In the world of air travel and aviation trends, a lot can change in ten years. At the start of 2010, digital assistants and tablets had yet to become popularized and artificial intelligence still sounded like something that only existed in science fiction films.
It’s inspiring to reflect upon the myriad of ways travel has evolved throughout the years and exciting to predict what will come next.
We talked to some of our industry experts to identify the changes that made the most lasting impact and the air travel and aviation trends set to make their mark in the year ahead.
Travel trends of the decade
Data and analytics
Although “big data” has existed since the early 1990s and it is unknown who originally coined the term, the concept certainly became more popularized in the 2010s. One could say this past decade marked the era where big data became “real” for businesses. Not only did it become more accessible through various software solutions and APIs, but it also became more integrated into daily processes. Data evolved from being a “nice to have” to a “must have” if companies expected to grow and thrive in the future.
“The past decade’s biggest challenge for commercial aviation has been to safely keep up with a rate of passenger demand that is straining the systems’ capacity,” says David White, Director, Market Development at Cirium. “The skies are crowded, the competition is fierce, and operational environment is extremely complex. Airlines and airports have had to get much smarter about how to use technology, data, and process to squeeze additional capacity out of limited resources.”
As the possibilities to retrieve valuable information have grown, so have the opportunities for answering more complex questions.
“Given that large airlines fly hundreds of thousands of flights every year, they’ve all got huge amounts of data to sort through,” says Megan Henry, Lead Data Analyst at Cirium. “Whenever you’re dealing with big data, you have to balance rigor against computing power. The more detailed your analysis, the more computing power you will need to run that analysis. Thanks to cloud computing, airlines have been given that extra computing power to take full advantage of the richness of their data.”
The sharing economy
Since the last global recession, there has been increased support for the peer-to-peer service market, which is now valued at $25 Billion and shows no signs of slowing down. Innovation through Web and mobile technology has enabled this level of success.
“Uber and Lyft changed the way that we as travelers get from point A to B when going by ground within a city that we are traveling to. Many times, we will choose them over a cab or renting a car,” says Nathan Greer, Sales Engineer at Cirium. “For the industry, this was the virtual genesis of the sharing economy in the travel space and has led to the growth of other sharing economy companies such as Airbnb and ZipCar.”
These changes have served as a wakeup call for travel management companies and travel managers. Shareability, flexibility and technology-driven convenience are essential characteristics of the future travel experience. For those who are smart enough to adapt, the sharing economy will continue to lead to new marketplaces, new booking processes, new partnerships and new connections.
New Distribution Capability
The NDC (New Distribution Capability standard) seeks to set “standards” around the end-to-end airline distribution process that will facilitate a more efficient system for the consumer to buy travel. It will also have a major impact on the Global Distribution System (GDS) business model.
“The rise and market acceptance of ‘you get what you pay for’ via passenger ancillary services has changed how the flying public experiences air travel,” says Charles Brossman, Senior Product Manager at Cirium. “It has opened the gate for airlines to personalize experiences on an individual basis and increase revenue in a competitive industry.”
Although the GDS is still entrenched in the buying process, dismantling how the industry has tracked and serviced a flight reservation for the past 50 years is a big undertaking. It pushes everyone in the travel value chain to rethink their processes and the data they need to provide a modernized experience. It remains to be seen whether NDC will shift consumer behavior from booking air through an agency to booking online, but the decade ahead will likely see it become widely implemented.
Multi-channel customer communication
In the same way Web and mobile technology has created new business models, increased connectivity has established new expectations for customer service. In 2017, 81 percent of consumers “indicated that their expectations for digital customer service are higher today than they were a year ago,” according to a Conversocial airline benchmark report.
Travelers not only want real-time communication, but they also want more actionable information. As a result, more data has been integrated into the end-to-end travel experience to create a more proactive, seamless interaction between customer and service provider.
“Travel is emotional, and business of all sizes were inspired to break the mold and start getting to know all the different types of travelers they serve,” says Carrie Mamantov, Director, Product Marketing at Cirium. “As companies have embraced customer-centered thinking, they have re-designed their operations to deliver a full experience connecting online and in-real-life. Brands, and their technology, had to mash up their data to understand customer behavior. We have seen new customer service models from airlines and hotels, incentives and services that match unique experiences.”
Enhanced aviation safety
Commercial aviation is statistically very safe. In fact, 2017 marked the safest year for air travel. However, the end of the decade did uncover growing concerns around safety.
In 2019, the grounding of all Boeing 737 MAX flights after the crash of Ethiopian Airlines Flight 302 and Lion Air Flight 610, highlighted the need to carefully monitor the performance and condition of aircraft and their parts.
Following the discovery of cracks to parts of some Boeing 737 NGs, the Federal Aviation Authority (FAA) required the immediate inspection of all 737 NGs which have flown more than 30,000 cycles. The response to the discovery of cracks on the Boeing 737 NG serves as an example that the strict and thorough regulation that governs the sector is working as intended.
“There is an increasing risk that the Boeing 737 Max return to service could go long into 2020,” says Rob Morris, Global Head of Consultancy at Cirium. “We will only see the true picture of its impact on the industry once the aircraft is returned to service, market acceptance is understood and the changes to the customer base becomes increasingly evident.”
Trends to watch in 2020 and beyond
Human-centered data and analytics 2.0
While big data and analytics became popularized in the previous decade, there is still a lot of untapped potential. The race to extract meaningful and valuable information out of new data sources has only just begun.
“The amount of data being generated by aircraft, locations and devices is increasing,” says Steve Wilson, Data Scientist at Cirium. “Getting this data wrangled and into decision makers should help make the industry more efficient. With this mountain of data being created—something like 100 billion GB annually estimated by Oliver Wyman—can be used for forecasting and predictions. Deep learning models that despite not being quite capable of general artificial intelligence, should prove really useful in reaching gains and improvements for the industry.”
If you think of data-driven intelligence as a series of phases, then 2020 will herald the human-centered phase of our data evolution. The previous phase was about using structured and unstructured data to answer questions after an event. The next phase will be a matter of anticipating behavior and providing answers before questions need to be asked.
Quality data is the foundation for any type of predictive capability. Now that the technology needed to collect, process, prepare and structure massive amounts of device data exists, there is a good chance machine learning could evolve enough in the next decade to monitor patterns and events in real time.
“There is already a focus on data collection and analytics to drive aftermarket service revenue growth for aircraft manufacturers, MRO service providers and systems suppliers,” says Andrew Doyle, Director, Market Development at Cirium. “The next step is development and deployment of predictive maintenance algorithms enabling replacement of critical components prior to failure, leading to a significant reduction in aircraft technical delays.”
Airline revenue management
The power of predictive analytics doesn’t stop at the physical parts of an aircraft. Airlines and airports are getting better at predicting consumer demand and optimizing price or inventory to maximize revenue growth. For example, airlines now have tools at their disposal to accurately forecast demand on a cabin level—thereby getting a look at their true profit in a market.
“If you look at the US domestic market, both American and Delta have come out with growth plans that are above the industry 3-4% growth rates,” says Greer. “Delta is managing this by upgrading to larger aircraft, while American is doing the same, in addition to reconfiguring aircraft with additional seats.”
Accommodating predicted demand isn’t something airlines will be able to do alone. It will take collaboration and connection across the industry to achieve new levels of revenue growth.
“Certain Asian markets are the fastest growing in the industry,” says White. “The challenge for the 2020s will be to expand the ability of airlines, airports, and ANSPs to share data and collaborate across the region in order to keep traffic flowing, passengers safe, and to deliver a quality service. Tokyo’s 2020 Olympics will be a good test for the overall network.”
A current barrier to increased collaboration among airlines and airports is the reluctance to share data. Trust and ownerships of data remain major issues in the industry; however, the key to making progress in maximizing revenue in 2020 and beyond will be a less restricted exchange of data. The benefits of this exchange will mean a more seamless journey toward developing more sophisticated, enhanced analytics.
“In the decade to come, I think we can expect to see technology largely improving airline and airport operational efficiency,” says Joanna Lu, Head of Consultancy, Asia at Cirium. “Data and information sharing among stakeholders in the industry will be improved to face the headwinds.”
It’s widely known people buy experiences, not products. In the decade to come, each part of the trip experience will be impacted through personalization powered by machine learning—from in-flight services to pre-trip planning and disruption recovery.
While the 2010s were an era for change in the way customer problems were addressed, the 2020s will be a time where brands get smarter about every single customer touchpoint. The next logical step after customer service is customer engagement. It’s no longer sufficient to quickly answer questions and resolve problems. The time has come to create ongoing interactions between customer and company, shaped by the customer profile.
“Airlines are stepping up their game to adapt and engage individual traveler types by analyzing their preferences, behavior and demographics,” says Brossman. “They’re launching new and exciting customer engagement strategies to interact with them. This makes customers feel noticed and appreciated, which is critical to building brand loyalty.”
Tailoring messages and services to individual travelers is the expectation right now, particularly among Millennials. Yet, most airlines and other travel service providers still don’t have the right mix of data, technology and people to achieve a personalized experience customers will remember. The opportunity to impress and win over travelers on an emotional level is still wide open
“Automated personalization will finally come to travel” says Mamantov. “A few airlines are getting all their data organized and breaking down the siloes to better link up the different dimensions of customer information. Look for loyalty to build with the brands who can predict needs and behavior based on the omni-channel experience finally becoming more actionable.”
Providers across the industry will endeavor to link their value to traveler data. From manufacturing to tech services, every part of the ecosystem has an opportunity to be valuable to airlines and travelers.
The travel industry has been one of the major targets of environmental criticism in recent years. Air travel accounts for about 2.5 percent of global carbon dioxide emissions, after all.
Airlines are already having to take stronger action to minimize their carbon footprint. In this new decade, they will also be expected to ensure fuel efficiency isn’t outstripped by growing demand.
“We are seeing the very early stage of electric aircraft now flying in Canada,” says Alistair Rivers, Director, Market Development at Cirium. “There will be pressure to reduce operations of current fuel operated aircraft. I live in hope of a coordinated single European sky from an air traffic control point of view as this has massive potential to save both fuel and time by allowing aircraft to fly more directly.”
Shaping an intelligent future
All innovations and trends start with an idea. Many of the ideas mentioned in this list could not be possible without the collaboration and passion of the right stakeholders. At Cirium, we want to work with our customers to help shape their next big idea.
If you’re interested in learning more about how we can help drive your business success in the next decade, please contact our team.