opportunity-1080x675.png?crop=1" alt="Is this summer’s baggage crisis an innovation opportunity?" width="1080" height="675" data-srcset="https://worldaviationfestival.com/wp-content/uploads/2022/08/Is-this-summers-baggage-crisis-an-innovation-opportunity-1080x675.png?crop=1 1080w, https://worldaviationfestival.com/wp-content/uploads/2022/08/Is-this-summers-baggage-crisis-an-innovation-opportunity-980x653.png 980w, https://worldaviationfestival.com/wp-content/uploads/2022/08/Is-this-summers-baggage-crisis-an-innovation-opportunity-480x320.png 480w" data-sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" src="data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==" class="lazyload" style="--smush-placeholder-width: 1080px; --smush-placeholder-aspect-ratio: 1080/675;" /><noscript><img src="https://worldaviationfestival.com/wp-content/uploads/2022/08/Is-this-summers-baggage-crisis-an-innovation-opportunity-1080x675.png?crop=1" alt="Is this summer’s baggage crisis an innovation opportunity?" class="" width="1080" height="675" srcset="https://worldaviationfestival.com/wp-content/uploads/2022/08/Is-this-summers-baggage-crisis-an-innovation-opportunity-1080x675.png?crop=1 1080w, https://worldaviationfestival.com/wp-content/uploads/2022/08/Is-this-summers-baggage-crisis-an-innovation-opportunity-980x653.png 980w, https://worldaviationfestival.com/wp-content/uploads/2022/08/Is-this-summers-baggage-crisis-an-innovation-opportunity-480x320.png 480w" sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" /></noscript> </a> <h2 class="entry-title"><a href="https://worldaviationfestival.com/blog/airlines/is-this-summers-baggage-crisis-an-innovation-opportunity/">Is this summer’s baggage crisis an innovation opportunity?</a></h2> <p class="post-meta"> by <span class="author vcard"><a href="https://worldaviationfestival.com/author/ericthreedot/" title="Posts by Eric Leopold (Threedot)" rel="author">Eric Leopold (Threedot)</a></span> | <span class="published">Aug 31, 2022</span> | <a href="https://worldaviationfestival.com/category/blog/airlines/" rel="category tag">Airlines</a>, <a href="https://worldaviationfestival.com/category/blog/airports/" rel="category tag">Airports</a>, <a href="https://worldaviationfestival.com/category/blog/digital-transformation/" rel="category tag">Digital Transformation</a>, <a href="https://worldaviationfestival.com/category/blog/" rel="category tag">News</a>, <a href="https://worldaviationfestival.com/category/blog/travel-technology/" rel="category tag">Travel Tech</a></p><h1>Is this summer’s baggage crisis an innovation opportunity?</h1> <p> </p> <p>BBC News published an <a href="https://www.bbc.com/news/business-62446937">article</a> this summer about the “tech aiming to prevent lost airline luggage”. It was certainly timely given the horror stories at some European airports over the summer, both in mishandled bags and in customer service. The article quotes the SITA report that highlighted 19m mishandled bags and 1.3m lost bags in 2021. We are in 2022, and you still hesitate to check a bag for your next flight? You’re not alone 😉</p> <p>Have you noticed that new warehouses, like Amazon’s, or new factories, like Tesla’s, are fully automated, also like data centres? What about bag handling at airports today, is it fully automated? No, unfortunately bags are still loaded <a href="https://www.independent.co.uk/travel/news-and-advice/pilots-cleaning-planes-loading-bags-staff-shortages-b2146850.html">manually</a> in aircraft today, like 50 years ago… Until we go to “dark airports” and implement automation in bag handling, what options do travelers have when they travel with bags? This paper explores the root causes of the chaotic situation, the alternatives in the short term to avoid issues and in the longer term to fix the problem.</p> <p> </p> <h3><strong>Root causes</strong></h3> <p>Overall the baggage operations for airlines is roughly a zero sum game. The cost of carrying 3 billion bags per year is about <a href="https://www.internationalairportreview.com/article/17096/baggage-handling-a-more-efficient-process/">$30bn</a>, or $10 per bag. This cost is roughly offset by ancillary bag fees also at around <a href="https://ideaworkscompany.com/wp-content/uploads/2020/04/Press-Release-136-Global-Baggage.pdf">$30bn</a>. The mishandled bags represent roughly an extra $3bn cost. The baggage operation processes are very complex and manual. Large airports use sophisticated sortation systems running on kilometres of belts. Bags are loaded and offloaded from aircraft manually, except for large aircraft with containers.</p> <p>In this spring in Europe, as the Omicron wave was fading, consumers regained <a href="https://worldaviationfestival.com/blog/airlines/have-customers-regained-confidence-in-air-travel-yet/">confidence</a>, air traffic resumed and reached almost the levels of 2019 with load factors of <a href="https://www.iata.org/en/pressroom/2022-releases/2022-08-04-01/">86%</a>. The airport and bag handling staff, who were furloughed during 2020 and 2021, did not return fast enough in their jobs. This shortage was worsened by the Coronavirus still being active and putting staff on sick leave. Overall there were not enough hands for the manual bag processes.</p> <p> </p> <h3><strong>Can tracking bags with electronic tags help?</strong></h3> <p>The bag tags currently provided by airlines are equipped with barcodes which are read only at certain points in the end-to-end process. This means that airlines and airports have a limited view of where the bags are. Adding an electronic tag, either provided by the airline or included by the travelers themselves (like the Apple AirTag), may help locate the baggage beyond the existing tracking points at bag drop and before the carousel.</p> <p>Tracking the bags may indeed help the travelers to find out where their bags are, for example if a bag is stuck in a warehouse waiting to be picked up by a delivery team. As such it can accelerate the retrieval of the bag and save time looking around 10,000 bags for a needle in a haystack. But these tags don’t make bags travel faster, don’t add hands to load bags in aircraft and don’t deliver bags at home.</p> <p> </p> <h3><strong>Can one remove the baggage bottleneck at the airport?</strong></h3> <p>One approach to tackle the baggage operation issue is to remove some baggage from the sortation systems, or at least at the peak times. This can be done at departure by dropping the bags off-airport or by picking up bags from home and processing them in parallel. At arrival, the airline may offer a home or hotel delivery of the bags.</p> <p>There are live solutions that exist today, like Airportr quoted in the BBC article. A baggage agent comes to the traveler’s home, seals the bag and loads it into an electric van. The bag is carried safely to the destination. Due to current regulations, the bags travel in the same aircraft as the customers, but in time we can imagine that bags can travel independently. They could also be picked up by drones that can lift 20 kilo payloads.</p> <p> </p> <h3><strong>Is there an alternative to bag sortation systems and manual loading?</strong></h3> <p>The air travel industry still handles every bag individually and manually. Conversely the maritime shipping industry went through a containerization transformation. The maritime organizations got together and set standards for 20-feet and 40-feet containers. Over the past 50 years, lengthy processes were removed and replaced with container ships.</p> <p>This transformation inspired André Safir with the Squarcle project, whereby travelers drop their bags directly into containerized lockers. There is no need for bag sortation and no manual intervention. Such radical invention has the potential to transform the baggage operations, reducing costs and mishandling, but also avoided future congestions and chaos in case of rapid changes in air traffic.</p> <p> </p> <h3><strong>Conclusion</strong></h3> <p>While bag operations have done a tremendous job at delivering billions of bags per year, they represent relatively high costs and a low resilience to irregular operations. The air travel industry has a major opportunity to learn from this summer’s Europe crisis and to explore new ways of handling bags – more automated, more cost-effective, most resilient and ideally more sustainable.</p> </article> <article id="post-18498" class="et_pb_post post-18498 post type-post status-publish format-standard has-post-thumbnail hentry category-airlines category-digital-transformation category-retailing category-travel-technology tag-aviation tag-ndc tag-orders tag-transition"> <a class="entry-featured-image-url" href="https://worldaviationfestival.com/blog/airlines/why-is-ndc-taking-so-long/"> <img data-src="https://worldaviationfestival.com/wp-content/uploads/2022/07/Why-is-NDC-taking-so-long-1080x675.jpg?crop=1" alt="Why is NDC taking so long?" width="1080" height="675" data-srcset="https://worldaviationfestival.com/wp-content/uploads/2022/07/Why-is-NDC-taking-so-long-1080x675.jpg?crop=1 1080w, https://worldaviationfestival.com/wp-content/uploads/2022/07/Why-is-NDC-taking-so-long-980x653.jpg 980w, https://worldaviationfestival.com/wp-content/uploads/2022/07/Why-is-NDC-taking-so-long-480x320.jpg 480w" data-sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" src="data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==" class="lazyload" style="--smush-placeholder-width: 1080px; --smush-placeholder-aspect-ratio: 1080/675;" /><noscript><img src="https://worldaviationfestival.com/wp-content/uploads/2022/07/Why-is-NDC-taking-so-long-1080x675.jpg?crop=1" alt="Why is NDC taking so long?" class="" width="1080" height="675" srcset="https://worldaviationfestival.com/wp-content/uploads/2022/07/Why-is-NDC-taking-so-long-1080x675.jpg?crop=1 1080w, https://worldaviationfestival.com/wp-content/uploads/2022/07/Why-is-NDC-taking-so-long-980x653.jpg 980w, https://worldaviationfestival.com/wp-content/uploads/2022/07/Why-is-NDC-taking-so-long-480x320.jpg 480w" sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" /></noscript> </a> <h2 class="entry-title"><a href="https://worldaviationfestival.com/blog/airlines/why-is-ndc-taking-so-long/">Why is NDC taking so long?</a></h2> <p class="post-meta"> by <span class="author vcard"><a href="https://worldaviationfestival.com/author/ericthreedot/" title="Posts by Eric Leopold (Threedot)" rel="author">Eric Leopold (Threedot)</a></span> | <span class="published">Jul 5, 2022</span> | <a href="https://worldaviationfestival.com/category/blog/airlines/" rel="category tag">Airlines</a>, <a href="https://worldaviationfestival.com/category/blog/digital-transformation/" rel="category tag">Digital Transformation</a>, <a href="https://worldaviationfestival.com/category/blog/retailing/" rel="category tag">Retailing</a>, <a href="https://worldaviationfestival.com/category/blog/travel-technology/" rel="category tag">Travel Tech</a></p><p>I keep hearing the same concerns about the perceived speed of the transition to airline digital retailing, whether I speak with airlines, sellers and travel tech companies who have embarked in the transition, or with other players who have chosen to wait and see.</p> <p>Understanding the good and bad reasons for the lack of speed (compared to expectations) is helpful to find ways to accelerate the transition. It will be even more valuable to plan for the next transition, towards order management.</p> <p> </p> <h2><strong>What are the expectations?</strong></h2> <p> </p> <p>Having one airline implementing one distribution API is fast. Air Canada had a distribution API before NDC started. easyJet had an API connected with one GDS before NDC started. An airline group called Open Axis even had a standard for API distribution before NDC started. If this is all we know, NDC should be implemented globally in a couple of years, right?</p> <p>On the other hand, airlines, travel agents and GDSs have been working hard for the past 50 years to build a global interconnected platform allowing any customer to find in real-time the best itinerary and best fare to get from A to B anywhere in the world. Even after 50 years of hard work, using pre-internet technologies, the platform does not support the latest innovations in dynamic pricing and ancillaries. Upgrading this entire platform, with new processes and technologies, should take at least 50 years, right?</p> <p>A reasonable expectation lies probably in the middle. Implementing NDC worldwide has clearly not taken 2-3 years (this was only the time necessary to get the US DOT approval). But hopefully upgrading the distribution infrastructure of the air travel industry won’t take 50 years. For a program launched in 2011, the transition will be completed for the first players in 2025 and probably for the rest of the industry by 2030.</p> <p> </p> <h2><strong>What are the key remaining challenges for implementation?</strong></h2> <p> <br /> The initial challenges were typical of a major digital transformation program, except for contractual and business models issues, which are specific to the status of this industry. Challenges included: awareness, business case, funding, skilled resources, contractual restrictions, technical solution, innovative partners, incentives, on-boarding, and differentiated content.</p> <p><strong>Awareness</strong>: I’d be curious to see the results of an awareness survey, showing how many travel distribution professionals have heard about NDC and can define it.</p> <p><strong>Business case</strong>: While many airlines have figured out a business case, including revenue generation from ancillaries, cost reductions and enhanced customer experience, there are still many players still scratching their heads. Indeed, selling the same product, to the same customer, via the same channel, won’t create value even with a new technology.</p> <p><strong>Funding</strong>: Any project requiring investment in the current environment is a challenge. The pandemic crisis has cut the cash resources for most airlines and travel agents. Despite the crisis, some airlines and travel agents keep investing because the new distribution channels, enabled by NDC, are more profitable.</p> <p><strong>Skilled resources</strong>: The transition to digital retailing first required a mindset shift from the management. Then the training or recruitment of staff able to manage API distribution and create new offers across multiple distribution channels. Last but not least, sales teams briefed and equipped to engage the travel agencies about partnership and value creation.</p> <p><strong>Contractual restrictions</strong>: Airlines and travel agents have signed distribution contracts with GDSs, which may contain restrictions or incentives preventing the implementation of alternative channels. Although the European Commission recently closed their <a href="https://ec.europa.eu/commission/presscorner/detail/en/IP_18_6538">2018 GDS investigation</a> about “possible restrictions in competition in the market for airline ticket distribution services”, such restrictions may remain a challenge today.</p> <p><strong>Technical solution</strong>: With the most advanced airlines having shifted 50% of their indirect bookings on NDC, the technical questions (scalability, look-to-book, polling, caching, etc.) are identified and discussed within technical industry groups. There is still a lot of progress and improvement to be made, i.e. innovation opportunities.</p> <p><strong>Innovation partners</strong>: A key benefit of an open standard for air travel distribution is that it allows new entrants to enter the market, to innovate and partners with existing players. Today there are NDC API providers, NDC aggregators and other NDC service providers (post-booking, etc.).</p> <p><strong>Incentives</strong>: Airlines have designed various distribution strategies and travel agents have elaborated content sourcing strategies to take advantage of the new content and fares. The current transition shows a mix of incentives, ranging from carrots (commissions…) to sticks (surcharges…). After the transition, value creation should become the driver between partners.</p> <p><strong>On-boarding</strong>: Airlines who have built their “distribution platform” are on-boarding travel sellers, either directly or through aggregators. This process takes time and will accelerate over time.</p> <p><strong>Differentiated content</strong>: The purpose of NDC is to enable a new distribution channel, for airlines and travel agents, capable of supporting any kind of airline offers. This channel adds value to partners once content is differentiated, i.e. more than “airline code – origin-destination – date – fare”. Dynamic offers, where the product and the price are constructed dynamically, will leverage the channel and create even further value.</p> <p>There are more challenges ahead. They reflect the ambition of the modernization of air travel distribution, the opportunities for new services and new entrants, and the reasons underpinning the time the transition takes.</p> <p> </p> <h2><strong>What next?</strong></h2> <p> <br /> Although I wish the transition moved faster, the current pace is probably right. NDC was launched as something that will and must happen, regardless of the timeline. Knowing that it would happen, the challenge was to make it happen as quickly as possible, but also as robustly as possible in case it lasts for another 50 years.</p> <p>The next phase of the transition is about <a href="https://worldaviationfestival.com/blog/airlines/5-questions-airlines-should-ask-about-their-transition-to-order-management/">order management</a>. The question is not “if” but “when”. The travel industry needs to accelerate the transition to order management if it wants to capture the full benefits of digital retailing. Or we may soon hear “Why is ONE Order taking so long?”.</p> <p> </p> <p> </p> </article> <article id="post-18436" class="et_pb_post post-18436 post type-post status-publish format-standard has-post-thumbnail hentry category-airlines category-digital-transformation category-blog category-retailing category-travel-technology tag-airlines tag-blockchain tag-metaverse tag-travel-tech tag-web3"> <a class="entry-featured-image-url" href="https://worldaviationfestival.com/blog/airlines/what-will-air-travel-look-like-in-the-metaverse/"> <img data-src="https://worldaviationfestival.com/wp-content/uploads/2022/06/What-will-air-travel-look-like-in-the-metaverse-1080x675.jpg?crop=1" alt="What will air travel look like in the metaverse?" width="1080" height="675" data-srcset="https://worldaviationfestival.com/wp-content/uploads/2022/06/What-will-air-travel-look-like-in-the-metaverse-1080x675.jpg?crop=1 1080w, https://worldaviationfestival.com/wp-content/uploads/2022/06/What-will-air-travel-look-like-in-the-metaverse-980x653.jpg 980w, https://worldaviationfestival.com/wp-content/uploads/2022/06/What-will-air-travel-look-like-in-the-metaverse-480x320.jpg 480w" data-sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" src="data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==" class="lazyload" style="--smush-placeholder-width: 1080px; --smush-placeholder-aspect-ratio: 1080/675;" /><noscript><img src="https://worldaviationfestival.com/wp-content/uploads/2022/06/What-will-air-travel-look-like-in-the-metaverse-1080x675.jpg?crop=1" alt="What will air travel look like in the metaverse?" class="" width="1080" height="675" srcset="https://worldaviationfestival.com/wp-content/uploads/2022/06/What-will-air-travel-look-like-in-the-metaverse-1080x675.jpg?crop=1 1080w, https://worldaviationfestival.com/wp-content/uploads/2022/06/What-will-air-travel-look-like-in-the-metaverse-980x653.jpg 980w, https://worldaviationfestival.com/wp-content/uploads/2022/06/What-will-air-travel-look-like-in-the-metaverse-480x320.jpg 480w" sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" /></noscript> </a> <h2 class="entry-title"><a href="https://worldaviationfestival.com/blog/airlines/what-will-air-travel-look-like-in-the-metaverse/">What will air travel look like in the metaverse?</a></h2> <p class="post-meta"> by <span class="author vcard"><a href="https://worldaviationfestival.com/author/ericthreedot/" title="Posts by Eric Leopold (Threedot)" rel="author">Eric Leopold (Threedot)</a></span> | <span class="published">Jun 14, 2022</span> | <a href="https://worldaviationfestival.com/category/blog/airlines/" rel="category tag">Airlines</a>, <a href="https://worldaviationfestival.com/category/blog/digital-transformation/" rel="category tag">Digital Transformation</a>, <a href="https://worldaviationfestival.com/category/blog/" rel="category tag">News</a>, <a href="https://worldaviationfestival.com/category/blog/retailing/" rel="category tag">Retailing</a>, <a href="https://worldaviationfestival.com/category/blog/travel-technology/" rel="category tag">Travel Tech</a></p><p>In a famous interview in 1995, Bill Gates explained the Internet to Dave Letterman, the host of a TV show. Letterman argued that he could listen to the news on the radio and wasn’t sure why would someone need the Internet. Today, we can listen to the radio on the Internet.</p> <p>As the metaverse is getting a lot of attention, including in a recent <a href="https://worldaviationfestival.com/blog/airlines/aviation-tech-innovation-2022/">article</a> by Johnny Thorsen, many are wondering if it’s another technology looking for problems to solve, if it’s going to be more successful than <a href="https://slate.com/technology/2022/02/second-life-metaverse-facebook-comparisons.html">Second Life</a> (the first attempt at a virtual world) and if it may have an impact on air travel (you can’t fly virtually, can you?).</p> <p>Let’s understand first what the metaverse entails then let’s have a look into the current trials and a longer look into the future.</p> <p> </p> <h2>What is the metaverse? How does it relate to Web3?</h2> <p>My personal understanding of the metaverse is a term that covers computer-generated virtual worlds and the tools to navigate them. As such it is more than AR/VR tools, it is really a graphical interface layer on top of the internet, pioneered by developers of video games such as Minecraft and Fortnite.</p> <p>In a related space, Web3 is the blockchain-based iteration of the Web, which was built originally on the internet. If you consider blockchain as a secured and decentralized evolution of the internet, designed to handle digital assets or tokens, your navigation layer is called Web3.</p> <p>If you mix the two concepts – metaverse and Web3, you can visit a virtual world and handle digital assets in this virtual world. By digital assets I mean virtual properties, virtual currencies and other virtual goodies. Following this simplistic presentation of the new concepts, where is the link to physical travel and tourism?</p> <p> </p> <h2>Current air travel initiatives with the metaverse</h2> <p>The most recent example of current initiative is the airline Vueling that <a href="https://www.breakingtravelnews.com/news/article/vueling-becomes-the-first-airline-to-sell-flights-in-the-metaverse/">announced</a> testing the metaverse to support customers will trip planning and to sell (real) tickets. They partnered with NextEarth, a platform in the metaverse, and Iomob, a mobility platform helping with the integration.</p> <p>Another example is Qatar Airways <a href="https://simpleflying.com/qatar-airways-metaverse-virtual-cabin-crew/">presenting</a> a virtual cabin crew, inspired by the avatars in the virtual world. This initiative focuses on giving the customers a taste of the inflight experience.</p> <p>More airlines are exploring the technology based on their priorities: trip planning, product review, etc. Looking at the current initiatives gives us a hint to the future: the metaverse will be a new sales channel for travel and tourism, including air travel – like the internet enabled 25 years ago online sales, and 10 years later mobile phones enable mobile sales. Get ready for “meta sales”!</p> <p> </p> <h2>Looking into the future</h2> <p>The future of “meta sales” is two-fold: 1) reaching customers where they are and 2) showing the product to the customers.</p> <p>As hundreds of millions of customers spend time in the virtual worlds they will come across people and brands, including travel and tourism brands.</p> <p>In the case of a virtual world that represents the real world – like a digital twin of our world, think Google maps or Google Earth – the navigation in this world will lead to the digital twin of a hotel or of an airport. Airlines may want to offer a visit of their aircraft.</p> <p> </p> <h2>Next steps</h2> <p>It is difficult to predict how long it will take before we feel that it is normal to pay a virtual visit to a hotel and to an airline before making a purchase, like it is normal today to visit their website.</p> <p>This exploration of the metaverse may seem to be a stretch as some airlines still need to fix the basic features of their mobile app. History shows us that new technologies don’t wait for everyone to master the old ones.</p> <p>Most people and companies will probably adopt a “wait & see” attitude, while watching the pioneers who experiment and commenting from the side lines. As we’ve seen above, some players have already adopted the “test & learn” attitude. Indeed, the best way to predict the future is to build it.</p> </article> <article id="post-18349" class="et_pb_post post-18349 post type-post status-publish format-standard has-post-thumbnail hentry category-airlines category-digital-transformation category-retailing tag-airlines tag-distribution tag-orders tag-transition tag-travel-retailing"> <a class="entry-featured-image-url" href="https://worldaviationfestival.com/blog/airlines/5-questions-airlines-should-ask-about-their-transition-to-order-management/"> <img data-src="https://worldaviationfestival.com/wp-content/uploads/2022/05/5-questions-airlines-should-ask-about-their-transition-to-Order-management-1080x675.jpg?crop=1" alt="5 questions airlines should ask about their transition to Order management" width="1080" height="675" data-srcset="https://worldaviationfestival.com/wp-content/uploads/2022/05/5-questions-airlines-should-ask-about-their-transition-to-Order-management-1080x675.jpg?crop=1 1080w, https://worldaviationfestival.com/wp-content/uploads/2022/05/5-questions-airlines-should-ask-about-their-transition-to-Order-management-980x653.jpg 980w, https://worldaviationfestival.com/wp-content/uploads/2022/05/5-questions-airlines-should-ask-about-their-transition-to-Order-management-480x320.jpg 480w" data-sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" src="data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==" class="lazyload" style="--smush-placeholder-width: 1080px; --smush-placeholder-aspect-ratio: 1080/675;" /><noscript><img src="https://worldaviationfestival.com/wp-content/uploads/2022/05/5-questions-airlines-should-ask-about-their-transition-to-Order-management-1080x675.jpg?crop=1" alt="5 questions airlines should ask about their transition to Order management" class="" width="1080" height="675" srcset="https://worldaviationfestival.com/wp-content/uploads/2022/05/5-questions-airlines-should-ask-about-their-transition-to-Order-management-1080x675.jpg?crop=1 1080w, https://worldaviationfestival.com/wp-content/uploads/2022/05/5-questions-airlines-should-ask-about-their-transition-to-Order-management-980x653.jpg 980w, https://worldaviationfestival.com/wp-content/uploads/2022/05/5-questions-airlines-should-ask-about-their-transition-to-Order-management-480x320.jpg 480w" sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" /></noscript> </a> <h2 class="entry-title"><a href="https://worldaviationfestival.com/blog/airlines/5-questions-airlines-should-ask-about-their-transition-to-order-management/">5 questions airlines should ask about their transition to Order management</a></h2> <p class="post-meta"> by <span class="author vcard"><a href="https://worldaviationfestival.com/author/ericthreedot/" title="Posts by Eric Leopold (Threedot)" rel="author">Eric Leopold (Threedot)</a></span> | <span class="published">May 10, 2022</span> | <a href="https://worldaviationfestival.com/category/blog/airlines/" rel="category tag">Airlines</a>, <a href="https://worldaviationfestival.com/category/blog/digital-transformation/" rel="category tag">Digital Transformation</a>, <a href="https://worldaviationfestival.com/category/blog/retailing/" rel="category tag">Retailing</a></p><p>When low-cost carriers designed their business models to simplify their business and reduce costs, they went ticketless. But why do legacy network carriers need tickets (now e-tickets) after all? Will they still need to issue tickets to customers who accepted their NDC offers? What are the steps for airlines to move to Order management?</p> <p> </p> <h2><strong>Would we invent airline tickets today?</strong></h2> <p>If you ask the question “what is an airline ticket, and can airline live without tickets?” pundits may argue that it is critical to many airline processes (which is correct), and it makes no sense to get rid of tickets. But if you ask the question differently “if we invented network airlines today, would we invent tickets?”, the answer will certainly be different.</p> <p>In today’s world, network carriers are selling through travel agencies and through airline partners, they are operating at shared airports, and they are doing business like retailers, making offers to customers and delivering their orders. Indeed, they don’t need to issue tickets. Being ticketless and moving to orders is a goal shared by other modes of transport, like <a href="https://worldaviationfestival.com/blog/airlines/5-points-to-watch-for-business-travelers-who-pick-rail-as-an-alternative-to-air-travel/">railways</a>.</p> <p>In September 2016 IATA published a report that studied the transition to order management, meaning retiring tickets from all airline processes and replacing them by orders. The report was drafted by <a href="https://www.travelinmotion.ch/">Travel in Motion</a>, on behalf of IATA’s airline <a href="https://www.iata.org/en/programs/airline-distribution/retailing/">distribution</a> standards team. What are the key questions for the transition?</p> <p> </p> <h3><strong>1 – Cost benefit analysis</strong></h3> <p>The customers benefit from order management because they can easily create their own order and modify it before or during the trip. The airlines benefit from the increase in ancillary revenue, including for interline flights, and from the reduction in costs related to customer servicing and IT systems. Of course each airline has a different mix of customers and product offering, which will influence their analysis of the costs and benefits of order management.</p> <p> </p> <h3><strong>2 – Impact on stakeholders</strong></h3> <p>The report explores the vast impact on stakeholders of such a transition. Within each airline, customer service will access orders, ground and inflight staff will deliver orders, revenue accounting will process and settle orders, reservations will create and modify orders, digital channels will display orders, sales teams will notice the satisfaction of customers, revenue management will create offers than can be fulfilled in orders. Outside of airlines, interline partners, travel sellers, ground handlers, and payment providers will handle orders and benefit from them.</p> <p>The PNRgov message containing Advanced Passenger Information, sent by airlines to governments prior the flights, will be based on Orders instead of PNRs.</p> <p> </p> <h3><strong>3 – End state Architecture</strong></h3> <p>The report recommends an architecture based on an “Offer and an Order management system” that support sales channels and rely on internal delivery and accounting systems. This architecture is free from any legacy record or message, such as PNR, E-ticket and EMD.</p> <p>The alternatives include the “encapsulate” option, where the legacy records and message are encapsulated into orders, and the “on-top” option, where the core functions remain in the PSS and the new management functions are built “on-top” of the PSS.</p> <p> </p> <h3><strong>4 – Approaches to transition</strong></h3> <p>The report recommends the “staged” approach, as opposed to the “shadow” or “big bang” approaches. Indeed the approach that takes place in phases or stages help minimize risks. The steps can be defined by channel or by product or by function, which progressively cutover from the PSS to the new Order Management System.</p> <p>Each airline may start the transition with a different configuration, either a PSS and a website, or already a merchandizing platform creating offers and an NDC API distributing offers. Each airline may have a different end state architecture in mind, which generates as many possible transition paths.</p> <p> </p> <h3><strong>5 – The right transition</strong></h3> <p>The report argues that different profiles of airlines may choose different paths, which find the best compromise for them. At a high-level, the three airline profiles are network airline, hybrid airline or low-cost airline, and within those profiles there are innovative or follower airlines. The decision criteria include cost/benefit, architecture, transition approach, impacts and risks.</p> <p> </p> <h3><strong>Conclusion</strong></h3> <p>In summary, the air travel industry has moved from asking “if” to “when” to “how” the transition will take place. In the “how”, the 5 questions to ask are: What are the costs and benefits? What is the impact on stakeholders? What is the end state architecture? What are the possible transition paths? Which transition is right for my airline?</p> <p>The airlines which will get this transition right will be the first to deliver a smoother travel experience to their customers.</p> </article> <article id="post-18172" class="et_pb_post post-18172 post type-post status-publish format-standard has-post-thumbnail hentry category-airlines category-digital-transformation category-retailing tag-airlines tag-business-travel tag-railways tag-travel-retailing"> <a class="entry-featured-image-url" href="https://worldaviationfestival.com/blog/airlines/5-points-to-watch-for-business-travelers-who-pick-rail-as-an-alternative-to-air-travel/"> <img data-src="https://worldaviationfestival.com/wp-content/uploads/2022/04/5-points-to-watch-for-business-travelers-who-pick-rail-as-an-alternative-to-air-travel-1080x675.png?crop=1" alt="5 points to watch for business travelers who pick rail as an alternative to air travel" width="1080" height="675" data-srcset="https://worldaviationfestival.com/wp-content/uploads/2022/04/5-points-to-watch-for-business-travelers-who-pick-rail-as-an-alternative-to-air-travel-1080x675.png?crop=1 1080w, https://worldaviationfestival.com/wp-content/uploads/2022/04/5-points-to-watch-for-business-travelers-who-pick-rail-as-an-alternative-to-air-travel-980x653.png 980w, https://worldaviationfestival.com/wp-content/uploads/2022/04/5-points-to-watch-for-business-travelers-who-pick-rail-as-an-alternative-to-air-travel-480x320.png 480w" data-sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" src="data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==" class="lazyload" style="--smush-placeholder-width: 1080px; --smush-placeholder-aspect-ratio: 1080/675;" /><noscript><img src="https://worldaviationfestival.com/wp-content/uploads/2022/04/5-points-to-watch-for-business-travelers-who-pick-rail-as-an-alternative-to-air-travel-1080x675.png?crop=1" alt="5 points to watch for business travelers who pick rail as an alternative to air travel" class="" width="1080" height="675" srcset="https://worldaviationfestival.com/wp-content/uploads/2022/04/5-points-to-watch-for-business-travelers-who-pick-rail-as-an-alternative-to-air-travel-1080x675.png?crop=1 1080w, https://worldaviationfestival.com/wp-content/uploads/2022/04/5-points-to-watch-for-business-travelers-who-pick-rail-as-an-alternative-to-air-travel-980x653.png 980w, https://worldaviationfestival.com/wp-content/uploads/2022/04/5-points-to-watch-for-business-travelers-who-pick-rail-as-an-alternative-to-air-travel-480x320.png 480w" sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" /></noscript> </a> <h2 class="entry-title"><a href="https://worldaviationfestival.com/blog/airlines/5-points-to-watch-for-business-travelers-who-pick-rail-as-an-alternative-to-air-travel/">5 points to watch for business travelers who pick rail as an alternative to air travel</a></h2> <p class="post-meta"> by <span class="author vcard"><a href="https://worldaviationfestival.com/author/ericthreedot/" title="Posts by Eric Leopold (Threedot)" rel="author">Eric Leopold (Threedot)</a></span> | <span class="published">Apr 12, 2022</span> | <a href="https://worldaviationfestival.com/category/blog/airlines/" rel="category tag">Airlines</a>, <a href="https://worldaviationfestival.com/category/blog/digital-transformation/" rel="category tag">Digital Transformation</a>, <a href="https://worldaviationfestival.com/category/blog/retailing/" rel="category tag">Retailing</a></p><p>While safety, on-time performance and cost effectiveness made air travel the preferred mode of transport for business travelers, the new priority is on sustainability and carbon emission levels, and air travel cannot compete with rail on this metric. As business travel is <a href="https://worldaviationfestival.com/blog/airlines/have-customers-regained-confidence-in-air-travel-yet/">coming back</a> after the pandemic, is rail ready for business travel?</p> <p>If we take a simple example of a trip from Geneva to London. By plane, the journey takes 1 hour and a half, produces about 100kg CO2 and costs about EUR 100. By rail, it takes about 8 hours with 1 stop (change station in Paris), produces about 5 kg CO2 and costs about EUR 200. Let’s assume the environment-conscious business travel favors low CO2 emissions compared to time and cost. What are the other points to watch when traveling by rail?</p> <p> </p> <h3><strong>The itinerary</strong></h3> <p> </p> <p>Air journeys including connection use “Minimum Connecting Time (MCT)” which build a contingency when connecting between two flights. Rail journeys don’t include MCT, i.e. an itinerary may show a 3-minute time between the scheduled arrival of the train and the departure of the next one, which is barely the time to change platform. This may work with Swiss railways that operate like clockworks, but not in other countries. Railways don’t track on-time performance of trains, in the same way FlightRadar tracks flights. Railways don’t check if passengers are on board and won’t wait for connecting passengers, unlike airlines. Railways don’t provide assistance in case of missed connections like IATA airlines do. These differences mean that it is safe to add contingency in the rail itinerary compared to what a website may suggest.</p> <p>Websites may not recommend the best itinerary if they don’t search the right websites. For example, I searched a solution to go from Bremen to Berlin in Germany. The Kiwi website recommended a combination of flights via Palma de Majorca on the way out and via London (7 hour self-transfer from Gatwick to Luton) on the way in, whereas the direct 3-hour train connection was available on DB website.</p> <p> </p> <h3><strong>The ticket</strong></h3> <p> </p> <p>Air travel has made electronic tickets and boarding passes a norm since 2010. For rail, electronic tickets exist at national levels but are not ubiquitous for international journeys. In a recent example I booked a train ride from Germany to France using the SNCF (French railways) website which required to collect the ticket for the DB (German railways) segment on a kiosk in a French train station! Not only the delivery of tickets should be completely electronic and mobile, but in case of changes the customer expectation is to receive the new document on the mobile phone.</p> <p>Intermediaries such as booking sites could help by bringing transparency. Unfortunately, websites like Omio don’t make it clear whether the ticket is booked directly with the rail operator or with Omio. The <a href="https://www.omio.com/terms-of-use">Terms of Use</a> say that it may vary. From a customer perspective it is important to know, at time of booking, who to deal with in case of changes or refunds. Especially if the change is due to the operator, the traveler needs to be notified and proposed with alternatives.</p> <p> </p> <h3><strong>The travel experience</strong></h3> <p> </p> <p>The longer the journey the more important is the travel experience, for the business travelers who’d like to be productive. Forward-facing seat, wifi on-board, plug for the mobile and laptop, spacious table are examples of attributes valued by a business traveler. Assuming that the train cabin is equipped, the traveler should be able to book the seat and access the attributes.</p> <p>While airlines have designed products for business travelers (calling it business class), railways still operate first and second, with sometimes very little difference. In another example, the fare difference between a first and second class on SNCF is 2 euros on a 52 euro fare, or 4%. The ticket can be modified with conditions in both options, bags are included and electric sockets are available in both options.</p> <p> </p> <h3><strong>The disruption management</strong></h3> <p> </p> <p>The longer the journey and the larger the number of connections, the higher the chances of missing the last train and ending up in a station closed for the night. While IATA airlines accommodation for the travelers who missed their connection, railways don’t have procedures in place. This is simply due to the nature of the contract with the carrier: the airline commits to carrying a customer at a specific time to a destination, whereas the railway simply allows the customer to occupy the car.</p> <p>In a recent example in Germany, after all trains to France were cancelled for the day, I ended in a German train station at night, with DB offering to sleep in a parked train. There are no alternatives by bus or no hotel accommodation. Although the cancelations are not the norm, the business traveler must know that in this case hotels will be full and the only option to stay warm for the night is the car reserved to refugees and homeless people.</p> <p> </p> <h3><strong>The refund process</strong></h3> <p> </p> <p>The airline refund process is not designed for simplicity and automation. The airline fare may not be refundable, but the government taxes and fees collected with the fare are not due in case of cancelled flight and should be returned to the customer. I’ve not seen yet an airline ticket which can clearly show the refund value in case of a customer decision to cancel or in case of airline decision. This would not only add transparency but also enable automation.</p> <p>In the case of railways, the complication is augmented by the lack of real-time traffic information. In my example above, SNCF didn’t know that their train stopped in Germany and I received a confirmation that the train had arrived in Paris, while obviously it was blocked in Germany. In the case of DB, the refund process requires to fill an <a href="https://www.bahn.com/en/booking-information/passenger-rights/passengers-rights-claim-form">online form</a> and send it by post. The claim request is not valid without a “confirmation of delay” which is not provided by the carrier, defeating the entire process. In this case, I eventually found a hotel room, at EUR 100 for the night, which is unlikely to be paid by DB or SNCF.</p> <p> </p> <h3><strong>Conclusion</strong></h3> <p>I love traveling by train and live in a country with excellent rail services, Switzerland. But rail is designed for mass local transit, not for internal business travel. This article looks at the gap between the modes of transport from a customer experience perspective, trying to use rail for business travel.</p> <p>It shows that there is a clear opportunity for rail operators to capture business travel demand in a time of sustainability-consciousness, until air travel deploys massive fuel alternatives becomes competitive from a CO2 emission perspective. Adapting rail for business travel means addressing ticketing, itineraries, customer experience, disruptions and refunds.</p> <p>If any rail operators have already implemented some of the changes suggested in this article, I encourage them to comment below and I will gladly feature them in a future article.</p> </article> <article id="post-18041" class="et_pb_post post-18041 post type-post status-publish format-standard has-post-thumbnail hentry category-airlines category-blog"> <a class="entry-featured-image-url" href="https://worldaviationfestival.com/blog/airlines/have-customers-regained-confidence-in-air-travel-yet/"> <img data-src="https://worldaviationfestival.com/wp-content/uploads/2022/03/Have-customers-regained-confidence-in-air-travel-1080x675.png?crop=1" alt="Have customers regained confidence in air travel yet?" width="1080" height="675" data-srcset="https://worldaviationfestival.com/wp-content/uploads/2022/03/Have-customers-regained-confidence-in-air-travel-1080x675.png?crop=1 1080w, https://worldaviationfestival.com/wp-content/uploads/2022/03/Have-customers-regained-confidence-in-air-travel-980x653.png 980w, https://worldaviationfestival.com/wp-content/uploads/2022/03/Have-customers-regained-confidence-in-air-travel-480x320.png 480w" data-sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" src="data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==" class="lazyload" style="--smush-placeholder-width: 1080px; --smush-placeholder-aspect-ratio: 1080/675;" /><noscript><img src="https://worldaviationfestival.com/wp-content/uploads/2022/03/Have-customers-regained-confidence-in-air-travel-1080x675.png?crop=1" alt="Have customers regained confidence in air travel yet?" class="" width="1080" height="675" srcset="https://worldaviationfestival.com/wp-content/uploads/2022/03/Have-customers-regained-confidence-in-air-travel-1080x675.png?crop=1 1080w, https://worldaviationfestival.com/wp-content/uploads/2022/03/Have-customers-regained-confidence-in-air-travel-980x653.png 980w, https://worldaviationfestival.com/wp-content/uploads/2022/03/Have-customers-regained-confidence-in-air-travel-480x320.png 480w" sizes="(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw" /></noscript> </a> <h2 class="entry-title"><a href="https://worldaviationfestival.com/blog/airlines/have-customers-regained-confidence-in-air-travel-yet/">Have customers regained confidence in air travel yet?</a></h2> <p class="post-meta"> by <span class="author vcard"><a href="https://worldaviationfestival.com/author/ericthreedot/" title="Posts by Eric Leopold (Threedot)" rel="author">Eric Leopold (Threedot)</a></span> | <span class="published">Mar 17, 2022</span> | <a href="https://worldaviationfestival.com/category/blog/airlines/" rel="category tag">Airlines</a>, <a href="https://worldaviationfestival.com/category/blog/" rel="category tag">News</a></p><p>Exactly two years ago, Switzerland, where I live, imposed a lockdown on the population, following the WHO announce of the COVID-19 pandemic. The sanitary measures and travel restrictions prevented people from traveling and damaged their confidence. Airlines introduced a series of measures and solutions dedicated to cope with the restrictions and resume flying during the pandemic, and to restore customer confidence, which I evaluated in my <a href="https://threedot.io/threedot-white-paper/">White Paper</a> (see proposals #4 and #6).</p> <p>Now that some countries, like Switzerland, have lifted all COVID-related travel restrictions, and although the pandemic is still going on in the world, it’s time to wonder what measures countries and airlines may keep or rescind. Let’s look at: demand forecast, information on travel restrictions, health declaration forms and travel health passes.</p> <p> </p> <h2>Demand forecast</h2> <p>The aggregation of signals of future demand have helped airlines plan for their future schedules and operations, in the absence of meaningful and relevant historical data. This kind of information will remain relevant because the uncertainty in the market is not only due to pandemics but to any shock impacting travel rights. The recent invasion of Ukraine, which caused the closure of airspaces, impacting routes and destinations, is an example of the shocks to expect.</p> <p>I expect the data sources and analytics related to travel demand to remain critical indicators for airlines as long as the world – and customer confidence – remains uncertain and volatile, which seems to be the new normal. Providers like 3Victors and PredictHQ will need to keep finding new data sources and enhancing their algorithms, as airlines will need to anticipate the impact of events on demand and bookings.</p> <p> </p> <h2>Information on travel restrictions</h2> <p>The conditions of entry in a country (per nationality, vaccinations, PCR test, quarantine, etc.) and the local business conditions (availability of public transport, hotels, restaurants, etc.) have become relevant factors in the travel planning. This information will remain relevant at least until the end of the pandemic, some time in 2023, and may be updated into 2024, even if it shows completely green picture of the world.</p> <p>I expect the tools collecting and displaying this information to remain effective post-COVID, as for example a local virus may break out which requires traveler warning. The tools may merge with other travel restriction information related either to immigration (visa) or to safety (political instability). Providers like Smartvel and Sherpa will need to keep updating and expanding their tools in the foreseeable future.</p> <p> </p> <h2>Health declaration forms</h2> <p>Border control authorities have augmented the list of criteria required to enter a country. The declaration forms now include questions about travel itineraries, health, residence, and other items. These forms, which used to be filled on paper on arrival, have become online, filled pre-travel, and ubiquitous during the pandemic. They represent a major source of information for countries. I don’t expect them to go away. However, they represent a significant additional burden for travelers, so I believe that tools will emerge that simplify the process for travelers, e.g. a personal travel wallet than can automatically fill any declaration form.</p> <p>Providers like Travizory and SITA still have a lot of work to do to help make travel planning seamless again. Connecting their forms with traveler apps may streamline the filling process, e.g. to upload COVID certificates or passport copies. There are also synergies with the following topic, travel health passes.</p> <p> </p> <h2>Travel health passes</h2> <p>The UN had a paper certificate of vaccination for years, the yellow booklet. COVID transformed it into an electronic document and digital process, connecting testing labs with travelers’ ID and border controls. Airlines propose various passes that travelers to show a valid proof of test or vaccination on the screen of the phone. Like travel restrictions, passes will remain applicable for destinations requiring vaccines and tests but will decrease as the restrictions are progressively lifted.</p> <p>While the implementation of travel health passes represented a major investment, I don’t expect the passes to remain in action, because they are designed for a use at scale. Countries requiring other vaccines (Yellow fever, etc.) may default back to the previous system of manual checks. Providers like VeriFLY and CommonPass will need to repurpose their knowhow in terms of customer ID and health verifications towards generic solutions that can be used by travelers beyond COVID.</p> <p> </p> <h2>Conclusion</h2> <p>In the coming two years, as the COVID pandemic fades away, we can expect the travel experience to evolve accordingly. Airlines will become better at anticipating travel demand and meet the needs of travelers. Airlines will provide travelers with comprehensive travel planning tools using relevant traveler data points (nationality, residence, vaccination). Declaration forms will be automated to expedite mandatory procedures and travel passes will merge into “ready-to-fly” procedure and boarding passes.</p> <p>In summary, while the pandemic has added another layer of scrutiny in travel, over time this health layer will become automated and eventually seamless. Nobody wants health safety to become another travel pain point, like airport security checks after 9/11.</p> <p> </p> <p><em>Disclaimer: the author may be an advisor but not a shareholder of any company listed in the article</em></p> <p> </p> <p> </p> </article> <div class="pagination clearfix"> <div class="alignleft"></div> <div class="alignright"></div> </div> </div> </div> </div> </div> <span class="et_pb_scroll_top et-pb-icon"></span> <footer id="main-footer"> <div id="footer-bottom"> <div class="container clearfix"> <div id="footer-info">World Aviation Festival - Technology and innovation news for the aviation industry</div> </div> </div> </footer> </div> </div>  <script defer id="bilmur" data-customproperties="{"woo_active":"0"}" data-provider="wordpress.com" data-service="atomic" src="https://s0.wp.com/wp-content/js/bilmur.min.js?m=202448"></script> <script data-cfasync="false"> (function(w,i,s,e){window[w]=window[w]||function(){(window[w].q=window[w].q||[]).push(arguments)};window[w].l=Date.now();s=document.createElement('script');e=document.getElementsByTagName('script')[0];s.defer=1;s.src=i;e.parentNode.insertBefore(s, e)}) ('wisepops', '//wisepops.net/loader.js?v=2&h=xB9aNM5HXy'); 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