The Future of Air Travel

Published by Sabre Airline Solutions® and written by The Economist Intelligence Unit.
THE FUTURE OF A I R TRAVEL :
IMPROVED PERSONALISATION AND PROFITS THROUGH
THE INTEGRATED USE OF CUSTOMER DATA
WHITEPAPER

CONTENTS
Introduction 2
Poor customer experiences erode loyalty 3
Improving the customer experience: Available and cost-effective solutions 5
Solution 1: Using existing technologies to personalise travel 5
Solution 2: Building on best practices from other industries 6
Solution 3: Wielding the wealth of data that travellers provide 8
Addressing the pain points in the traveller’s journey 11
Improving booking 11
Improving the airport experience 13
Improving the in-flight experience 16
Capturing more of the value chain 20
Full-trip customer care and the power to address externalities 20
The competitive landscape 24
Conclusion 28
THE FUTURE OF AIR TRAVEL
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About the research: An Economist Intelligence Unit (EIU)
customer and executive survey
To gain greater insight into changes and innovations that could usher in this new era for travellers, The EIU conducted parallel surveys of 100 airline executives and 810 air travel customers in August and September of 2013. Half of the
executives hold C-level positions, with the rest being SVPs, VPs or directors. The regions of North America, Asia-Pacific and Europe are equally represented with 30% each, while Latin America, the Middle East and Africa make up the
remaining 10% of responses.
About one-third of the companies represented in the survey report US$1bn or less in annual global revenue, while 29% boast revenue of US$5bn or more. Participants in the
consumer survey were screened to include only individuals over 20 years of age who had travelled by air in the
previous 12 months; the gender balance was near-equal (53% male and 47% female), with respondents spread across 18 different countries.
In an effort to better understand the issues facing airlines today, The EIU also conducted in-depth interviews with 16 industry leaders and observers. We’d like to take this opportunity to thank all those who shared their time and insights.

In the coming decade, airlines will have the opportunity to transform themselves from commoditised providers of transportation to full-trip coordinators that interact in an integral, more profitable way with travellers during every step of their journeys.
To do so, airlines will have to improve the customer experience, revive brand loyalty and undo the effects of years of cost-cutting. By adapting best practices developed by or refined in other industries and making the best use of existing technologies and the wealth of data travellers provide, airlines will be able to improve their return on investment (ROI), reduce costs and give customers more of what they expect of the total experience.
The Economist Intelligence Unit surveyed more than 100 airline executives and 800 passengers, as well as conducted in-depth interviews with 16 industry leaders and observers, in an effort to better understand the issues. Research has confirmed that customers want a more personalised and satisfying experience and that airline executives want more sustainable profit margins. Fortunately, these goals can be attained together.
Existing technologies such as in-flight Wi-Fi, mobile devices and social media can help the industry improve the customer experience at a manageable cost. Moreover, by adapting customer information management strategies from other industries, airlines can empower passengers by personalising air travel, making it pleasurable once again. By exchanging information with their customers in a more consistent and intuitive manner, airlines will be able to understand and actively respond to their customers’ needs and desires.
As airlines master these approaches, they will also be positioning themselves to vie for the role of full-trip coordinator — taking passengers from the booking process to and through the airport experience, on to the flight itself and beyond. Online travel agencies (OTAs) and the hospitality industry, as well as Big Data companies, such as Google, are already displaying an interest in this potentially lucrative role.
As this contest intensifies, the winners will be able to substantially improve the travellers’ experience — and be paid for it. Airlines slow to adapt risk being reduced to commodity suppliers and, therefore, to be mere links in a chain over which they have little control. The strategies outlined in this paper will help the airline industry respond to the heightened competition for domination of the travel value chain.
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2
Introduction

Most critically, brand loyalty has declined. Passengers
used to clearly understand the differences between and
nuances among airlines and often preferred flying with
one over another. However, cost-cutting has made air
travel and what amenities remain feel generic, if not aus-tere
or virtually nonexistent.
Travellers have issues with every segment of the expe-rience:
booking flights, getting to and from airports and
traversing the airports, as well as the actual experience
of flying. When customers are asked what improve-ments
in their overall air travel experience they would
most like to see, spending less time in the airport (78%)
topped the list, followed by having a more enjoyable
experience in the airport and improving on-time perfor-mance
(both at 74%) [Exhibit 1].
Airlines currently operate under fierce cost pressures. De-regulation
removed a variety of supports and protections
for the traditional network carriers, and several waves of
nimble, clean-slate, low-cost airlines — unburdened by
retiree pension obligations, older equipment or outdated
systems — have changed the industry’s operating stan-dards.
Additionally, airlines are hit regularly, but unpre-dictably,
by a variety of disruptions — in the weather, in
energy markets, in political or security situations — thus
making planning difficult or impossible.
Unable to control many variables, airlines have focused
on not merely holding down costs, but on paring back as
many costs as possible. Cost-cutting — which used to be
a discrete, periodic process of reviewing and optimising
systems — has become a continuous process that, in the
short term, has proven effective: costs have come down.
The unintended consequences have included a reduced
focus on issues that passengers care about and that cause
concern when left unaddressed.
THE FUTURE OF AIR TRAVEL [ [
3
Less time in airport
More enjoyable experience
in flight
Improved on-time
performance
Improved baggage
handling
Streamlined search and
booking systems that
operate industrywide
38%
37%
36%
32%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
25%
36%
37%
32%
36%
17%
20%
21%
23%
23%
3%
5%
4%
6%
5%
2%
2%
2%
1%
1%
1%
2%
1%
1%
1%
Very strong preference Somewhat strong preference Moderate preference
Somewhat weak preference Very weak preference Don’t know
Note: Asked of consumers.
53%
Exhibit 1
Preferred
improvements
in air travel
experience
over the next
10 years
Poor customer experiences
erode loyalty

This is good news for the flying public: for some carriers,
the focus may now be shifting from costs to customer
experience. It can be good news for the industry as well.
Having been broadly successful in reducing costs, airlines
can now turn to rebuilding one of their most important,
if recently neglected, assets: a core of loyal customers.
Three broad areas offer a wealth of underleveraged
tools to achieve this goal:
• Technologies that are already available can be used
to better personalise air travel, from before
customers book through post-trip feedback.
• Best practices in hospitality, logistics and gaming
offer powerful road maps for improving the
customer experience, thus boosting loyalty and
increasing repeat business
• The abundance of data available to airlines — about
both their own operations and about their customers
— can be used to provide travellers with more
information on which to base decisions, while also
allowing airlines to better understand and, thus,
offer more of what customers want
IMPROVED PERSONALIZATION AND PROFITS THROUGH
For airline executives surveyed, however, the customer
experience comes in third on their priority list (40%), be-hind
building customer loyalty (49%), while cost reduc-tion
remains on top (57%) by a wide margin [Exhibit 2].
Surprisingly, the goal of increasing revenues comes in
fourth place at 34%, indicating that airlines have reduced
their focus on this priority by adopting the low-cost
carriers’ pay-for-what-you-use approach to maximise
passenger revenue per seat mile.
4
57%
49%
40%
34%
34%
33%
Note: Asked of airline executives. Respondents were asked to select up to three.
Exhibit 2
Top strategic
priorities
over the
next 10
years
Reducing operating costs
Building customer loyalty
Improving the customer
experience
Developing/strengthen
partnership strategies
Increasing passenger revenue
per seat-mile/kilometre
(PRASM/K)
Gaining market share

Solution 1
Using existing technologies to personalise travel
Carriers are understandably reluctant to invest money
and resources in unproven technologies. Adopting (and
possibly adapting) a new technology and testing it can be
arduous, complicated, costly and time-consuming.
Airlines can sidestep these problems by turning to tech-nologies
that have already been tested, refined and ac-cepted.
As airlines welcome Wi-Fi, notebooks, tablet com-puters
and other mobile devices on-board, air travellers
are no longer in-flight Internet exiles. Moreover, keeping
current with how customers communicate — Web, text,
Facebook, Twitter, etc. — allows carriers to stay connect-ed
to them from booking through their arrival home.
The biggest game changer is Wi-Fi — a crucial gateway.
People assume they will always have Web access to
modify and personalise their environments; thus, making
in-flight access the norm instead of the exception opens
up tremendous possibilities for both productivity and
entertainment. After the initial investment, Wi-Fi can be
provided at a relatively low ongoing cost.
Putting communications, entertainment and productivity
devices literally back in the customer’s hands is one of the
most powerful and efficient ways to personalise a trip.
Technology can yield unexpected savings
Making in-flight Web access a standard feature in-stead
of a frill often provides demonstrable operational
savings. Such access can also open up new onboard
revenue-generation opportunities — from premiums
for special content to profit sharing across e-commerce
partnerships.
“We firmly believe that giving people access to in-flight
entertainment when they’re captive for an hour or two
will make us a fortune,” says Michael O’Leary, Ryanair’s
chief executive officer. “But we don’t want to spend a
fortune to make a fortune.”
As a European airline, Ryanair pays higher access costs
than US or other international carriers and will take lon-ger
to see a return on its investment.
Newer technologies, tablets, for example, can add reve-nue
in unexpected ways and even help airlines save on
fuel. In 2012, Qantas began distributing iPads to pas-sengers
to enable streaming of on-demand content on
its older Boeing 767 fleet; this was less expensive than
rewiring the cabin. Once Qantas had all the obsolete
wiring and racking removed, the airline saw a mea-surable
drop in fuel consumption, according to Alison
Webster, executive manager of international customer
experience for Qantas.
China Airlines’ Hsiao-Hsing Tung, vice president for
corporate development, points to the “dual-use bene-fits”
of making Web-connected tablet computers stan-dard
equipment for cabin crew. Tablets can help cabin
crew recognise most-valued customers and pay special
attention to them. The crew can also use them to reduce
repair time on the tarmac by requesting spare parts for a
broken seat, for example, during a flight.
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Improving the customer experience:
Available and cost-effective solutions

Joachim Schneider, Lufthansa’s vice president of product
management, explains how his airline uses social media
to respond quickly to passenger problems: should a cus-tomer
post to Facebook from a taxi, warning that he will
be late, Lufthansa will proactively rebook his flight. The
airline thus becomes the solution rather than the problem.
Solution2
Building on best practices from other industries
The airline industry can learn a lot from its would-be
competitors and others. The hospitality, logistics and
gaming industries offer well-honed best-practice tem-plates,
systems and approaches that could substantially
improve the air traveller’s experience. Some of those
best practices even have their roots in innovations origi-nated
by airlines — loyalty programmes, for example.
Customising, pushing and pulling data
Collecting, exchanging and analysing data are the key to
these approaches. Sector leaders in the hospitality, logistics
and gaming industries constantly collect detailed informa-tion.
Among other metrics, they study how and how much
their services are used, monitor operational efficiency and
analyse customer responses. The hospitality industry, a
competitor with airlines for ownership of the full travel value
chain, merits particular attention.
Hospitality companies routinely collect and analyse data to
make their operations more efficient. If a hotel has clear
data about the types of food eaten more often on specific
days of the week, it can order more accurately and cut down
on waste. Such information can also help the same company
Leveraging social media
Airlines can make additional gains by making better use
of another proven technology — social media — before,
during and after flights. Social media can improve customer
service by serving as a fast workaround for overwhelmed
phone lines or gate agents. They can also provide a richer
exchange of information with customers in both directions,
giving carriers an opportunity to listen, learn and respond.
“Different platforms lend themselves to different func-tions,”
notes David Cush, Virgin America’s president and
chief executive officer. The 144-character limit for Twitter is
effective for marketing time-sensitive promotions and for
resolving customer service queries. “By virtue of its format,
you have to be very clear, very direct and very brief,” he
says. “Facebook allows Virgin America to connect with the
consumer on a deeper level.”
Glenn Morgan, head of service transformation at British
Airways, predicts that customer engagement will continue
to shift to the Web, but warns that platforms fall in and out
of favour — airlines have to be sufficiently attentive and
sufficiently nimble to keep up with change. “Twitter is here
today,” Morgan points out. “But what about WhatsApp?
BBM?” he asks. “We have to go where the customer is.”
Airlines may find it difficult to allocate resources to these
constantly changing media channels, but that attention is
now mandatory. “You cannot hide” from the social media
space, says Thierry Antinori, Emirates’ executive vice presi-dent
and chief commercial officer. “You’re either completely
out, and you have a lot of missed opportunities. Or you are
in, and you have to be good. So we chose to be in.”
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“Twitter is here today. But what about
WhatsApp? BBM? We have to go where
the customer is.”
– Glenn Morgan, head of service transformation at British Airways

An investment, not a gamble
Harrah’s Entertainment, a resort and casino company (now Caesars Entertainment), started to develop and refine the collection and analysis of customer information back in 1998 on a level not seen before in that industry, according to a Harvard Business School case study. Using a loyalty programme introduced the previous year and expanding the use of its patented swipe-card system, Harrah’s tracked every customer transaction it could. Data gathered included not just choices for bet-by-bet gambling, but food, lodging and other forms of entertainment as well. Every Harrah’s property across the country was included.
As noted in the case study, this information did not simply track how customers behaved in the past. It created information- rich customer profiles that enabled prediction of how they might behave in the future and what kinds of incentives and interventions would either encourage or discourage more visits to Harrah’s.
Expanding the scope and sophistication of its rewards programme allowed Harrah’s to run on-the-ground experiments to test different marketing strategies. Having defined a specific cohort of interest — perhaps women between 55 and 75 who live within 10 miles of a casino — it could divide the group in half, provide different incentives to each, then track the resulting purchasing behavior to see which works better.
Airlines face legitimate and serious questions about using new technologies. Indeed, they can be expensive: the design and implementation of Harrah’s upgraded Total Rewards Program was done at a cost reported by The Wall Street Journal in the US$100m range. It bears underlining that this was 15 years ago: the technology has since been vetted, improved and come down in price. But Harrah’s ROI was just as impressive: in 1999, Harrah’s revenue increased over the previous year by 50%, according to the Journal. The company’s stock price and profits doubled.
give its customers more of what they want, in ever-more fine-grained detail. If a hotel knows the guest in Room 268 favours a Black Angus rib-eye steak cooked rare with hot sauce on the side, that guest is more likely to rebook at that hotel. The finer the distinctions, the more personal and compelling the customer experience and service.
Improving efficiency and personalisation can create powerful synergies: cost savings married to personalised service can lead to greater customer loyalty and higher profits.
Logistics companies do something similar. Many have expanded the package delivery options they offer in response to customer demand; they then track systems efficiency from package pick-up to package delivery, assessing and adjusting their services in response to customer behavior. What a stay-at-home parent earning an income by selling goods on eBay needs differs from what a family business that mostly ships between the US and the Indian subcontinent needs, for example. Logistics companies track these trends and tailor their services, defining them with greater precision and specificity: time to destination; time, place and circumstances of delivery; level of security; packaging used, etc.
Hospitality and logistics companies track data in two different ways. Systems that monitor packages, customers, guests and transactions automatically “pull” that data and report them on demand. Thus, these companies can know immediately how many packages were late today because of snow in Cleveland, Ohio, or how many room-service orders included hamburger versus steak. When data need to be interrogated or analysed further, these systems will “push” for an answer. The businesses might need to know, for example, how many people hold the logistics company responsible for the snow delay or how much the hamburger vs steak decision was influenced by price. Increasingly, data analytics and correlation algorithms are automating that process.
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Similarly, airlines need to leverage the data they already
collect to make trips as smooth and efficient as possible,
to make flyers feel not only welcome but at home on-board
and to understand the combination of factors that
will engender repeat business and brand loyalty.
Customisation as a norm
Consumers have come to expect their daily life to be as
customisable as their online experiences. Web browsers,
for example, now incorporate a slew of functionalities that
— whether customers are consciously aware of it or not —
make navigating online more efficient and more personal.
Software, in effect, predicts future behavior based on an
analysis of previous patterns, anticipating and, therefore,
preparing for what will likely be desired next.
• Cloud-stored profiles serve as a personalised desk
top wherever a customer logs in: bookmarks,
favourites and auto-fill information to facilitate filling
out forms.
• Predictive analytics allow browsers to cache images
or information customers use more frequently;
invisibly, this reduces the frustration and irritation of
lags and wait times.
• E-mails and online calendars are mined by profiling
algorithms that then produce context-appropriate
advertising: mention scuba diving in an e-mail, start
seeing ads for swim fins.
Solution 3
Wielding the wealth of data that travellers provide
Airlines already collect much of the data that would
allow them to make best use of the approaches of the
hospitality, logistics and gaming industries. Airlines were
an early entrant in the modern data collection business
when they pioneered computerised reservations sys-tems.
But the industry now lags other sectors in how it
uses its data.
A top-tier logistics company can do more than simply
move a package from a suburban porch in Belgium to an
office in Hong Kong on the agreed schedule. It can also
pinpoint the package’s location at any time and, with suf-ficient
awareness of the larger transportation network,
reroute that package on the fly to save time or money or
to skirt difficulties.
A high-end hotel also knows, ahead of a guest’s arrival,
that she prefers turn-down service to be done when she
is at dinner, that CNN should be the default channel on
her television and that she is happier if sugar is removed
from the coffee supplies in her room.
A resort casino with a well-tuned predictive analytics
programme can note the interval since Mr Tanaka’s last
visit and foresee that an appearance by a famous Italian
tenor and the offer of a US$25 dinner discount may tip
him towards visiting on the upcoming weekend.
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Hotel
Logistics
Gaming

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This ongoing analysis is inherently low cost. It takes data
already in the system and uses them in more sophisticat-ed
ways.
Airlines already have a huge amount of information about
their customers: where they go, how often they travel
and with whom, how much they spend, where they sit
and what they eat. To the degree that customers book
package deals offered on airline websites, airlines also
have information about car rentals, hotel choices and even
destination activities.
Airlines also have the technical means to make the most of
such information. Airlines and airports are intensive users
of operational data and communications technologies. They
also use data to improve the efficiency of sub-systems such
as catering, cleaning, maintenance and fuelling. Data also
facilitate better coordination between different systems.
Today, customer options at the booking stage are confined to
a handful of fairly crude categories: first class, business class
or coach; vegetarian, halal or kosher food; non-stop or lay-over.
Asking customers for more information, and providing
more information and options to them in return, would allow
airlines and passengers to customise the travel experience to
their mutual benefit.
People thinking versus packages thinking
Airlines have succeeded in making flying safe — passen-gers
are safer in the air than on the road. And, within the
constraints of weather and other externalities over which
airlines have no control, the industry runs on a pretty
tight schedule. Analysing operational data has helped
airlines make great progress in improving revenue per
passenger mile.
But airlines have not done as well using data to cus-tomise
the passenger experience. Travellers get where
they’re going, but they could have a much better expe-rience
and, as a consequence, feel better about the trip
and about the airline. Using information to provide more
personalised service can improve customer satisfaction
as well as ROI.

With the right planning and investment, and by making
better use of information already available, air travel
a decade from now could give both the industry and
travellers more of what they want. The passenger gets
more options for personalising a trip, a smoother pas-sage
through the airport itself and a more pleasurable
in-flight experience, while the airline gains loyal custom-ers
who will provide repeat business, along with a more
efficient, and thus profitable, process overall.
Executives are well aware that a key part of implement-ing
this vision will depend on establishing industry-wide
data and interoperability standards. Almost two-thirds
of the executives surveyed (65%) see this being accom-plished
within the next 10 years; however, exactly half
of them also worry, that competitive forces may stymie
movement in this direction [Exhibit 3].
When Lufthansa uses information from Facebook to
rebook the flight of a passenger stuck in freeway
traffic, it provides a direct personal benefit to that
passenger. The airline also gains more time to sell the
seat to a standby traveller. An airline that knows that
a passenger’s daughter has a peanut allergy and acts
to safeguard her reassures the parent in a way likely to
engender brand loyalty. It also reduces the likelihood
of an in-flight emergency that could have a cascading
effect on the schedules of multiple flights.
Similarly, a business flyer who can access her compa-ny’s
email system in-flight is being given back time
that she might have lost. She is more likely to favour an
airline that connects her, rather than one that virtually
isolates her.
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Industry-wide data and interoperability
standards
Near-field communications
Satellite-to-aircraft personal communications
Biometrics
Radio-frequency identification (RFID)
Facial recognition
Likelihood of adopting following technologies for customer-facing functions over the next 10 years
65%
54%
46%
43%
38%
30%
23%
28%
43%
35%
40%
42%
11%
8%
23%
10%
14%
5%
8%
6%
8%
4%
3%
12%
Note: Asked of airline executives.
Don’t know
Likely to adopt
beyond 10 years
Likely to adopt
within 10 years
Unlikely to ever
adopt
Exhibit 3

Note: Respondents were asked to select up to three.
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Improving booking
Customers are dissatisfied with the process of booking air
travel, with the relatively paltry range of choices they have
to personalise their flights and with both the quantity and
the quality of information available to them as they plan
and book trips. Many have turned to websites like Flight-
Aware, AirportZoom and SeatGuru to get richer descriptions
of flights, amenities and equipment, as well as more com-prehensive
information about destinations and airports.
This corresponds to our survey results that show that
customers place a higher value on contextual infor-mation
during booking than do airline executives (by
nearly 20%) [Exhibit 4]. When it comes to technology
to improve the customer experience at the booking
stage, 28% of executives stressed predictive analyt-ics,
while 37% emphasised large-capacity, high-speed
data storage and retrieval.
Integrated booking and schedule information across the
travel industry, including inter-modal
Individualised travel options presented to every customer
based on predictive analytics
Seat selection based on matching of traveller profiles and
preferences
Virtual travel agents
Opportunities for contextual advice
Airline executive priorities vs customer preferences for booking flights
31%
22%
3%
20%
51%
19%
24%
14%
5%
2%
Addressing the pain points in the
traveller’s journey
Consumers
Airline executives
Exhibit 4

Starting a trip on the right vector
Airlines face genuine technical problems in aggregating the information passengers are looking for across multiple systems with different protocols and standards. Synthesising and delivering the information to an ever- evolving variety of platforms — from desktop PCs to smartphones to tablets — is a serious added complication. This is, however, exactly what the independent websites are doing — sometimes with information that comes directly from airlines.
Airlines need to respond. As Tony Tyler, the International Air Transport Association’s (IATA) chief executive officer, points out, if the booking experience is unsatisfactory, the whole trip starts off on the wrong vector. A “richer presentation of the full range of the product offering”, he says, is part of the implementation of the recently approved New Distribution Capability (NDC), IATA’s favoured approach to allowing travel agent sales channels to offer the same rich content that is available on airline websites. This XML computer language-based standard will enhance communications between airlines and travel agents, “boosting transparency and choice”.
Jeff Foland, United Airlines’ executive vice president of marketing, technology and strategy, has an expansive vision of a more fine-grained and comprehensive information exchange at the booking stage. “Today, you might get offered the exact same product feature 100 times in a row, and you turn it down 100 times in a row,” he says. “That’s not good for you, and it’s not good for the business.” An expanded array of service offerings and combinations, he explains, will mean that two passengers sitting next to each other can have markedly different experiences.
Mr. Foland sees the creation of more diverse “bundles” — an entertainment bundle or a kids’ bundle — as a way for airlines to market and deliver what flyers want with greater precision. “Cabin classes are already bundles of sorts,” he notes. “But there will be much more choice.” For example, customers will be further empowered by selecting their meal times or registering a preference not to be disturbed.
Passengers can now book flights 24/7, with mobile options making PC-based approaches increasingly obsolete. While the industry is already good at allowing passengers to manage their bookings on the run, according to Virgin America’s David Cush, he concedes that there is room for further improvement.
Individual passengers have different ideas about the information they want from airlines, the information they might want to withhold and the way information is presented.
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13
In the future, airlines will provide virtual assistants able
to help travellers with all aspects of their journeys —
from inquiries to bookings to choosing in-flight ameni-ties.
The websites of Alaska Airlines and United Airlines
already feature virtual agents — “Jenn” and “Alex”, re-spectively
— that respond to everyday travel questions.
How travellers might respond to these sorts of options
and how they might interact with airlines requires further
and more careful study, with particular attention paid to
issues of age and culture. Technologies that feel alien or
awkward to older flyers may be exactly what younger
flyers demand. Meanwhile, the fastest-growing markets
for air travel are in East Asia and South Asia; airlines
that are culturally aware and responsive to the differ-ent
needs of different people will also more easily earn
customer loyalty.
Improving the airport experience
“For those customers who prefer to take advantage of
self-service options, your first person-to-person inter-action
with the airline will be when you’re sitting in the
plane,” IATA’s Mr. Tyler says, projecting a future in which
the trip from airport door to aircraft cabin is stream-lined.
The airport experience has proved to be the most
frustrating segment to passengers. By 2020, IATA wants
80% of passengers to have the option of total self-ser-vice
at the airport. Executives agree with consumers
that boarding without human interaction would yield the
greatest improvement in the customer experience (62%
and 58%, respectively) [Exhibit 5].
Boarding without manual intervention using electronic
data exchange
Traveller identification using facial recognition
or biometrics
Real-time flight progress information using virtual
reality displays
Turbulence prediction systems to ensure a
smooth flight
In-flight videoconference capabilities
Top priorities for improving boarding and in-flight experience over the next 10 years
62%
43%
45%
52%
23%
58%
41%
31%
26%
9%
Consumers
Airline executives
Exhibit 5

Airports with fewer hurdles
Achieving that dream is quite feasible with currently available technology. The ability to drop off luggage, keep carry-ons and board without the need for any other interactions or obstructions is already being tested in the United States and elsewhere.
Biometric IDs are a key component in making it happen. Current US and EU passports include radio-frequency identification (RFID) chips with data storage: they can contain the same basic information as a paper document and have space as well for digitised fingerprints or retinal scans. These biometric components would make these documents secure and tie them with a high degree of reliability to the bearer. The IDs can work in concert with pre-screening programmes; instead of having security agents make day-of-travel threat assessments, pre-screening allows authorities to conduct deeper, more comprehensive investigations, resulting in a kind of “traveller certification”.
The unimpeded curb-to-cabin stroll through the terminal would eliminate the current series of lines, stops and starts. They would be replaced by a single biometric ID — perhaps embedded in a mobile device — that would allow certified passengers to walk past weapons screening devices that are invisible to the public. Boarding authorisation could be embedded in the same ID; permanent RFID luggage tags could allow baggage to be dropped off quickly and easily. Proposals have been made to facilitate this kind of system at hotels or railway stations in addition to airports so luggage could be tracked at all times.
While the technology to enable these changes is available, full-scale implementation and integration face a number of hurdles. Streamlining the path through the airport would reduce labour costs and save airlines and airports money. Infrastructure investments to build the systems, however, would be significant. A disparate group of competitive stakeholders in the private and public sectors would have to buy in and agree on standards. The programmes would also have to overcome passenger concerns about data privacy.
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Airport commerce as opportunity or obstruction
Airline executives and customers agree that streamlin-ing
the airport experience would reduce both costs and
frustration. They do not agree, however, about how to
use these newly open spaces.
As long as they don’t put additional clutter in travellers’
paths, many executives surveyed (44%) would like
to use some of the space freed up to increase airport
shopping options, along with providing opportunities for
ordering restaurant food or duty-free goods for onboard
delivery. Only 21% of potential customers, however,
were interested in those options [Exhibit 6].
Virtual-shopping venues could provide additional reve-nue
streams for the industry and an expanded range of
options — with a smaller physical footprint — for travellers.
Germany’s Frankfurt Airport already features a virtual-re-ality
wall that sells duty-free goods. Passengers point their
smartphones at a product’s QR code, adding it to a virtual
shopping cart, then pick up the merchandise at a collec-tion
point 15 minutes later. Some executives (13%) would
like to see these options expanded [Exhibit 7].
Single biometric ID accepted at every security point
along the journey
Permanent baggage tags linked to customer profile,
offering real-time baggage tracking across the journey
Seamless real-time trip information streamed to mobile
devices from every provider on the journey
Ability to order meals from airport restaurants or
duty-free purchases for delivery aboard aircraft
Augmented reality devices (such as Google Glass) to
guide travellers through airports
Top priorities for improving day-of-travel experience over the next 10 years
63%
65%
46%
44%
29%
54%
54%
33%
21%
16%
Consumers
Airline executives
Exhibit 6

mproving the in-flight experience
A personalised experience results from personal deci-sions.
Air travel, of necessity, revokes most adult privi-leges
and choices. Passengers sit in their assigned seats,
sitting up straight when prompted; they eat when it’s
snack time and only what’s available; they can even be
refused bathroom privileges. Legitimate concerns about
costs, revenues and ROI have led to a far more Spartan
flying experience with more seats, less legroom and
flights often at full capacity. Heightened security con-cerns
have also inserted intrusive and time-consuming
hurdles between the traveller and the departure gate.
Airlines are constrained in responding to these issues by
space limitations, by regulations and by costs. Neverthe-less,
airlines can make significant improvements to the
travel experience by making affordable adjustments to
elements of the onboard environment, for example, lights,
colours and air quality, and by expanding virtual options.
PJ Wilcynski, payloads chief architect at Boeing Commer-cial
Airplanes, cites research on the company’s new 787
Dreamliner to argue that perception can trump physical
realities. “We found that passengers on the same airline,
same routes, same seats, same seating configuration and
same meal service thought their seats were wider and
the food service better in the new interior,” he relates.
All-LED lighting, brighter colours, increased humidity,
overhead pivot bins and larger windows created a sense
of space and comfort that transferred to aspects of the
environment that had not been changed, Mr Wilcynski
suggests.
Technology is also permitting more of the customised
options that passengers both desire and value. Some will
require infrastructure upgrades, but others are relatively
low cost or even offer potential revenue streams.
63%
63%
43%
32%
25%
24%
13%
Note: Asked of airline executives. Respondents were asked to select up to three.
16
Top ways
industry
players can
use technology
to collectively
enhance the
traveller
experience
Single electronic ID for security, check-in and boarding
Data sharing to integrate updates of flight status,
security delays and inter-carrier transfers
Mobile apps providing end-to-end travel information from
multiple providers
Permanent baggage tags common to all airlines (eg, RFID)
On-board meals ordered from local in-terminal restaurants
Data sharing to establish airports as inter-modal hubs
Duty-free purchases from a virtual retail wall
Exhibit 7

17
Toward the horizon
Current barriers, along with cost concerns, limit
the degree of change most of our executive
survey respondents can envision. A minority,
however, take a more expansive view, projecting
an unbounded future for air travel.
Supersonic travel:
Supersonic travel has not been a reality for the
travelling public since 2003, when the last Con-corde
was retired from service. Despite dramati-cally
reducing flying times, only 23% of surveyed
executives believe that such jets would improve
customer service—the Concorde was infamous
for its cramped, unglamorous cabins.
Among the major players, however, Boeing
is reportedly working on an aircraft that flies
120 passengers at more than 1,000 miles an
hour. And NASA has been investigating ways
of reducing the sonic booms associated with
supersonic aircraft, while private firms are also
working on making them more efficient.
In the realm of business jets, several companies
are accepting orders for planes that generally
seat between 6 and 20 passengers, cruise at
better than 1,000 mph—above Mach 1, but be-low
Mach 2—and retail for somewhere between
US$60m and US$80m. Spike Aerospace hopes
to bring its S-512 to market in December 2018;
Aerion is aiming for 2021 with its SBJ; while
HyperMach is a bit of an outlier—its SonicStar is
intended to have room for up to 32 passengers,
a cruising speed of around 3,000 mph, just be-low
Mach 4, and an entry date of 2024.
Henry Harteveldt, founder and travel industry
analyst at Atmosphere Research Group, is skepti-cal
about the rebirth of supersonic travel. “Unless
the cost of fuel—traditional oil-based or alternative
fuel—comes down, and the environmental impact
can be managed appropriately,” he says, “I don’t
think you will see supersonic flights happening
over large masses of land, certainly not densely
populated areas. We may see transoceanic su-personic
travel emerge, but it would have to be
commercially and environmentally viable.”
Prospects for hypersonic travel—generally above
Mach 5, or 3,850 mph—are more distant. Lockheed
Martin expects to have a scaled-down model of its
SR-72, a pilotless, hypersonic military drone, in the
air by 2023. The company is working toward a 2030
launch of the operations-ready version, with both
offensive and intelligence-gathering capabilities.
On the civilian side, Airbus Group’s Zero Emission
Hypersonic Transport (ZEHST) concept plane, using
currently available technologies, would carry 100
passengers at Mach 4, burn carbon-neutral algal
fuel until it got to altitude, then switch to a mix of
oxygen and hydrogen, emitting only water as ex-haust.
But Airbus does not see such transport being
available before 2050.
Pilotless aircraft:
A majority of commercial jets already have most
of the technology necessary to fly without a pilot.
Researchers are developing drone technology to
operate cargo flights—even through wildfires and
other hazardous conditions.

[
[
18
Letting passengers make themselves virtually at home
Passengers are the best judge of what type of access would help make them feel at home. For many travellers, losing time is even worse than losing autonomy. So much of modern life — work, play, commerce and communication — depends on Web access that to be cut off for several hours feels to many like the time has been rendered unusable. Provide Web access and that time is recaptured.
By allowing more comprehensive information exchange during booking, airlines can make a more personalised flight a reality. Parents could be allowed to lock out certain content at a child’s seat during the booking process. And, even though customers with open Web access could retrieve whatever they wanted on their own, they might also be offered an additional menu of profile- based personalised options as an important welcoming touch.
Some 29% of executives surveyed can see pilotless aircraft entering their fleets, their comfort with the idea likely based on knowledge of current airline practices: pilots take control during take-off and landing, with most of the flight time usually spent monitoring decisions made by the autopilot. Pilotless take-offs and landings are not too far away.
Travellers are far more leery: only 2% express interest.
Mr Harteveldt is skeptical because of the economics and potential liability. “The insurance companies, frankly, won’t let [pilotless aircraft] happen,” he says. “Accidents occur. You need to have well-trained pilots on the flight deck in case the technology isn’t working as it’s designed to work.”
Helium airships:
Models are now on the drawing board for helium airships that could carry as much as 500 tonnes. A niche market exists for craft that would enable cargo delivery— sometimes referred to as “road-less trucking”—in areas inaccessible to airplanes.
Helium, however, is a non-renewable resource. With global demand outstripping supply, prices have more than doubled in a decade. The shortage has been sufficiently severe to force the US military to scale back in-theatre use of airships.
High-tech applications that require helium—MRI scanners and superconductors, for example—use more than four times as much as is consumed by “lift” applications. Given market realities, the odds don’t favour use for passenger travel.

[
[
19
This personalisation could be achieved at virtually no marginal cost. An airline that consistently makes its customers feel surrounded by the comforts and options of home is far more likely to encourage loyalty, maintain connection and get repeat business.
And, as in the gaming industry, airlines can apply the information gleaned about which options are utilised and which are not to improve their customer profiles.
Costs, benefits and ROI
Making Internet access a standard part of the flying experience will require significant investment. Air-to- ground data transmission and upgrading onboard systems will prove expensive. But improvements in technology will bring transmission costs and weight down, and installing systems as a standard part of aircraft assembly will be much less expensive than retrofitting.
Improving the flying experience is essential to the rebuilding of customer loyalty that airlines need to shore up their businesses. The critical calculation of ROI should include:
• Synergies of combining upgrades for passenger
services with necessary data and communications upgrades on the operations side;
• Comprehensive analysis of potential efficiencies across the full range of systems — from savings in labor, time and weight, for example;
• Revenue enhancements enabled by these upgrades, from premium service up-selling to e-commerce, both direct and with partners;
• The value of additional, more timely and richer infor mation about customer preferences, desires and complaints.

20
Many factors outside of airlines’ control nonetheless
affect how passengers respond to them. Economics,
politics and, of course, the weather play roles beyond
anything a carrier can manage. Airports, while an intrinsic
part of the aviation system, involve even more uncon-trollable
variables, including security and transportation
issues..
Full-trip customer care and the power to address
externalities
Airlines may be reluctant to take on the additional com-plexities
of coordinating their operations with a bigger,
more complicated and less integrated travel industry. But
what was once defensible prudence has become prob-lematic
hesitation and resistance. Circumstances have
changed, and technology has matured.
A single Web search involves more data processing than
was used by NASA’s Apollo programme over all the years
of its existence and the multiple flights it launched. Tech-nology
is no longer a barrier — inertia is. If the industry
does not involve itself in a larger piece — arguably the
entirety — of the travel value chain, another industry will
do so to the peril of airlines.
The limits of hardware, the elasticity of
data processing
Trains today travel about six times faster than they did
in the mid-19th century—a rate of speed first achieved
50 years ago.
Planes fly about 10 times faster than they did in 1914;
passengers first reached today’s average air speed for
commercial travel, roughly 500 mph, in 1952.
If we consider electronic data transmission to have
started with telegraphy and Morse code and that the
initial rollout of Google Fiber represents the current
high-water mark, then, between 1844 and 2012, the
speed of data transmission increased by a factor of
256,000,000.
The rationale for focusing on data throughput as a way
to improve both the economics and the experience of
air travel derives from that stunning set of numbers.
While land and air speeds have not increased recently,
data speed has attained escape velocity—with corre-sponding
increases in processing power and storage
capacity. At the same time, costs for computing equip-ment
and services—and the communications and sens-ing
technologies that use data as a platform—continue
to plummet.
These technological gains and economic efficiencies
are the airline industry’s greatest unleveraged asset.
Compared with hardware and physical infrastructure,
moreover, changing and expanding the use of tech-nologies
in the digital sphere is much more under the
unimpeded control of the industry.
Capturing more
of the value chain

[
[
21
Maximising efficiencies over the long term
A key measure of efficiency is being able to match capacity and demand. Flying empty seats, heating empty hotel rooms or leaving rental cars in their stalls — all are underused assets and represent lost revenue across the travel chain. Individual service providers do what they can to combat this: if the flight from New York, New York, to Denver, Colorado, is only half-booked, the airline cuts the price of the remaining tickets.
For customers, however, the value of that discount has to be weighed against all of the other pieces of a trip they are left to cobble together on their own. An entity that offers to handle all the resulting changes as a complete package — taking customer preferences into account, making best use of facilities across the full chain and delivering all at a good price — would transform its role from vendor to coordinator — a powerful and more profitable position.
A full-trip coordinator is able to efficiently deliver a more consistent customer experience across the complete journey because it has a detailed and complete picture of the customer’s preferences, needs and desires, as well as how all the parts of the trip connect. Its customers will experience a more coordinated and personalised trip than even the traditional personal travel agent could provide.
Airline and hospitality websites, along with online travel agents, are aiming to take on the coordinator role — but their offerings are still more aggregation than coordination. They provide access but not enough intelligence. Travel packages are not so much personalised as divided into silos — business, leisure, adventure, etc. In many cases, they can offer bargains, but not the personalisation and coordination passengers seek.
Information and communication are key
An excellent in-flight experience is less likely to be remembered as such when sandwiched between a traffic jam on the way to the airport on one end and missing the shuttle to an unsatisfactory hotel room on the other. While those are outside the scope of the airlines’ responsibility, travel segments blur together: a bad day is remembered as a bad day and the airline is included in that memory.
Full-trip coordination addresses these issues in a manner similar to a combined on-call travel agent and an unobtrusive personal assistant. A clear path through traffic jams cannot be blazed, but technology now provides a range of ways to keep abreast of kinks in the travel

22
chain, to communicate with customers in a timely fash-ion
and to offer solutions that either help work around
problems or quickly address fallout if the problems are
insoluble.
Particularly valuable is the ability to identify and adjust to
problem cascades, for example, those caused by missed
or cancelled flights. Years of cost-cutting have meant
that a flight cancellation can result in hours of waiting
to speak to a representative on jammed airline custom-er-
service phone lines to rebook that single part of the
trip — after which other time-dependent reservations
and plans also must be adjusted. Passengers are frustrat-ed,
angry and out time if not money.
A full-trip coordinator would be able to see how, and
therefore address, problems can ripple across the full
trip; the coordinator could, perhaps, even have the power
to bargain down or pay whatever change fees might be
imposed. That kind of problem-solving and path-smooth-ing
could make travellers more loyal to the coordinator
than to any individual vendor.
An airline able to step into the role of efficiently solving
problems can also use information in softer, more pro-active
ways, like making sure that a hotel greets arrivals
from a late flight by providing them with information on
restaurants in the vicinity that are open late and serve
their favoured cuisine, for example, or offering expedit-ed
room service. This kind of personalisation makes for
a tangibly better experience and makes travellers feel
cared for as well. It builds loyalty.
Providing customer care at this level requires the mesh-ing
of several different kinds of information. The trip
coordinator needs to know the customer, see the full
trip and remain aware of the traveller’s evolving circum-stances.
This level of care combines the customising
approach of the logistics and hospitality industries with
the predictive analytics of the gaming industry.

23
Both customers and executives favour this trend towards
integration, but executive interest (51%) is significant-ly
higher than that of customers (31%) [Exhibit 8]. If
customers don’t demand a feature, it’s hard to get an
industry to invest in providing it. The problem may be
that customers don’t yet see all the benefits of full-trip
coordination. On the other hand, executives, who have
their full-trip travel arrangements made for them (usually
still by human assistants), are keenly aware of the value
of this service.
Customers want a faster transit through the airport.
They can see the path, and technology can deliver that
experience. Technology can also facilitate the delivery
of a much more integrated, cohesive and personalised
experience across the full trip. That path is not yet clear
to customers.
Travellers want a faster transit through the airport. They
can see the path and technology can deliver that expe-rience.
Technology can also facilitate the delivery of a
much more integrated, cohesive and personalised expe-rience
across the full trip. Travellers do not yet clearly see
that path.
Integrated booking and schedule information across the
travel industry, including different modes of travel
Seat selection based on matching of taveller profiles
and preferences
Opportunities for advice based on the specifics of travellers’
bookings (eg, advice that a traveller can secure a lower
fare by driving to an alternative airport)
Individual travel options based on past purchases
and preferences
Top priorities for improving the booking experience over the next 10 years
51%
14%
2%
24%
31%
22%
20%
19%
Consumers
Airline executives
Exhibit 8

[
[
24
Considering the interface
Technology can do a great deal to automate and drive down the cost of this level of service. Finding the balance between efficiency and a positive experience is tricky, however. E-mails and texts can be fast and effective; automated telephone agents can provide more flexibility in ramping up capacity when problems are widespread and demand spikes; the range of interactive avatars continues to expand.
But whatever technologies trip coordinators use — to provide services or to offer options — these technologies have to be reliable, accessible and not alienate customers.
Henry Harteveldt, founder and travel industry analyst at Atmosphere Research Group, cautions about moving too quickly or too far away from live agents. “We’ve seen airlines in the United States and Europe using [live] customer service as a competitive tool and winning,” he warns.
Nonetheless, it bears reminding: in 1980, many people were uncomfortable leaving messages on answering machines, but by 2014, people were completely comfortable having conversations with their phones via virtual personae such as Apple’s Siri.
The competitive landscape
A number of players in the travel sector are trying to step into this coordinating role. Airlines, the hospitality industry and online travel agents have been joined by data-centric companies like Google and Amazon, along with a host of start-ups.
Travel-sector competition
Often through loyalty programmes, hospitality companies provide booking access to other parts of the travel chain: offering special deals, rooms at a discount and the ability to pay for related services like rental cars with points. While still embryonic, these efforts demonstrate that hospitality is making a play for owning the full trip. And the prowess the industry has demonstrated in profiling guests, differentiating market segments with ever greater precision and personalising the customer experience with increasing success makes the industry a formidable competitor.
On their websites, airlines often offer specials or package deals. Increasingly, the flight-booking process includes or leads to click-through options, connecting customers to partner providers of lodging or rental cars.

[
[
25
Meanwhile, online travel agencies range from those specialising in a particular segment to more comprehensive, but still-not-complete, booking services; others are offering added value by bundling in access to a travel advisor to help coordinate the trip and deal with problems. The online proliferation of what appear to be one-stop travel shops obscures the fact that far fewer companies are running the back end of the systems, whether hardware or software.
Branded services compete on price, but almost never have access to the full range of options within a travel sector or across the full trip. Some airlines, for example, require that bookings be made through proprietary websites. Entities like national railway systems can have similar policies. The struggle for all of these portals has been to differentiate themselves, to be seen as something other than wholesale travel warehouses.
Passengers left to do the work
But while customers are being offered a growing range of portals that offer to provide the full range of travel services, what they are really being given is a full box of puzzle pieces with which to assemble their own trips. Aggregation, putting everything in one place, is not the same as coordination, fitting all those pieces together. Nor does coordination necessarily mean personalisation.
Travellers have to build their own schedules, most often in a limited price range. Working within those requirements, they have to make choices about how they can personalise their trips. The information they have about a hotel or an airline, for example, will typically come from two primary sources: the vendor or experience. Vendor information may come directly from vendor websites or through various kinds of advertising. Experience may be personal or reported, either from a single trusted reviewing source or from online ratings and customer feedback.
Coherently organised and credible information — accurately matching services to need and preference — can help automate much of this process. Abundant information that is insufficiently organised just makes things worse. To be offered a choice in this sea of information can be more of a problem than a solution. Companies that can offer truly coordinated and personalised information will pose a far greater competitive challenge to airlines.
Big Data enters the fray
In April 2014, Google licensed the technology of Room 77; its mobile hotel-room search app combines price and availability search — across multiple travel sites — with detailed information on individual hotel rooms, including simulated views out the windows. Many analysts have taken this as a signal that Google may no longer be hanging back from expanding its role in the travel industry.
Along with the companies under their respective corporate umbrellas, Expedia and Priceline are the dominant OTA players. According to Skift, the online travel news and information service, their combined Google advertising spend in 2014 is projected to be nearly US$2.5bn, close to 5% of the search engine’s annual advertising revenue, thus making it unlikely that Google would go up against them.
Google’s Flight Search and Hotel Finder are not prominent and are only nominally linked. Google acquired ITA Software, a developer of fare-search technology, in 2011. However, no significant moves seemed to have come from this transaction. The Room 77 deal, however, is seen as different. The full set of tools the company now has at its disposal, moreover, make it one of the most serious potential Big Data candidates in the full-trip coordinator arena.
Other Google services, knit together, constitute an impres“
The challenge is making the data come alive, so we get a better picture of the
individual customer.”
– Jeff Foland, executive vice president of marketing, technology, and strategy at United Airlines

[
[
26
sive foundation. Google Maps is situationally aware, alerting drivers to traffic problems and suggesting alternate routes. Google reads online information like calendars and search histories, combines them with location data and then offers a stream of information likely to be contextually useful. And Google Wallet facilitates and tracks transactions. Smartphones with Near Field Communication (NFC) functionality — which enables “wave-of-the-phone” payment — could ultimately replace biometric ID and the boarding pass.
The role of “little data”
According to Mobile Commerce Daily, a majority of business travellers 30 and under now book using smartphones or tablets; they want to be able to book quickly and on-the-go. Price is still a factor in this demographic, but more so for leisure than for business travellers. Millennials (also known as the Millennial Generation or Generation Y) have been described as valuing experience over material possessions, expecting experiences to be personalised, paying a premium for “unique”. They gravitate towards whatever travel services or vendors can best meet those criteria, whether for discrete segments or for the full trip.
Room 77 is part of an ecosystem of what might be referred to as little-data companies that promise highly data- centric services — often focused on a specific part of the travel chain, but with some on the full trip. They are a direct response to the travel needs and expectations of millennials: speed, mobility and maximum personalisation with minimal effort.
Another such start-up, OLSET (“all set”) currently focuses on hotels and harvests customer data from the Web — from social networking sites like Facebook. Claiming to profile hotels with a much higher degree of specificity than other such services, its website lists “design/boutique,” “green/sustainable” and “unique,” among almost 30 preference descriptors. OLSET can be used as a hotel search engine; it can also be set to read customers’ calendars, anticipate trips and “instantly e-mail” a list of hotels that match the time and location with the customer profile.
Relatively small functions added to OTA sites — sometimes as a result of technology purchased or licensed from little-data companies — can also be significant and point towards potential problems for airlines. KAYAK Mix, for example, could be seen as the ultimate commoditisation tool: it constructs flights on a segment-by-segment basis to achieve the lowest price — round-trip from New York, New York, to Los Angeles, California, via Chicago, Illinois, could involve four different airlines.
Individually, these apps and services are not hugely consequential. Collectively, however, they show customers the services they are not getting from airlines or other providers. They also present the risk that a company like Google or KAYAK could buy them and weave them into a more comprehensive solution — a potential opportunity for airlines as well.
Competition and cooperation
How fast and how far Google will proceed is unclear. Facebook and Amazon both have their toes in the travel pool, though neither has made serious integration moves. In this context, the hospitality industry and airlines have a common interest in not having the travel business comprehensively disrupted by outside companies. Models are available that would permit them to

[
[
compete with each other in some ways and cooperate in others — for example, allowing limited reciprocal access to each other’s reservations systems.
As providers, the airline and hospitality industries have a number of advantages over outside entities, from the OTAs to Google. They have different, potentially complementary, strengths. Both know a great deal about travellers’ habits, needs and desires. Airlines, as the heart of the network that physically moves travellers from place to place, have a broader information map of where and how people travel. Hotels have more space, a greater range of amenities to offer and, therefore, more information about which are favoured by different demographic groups and under which circumstances.
Looking to the future
Nawal Taneja, professor emeritus at Ohio State University’s Center for Aviation Studies and former president of a small airline, has long stressed the importance of helping travellers manage the journey across the complete travel chain. While this expansion increases complexity for the airline industry, he does not see moving in this direction as optional, given the availability of technology to meet customer expectations.
“If the airlines don’t re-strategise and become either travel facilitators or solution providers to the problems that people are facing,” he says, “if they say, ‘we just fly seats from Airport A to Airport B,’ people will still travel, but they will buy their travel services through new intermediaries.”
Mr Taneja, author of the recently published book Designing Future-Oriented Airline Businesses, argues for a higher level of “customer care” across the full cost spectrum as well, stressing that helpful interventions can be high value without being high cost due to new technologies.
“We’re not just talking about sending limos to first- class travellers,” he says. “We’re talking about sending a taxi to an economy-class traveller or suggesting to an ultra-economy-class customer: ‘we know where you live; three blocks away is a bus station; that bus will take you to the subway, which will bring you to the airport.’ In other words, providing some sort of solution to the entire travel journey for the full spectrum of passengers.”
“My overall view is very positive,” he stresses, looking 10 years into the future. “Travel is going to grow in all segments: not only at the low end, but at the high end. The winners will be those [airlines] that are able to provide more customer-centric and personalised service.”
27
“The winners will be those [airlines] that are able to provide more customer-centric and personalised service.”
– Nawal Taneja, professor emeritus at Ohio State University’s
Center for Aviation Studies

The culture of aviation is fundamentally conservative and for good reason. If a car’s engine gives out mid-trip, that can be inconvenient and, in some circumstances, dangerous. If a jet engine gives out mid-flight, the consequences can be catastrophic. Pilots understand the seriousness of the basic risks inherent in their profession. They do not lightly assume unnecessary additional risks.
Aviation is a risky business to be in as well. Airline executives know, from long and bitter experience, that circumstances they do not and cannot control — and sometimes could not possibly predict — can devastate a company’s balance sheet within a terrifyingly short time.
Technologies come and go — promising fundamental change — most of them are quickly swept under the carpet, sometimes along with an airline or two that guessed wrong, invested too much, jumped too soon.
For airlines, a tenacious adherence to cost-cutting makes sense, but, at some point, it becomes counterproductive; a focus on costs begins to obscure the focus on the customer. Passengers do not want to overpay, but they also do not want to be underserved. They are seeing technology being used in other industries to increase choice, personalisation and comfort — they want all these when they travel as well.
Demand for an improved travel experience is well-documented, as is the increase in satisfaction when some of those demands are met. The J.D. Power 2014 North America Airline Satisfaction Study, released in mid-May, shows a positive trend in how customers feel about the airlines. Rebounding from a 2009 trough of 658 on a 1,000-point scale, customer satisfaction with the airlines reached a record high of 712. This still puts them well behind not only hotels (777) and rental cars (775), but even mortgage lenders (771).
In the press release that accompanied the study, Rick Garlick, J.D. Power’s global travel and hospitality practice lead, cited technology upgrades — such as onboard Wi-Fi and improvements in check-in procedures — as one of the factors helping to lower customer dissatisfaction with high air travel costs. Clearly, customers are willing to pay more if they get what they perceive to be better value.
Customers want solution providers: when moving from point A to point B is the problem, an airline provides the solution. When a trip involves any number of additional problems, the more of them that can be solved the better — preferably even before the traveller is aware that a problem exists.
Smooth the flight and the customer is grateful. Make the flight an experience that feels personal, one during which the customer feels cared for, and the customer is loyal. Accomplish this across all segments of a trip and the customer is astonished — both grateful and loyal. And that’s great for business.
28
Conclusion

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