Digital transformation is not new. So why are we all talking about it? Although aviation was one of the early adopters of innovation it seems the industry has been slow since then. The industry relies on legacy systems that operate in silos. The data that could be the “secret sauce” to an airlines’ enhanced operations, profitability, and customer service, isn’t consolidated into data management solutions, nor is it available for all business users.
Cirium’s mission is to help the industry accelerate digital transformation—to free such silos and make data accessible so airlines, airports, and travel companies can unlock powerful analytical insights.
To explore the topic and gain insights from an expert panel, Cirium held a virtual event on July 15, 2021—Cirium LIVE: The Digital Future of Flight—with guest panelists Judith Pitchford, Head of Travel at AWS and Daniel Stecher, Vice President, Airline Operations at IBS Software, who joined Cirium’s Head of Product Management, Jim Hetzel, and Niha Shaikh, Senior Product Manager.
To view the full Cirium LIVE virtual event, click here.
The event highlighted seven key topics
1. Aviation will never be the same—but will be better
“Crises typically expose weaknesses and COVID-19 has accelerated the move to the cloud as airlines look to thrive and prepare for the future. Now more than ever airlines are looking to do more with less. Moving from a capital expense model to an operational expense model.” Judy said.
When travel demand dropped, airlines started to accelerate their focus on operations and automation, as well as the customer experience and ways to delight customers and increase loyalty.
|“COVID-19 will not be the last crisis our industry will face. For the airlines, it’s about agility and having a new mindset. We have always heard a lot of reasons why something wasn’t possible, but the pandemic has acted as a catalyst to make things possible.”|
Daniel Stecher, Vice President, Airline Operations at IBS Software
According to Jim, “The airline industry has been forced to adjust how it plans, sells and delivers flights. Many of the assumptions used to create the foundational data are no longer reliable. It’s time for airlines to reset and reboot.
2. Aviation has its blind spots
Airlines were early adopters of innovation—the mainframes of the 1960s, the distribution systems in the early 1970s and e-commerce in the late 1990s. But, airlines are complex organizations—operating a flight from point A to B is non-trivial, and let’s face it, legacy systems worked.
Judy said “There hasn’t been enough of a real advantage to change, as some airlines grew or merged, the spaghetti diagram grew, and many questioned spending money on a problem that didn’t exist – or why modernize and risk making something worse? But this, in fact, is the biggest blind spot.”
Airlines have always been susceptible to disruption—weather issues, geopolitical events or union strikes—but nothing prepared the industry for its worst downturn in history. It’s uncertain when or how travel will return, or how many will travel for work?
Some legacy systems have been around longer than many of us in the industry have been alive. Airlines must become agile in order to stay ahead of the competition, differentiate themselves, and innovate on behalf of their customers—this is how airlines will survive in the new world. Judy said, “agile companies are better prepared to adapt to market changes – and thrive, and the good news is, companies can learn to be agile – so maybe that’s the silver lining.”
3. Collaboration is key—for efficient operations and customer experience
“The industry has started to change the culture around collaboration, not just within an airline, airport or air navigation service provider’s organization but across the airlines, airports and ANSPs (Air Navigation Service Provider) network. These are the three biggest stakeholders to improving traveler experience,” said Niha.
The industry is connected—what happens at the airport impacts what happens with an airline. However, the industry is not connecting in a way that drives each companies’ efficiencies.
|“The difficulties do not lie with technology—the tech exists. The difficulties lie with sharing data, agreeing on data ownership, and seeing that the end goal is really what’s best for the traveler. The airline industry is data rich and insights poor.”|
Niha Shaikh, Senior Product Manager, Cirium
Collaboration is also a key driver to customer loyalty. Traveling will be different; the loyalty programs will need to be different and the benefits for lower passenger numbers needs to be different. Speaking to this, Daniel said “Airlines need to innovate daily in favour of their passengers. Software is helping to improve loyalty programs, driving a very agile development and more innovative approaches to loyalty schemes.”
4. You can share data and be secure
Security and data privacy is clearly the life blood of the industry and protecting data has become more important than ever.
“This is even more prevalent now as airlines are increasingly migrating to the cloud. AWS is vigilant about privacy and security and have implemented sophisticated measures to protect customer’s data. This is also where scale comes in. With millions of active customers, whatever we learn from an attempt by a bad actor will benefit all customers,” said Judy.
Many companies have proven that data can be secure—it’s more about the way the data is used.
“It’s no longer possible to function in isolation—especially with the advent of cloud technologies and banking coming to the cloud. There are many cyber security frameworks and certification processes now and I think the benefits that you get, far outweigh the risks of not doing it,” said Niha.
5. Data silos between commercial planning and revenue management need breaking
|“As commercial planners or network planners are building new schedules there’s going to be a lot of pressure to make sure that we schedule effectively, creating economical schedules that help generate revenue. We need to take what happens in everyday operations and plug those numbers into the network planning side of the business to build more resilient schedules.”|
Jim Hetzel, Head of Product Management, Cirium
Using data to build more collaboration will enable the understanding of actual flow and block time, which can be brought in to help commercial planners to build more realistic schedules.
According to Jim, if real quantifiable data to network planners, they will be able to build schedules that mirror reality more closely than it does today. And at the same time, still maintain the level of resiliency in their schedules to avoid disruptions and drive a more efficient operation. This will of course also improve fuel burn and help support aviation sustainability targets.
Cirium is collaborating with partners to improve airline operations, and is developing fuel burn and CO2 emission models matched with flight data. IBS Software is equipping airlines with aircraft routing optimization technology to avoid unnecessary CO2 emissions.
6. Air travel can learn a lot from other industries
“The airline industry can really learn from the mobile communications industry and from all of the Silicon Valley companies. Those which have created fantastic ecosystems and who manage billions of customers worldwide—they know exactly what their customer wants,” said Daniel.
Niha draws on the banking sector and the rise of challenger banks like Monzo and Starling.
“These industries have a lot of parallels as they are both heavily regulated. These banking companies have done away with legacy systems and built new. They elevate technology for the modern consumer and overcome the challenges with the security of managing data in cloud technology.”
7. Airlines that thrive are driving digital-first strategies
Many airlines are embracing digital transformation, including what data they are using for decision making, migrating to AWS cloud and managing aircraft fleets, pilots and cabin crews with IBS software.
“AWS is working with many airlines such as Korean Air, Qantas, Ryanair, Southwest and United Airlines, all who continued their digital transformation journeys throughout COVID-19. It is a business decision to have data and technology as a driver and not a cost centre,” said Judy.
According to Daniel, American Airlines Cargo is a role model in leadership and before the pandemic the carrier was pursuing a business transformation. The focus was to break down IT silos, going from 90 different cargo systems to just 10. This meant the airline even sought opportunity during the pandemic. Daniel referred to this as “bringing the house in order.”
On the data-side, Niha highlighted the power of data in all of this: “We need to unlock the insights using the data—contextualizing and telling the story of what happened for the entire journey of a flight. To truly understand what is going on we need to free the data silos—the schedules, flight plans and other ACDMs—this will be highly advantageous to decision-making milestones.”
And when it comes to the start-up airlines that are increasingly entering the market now—Avelo, Breeze, Connect Airlines and EGO Airways—they have a clear advantage. Starting from the ground up.
|“Start-ups have a cost advantage tying demand to the utilization of the system – they will use only what they need, they will be elastic – they can scale up and down based on demand, they be able to spin up services in minutes, and instead of spending resources on intrastructure management, they will focus on ways to differentiate their businesses, and innovate on behalf of their customers.”|
Judith Pitchford, Head of Travel at AWS
For those airlines with legacy processes and systems, the advice from the panel is to migrate to modernize, then use data to optimize and increase operational efficiency, and enhance the traveler experience.
The on-demand Cirium LIVE: The Digital Future of Flight virtual panel may be watched here.