Aviation Tech talks: are airlines still re-inventing the wheel?
With major malfunctions and system crashes in recent years, aviation is quickly gaining a reputation of being not that tech-savvy. While companies in other industries are racing to jump on the innovation train, are airlines still relying on old technology or are they attempting to re-invent the wheel? AeroTime asked Nevra Onursal Karaagac from Airline & Travel IT provider Hitit, what biggest game-changer software is here to stay - and lead - airlines to the future; the main differences among IT solutions that legacy, hybrid and low-cost carriers implement and, of course, is it true that when it comes to software, aviation lags one step behind other industries.
Taking into account that aviation tends to be quite conservative when it comes to technology what in your opinion are the areas where airline businesses need updating the most?
We have all witnessed the dangers of an airline’s software and technology base lagging behind: Just in the last couple of years, several major airlines had highly visible (and no doubt costly) system crashes courtesy of clinging to legacy platforms. Such legacy systems are essentially relics from the pre-Internet era at their heart where it counts, and the cracks are showing no matter how much polish is applied on top. While the rest of the world is quickly embracing a data-driven Industry 4.0 mindset in all matters, airlines still relying on legacy systems in this day and age are trying to reinvent the wheel.
While the rest of the world is quickly embracing a data-driven Industry 4.0 mindset in all matters, airlines still relying on legacy systems in this day and age are trying to reinvent the wheel.
But there is also another, less obvious drawback for an airline to have their software technology lagging behind the times, a drawback which I would say poses an even greater danger in the long term: If an airline does not possess the self-capability of “owning their product”, the ability to create and distribute differentiating and personalized offers, to collect and utilize the vast amounts of data at their hands, they face the risk of commoditization.
Today’s hyper-connected consumers find it increasingly easier to go through comparison shopping channels (which often provide personalized offers to boot), regardless of whether they are shopping for clothes or air tickets. In such an environment airlines are facing the very real risk of getting lost in the crowd and becoming just a faceless, nameless “aircraft operator” that is easily interchangeable when someone cheaper comes along in the next click. We believe that the answer to this issue lies in an airline’s ability to engage with their customers as much as possible, to offer a unique and personalized product, combined with a superb shopping and journey experience even when selling through intermediary channels.
Obviously such a feat is only possible with a data-driven and flexible software platform that gives airlines all the tools they need to differentiate themselves and to keep up not only with the demands of today, but also the possibilities of tomorrow. Airlines still residing in restrictive walled gardens where a GDS essentially dictates which parts of their own data they can access or how they can interact with their customers should take a serious look on updating their technology.
What does the future of airline software look like and what in your opinion will be the biggest game-changers in the upcoming years?
Biometrics and identity management are certainly going to play a bigger role in the near future to facilitate the vision of a seamless air travel journey. With industry organizations throwing their weight behind similar initiatives, such as IATA’s One ID, airline software systems will have to do their part to support this emerging ecosystem. In this regard we see great potential in blockchain applications as an essential part of this new paradigm which will require unprecedented levels of integration and interoperability across many diverse systems.
Last but not least, we feel that a lot of the airline software systems out there still have to catch up to the full potential of cloud computing, which is the crucial foundation that makes everything <…> possible.
If we look closer to home at the airline level, improved user experience through better engagement and personalization will become paramount. The airline loyalty programs of old with their static tiers and benefits will be replaced by machine-learning assisted, fully personalized smart service engines that will take good care of their passengers, be it doing automated check-ins or actually listening to passengers through chatbots and solving their issues in the blink of an eye.
Last but not least, we feel that a lot of the airline software systems out there still have to catch up to the full potential of cloud computing, which is the crucial foundation that makes everything mentioned above possible.
Justin Bachman from Bloomberg described airline IT operations as follows: “[…] the fact that most airlines deploy a mix of old and new technologies, building some just for themselves to do particular tasks while buying others from vendors. That makes the overall IT operation a motley collection of equipment.” Could you confirm or deny the claim?
The long standing “one stop shop” vs “best of breed” argument in the airline industry will probably outlive us all. The matter of the fact is running an airline is an incredibly complex business and while it is essential that all the different moving parts of an airline system play nice with each other, there can be no single provider that offers the most ideal solution for every airline in any case, making having a “motley collection” of different solutions inevitable.
That is why we believe the ideal solution is to take a hybrid approach, which we always strive to do with our own solutions: There are multiple areas of an airline operation that we are proficient in ranging all the way from reservations and distribution to schedule planning and departure control. If an airline is using several of our solutions they obviously come together to create a seamless whole, sharing data and functionality across the entire system. But we are also mindful of those cases where one or more components might be from different origins, and always put interoperability at the forefront of our technical architecture.
Offering airlines maximum freedom on how they wish to conduct their business is our guiding principle, and that means not only striving to provide the best possible tools for the job but also keeping an open mind and an open line of communication with the outside world. We believe the model of putting in place artificial restrictions and barriers as favoured by some traditional legacy airline systems is outdated and ultimately harmful to airlines, which need to make the best use of their data through real time availability and open connectivity possibilities.
You work with various airlines, including legacy, hybrid and LCCs. In your experience, are there any major differences among these three types of carriers in terms of software in use?
On the one hand, the two types of carriers on the extremes still exhibit their core traits: Legacy carriers treat their software as an inventory and ticketing system with a fare pricing and revenue management layer on top, while LCCs have a propensity for stripping their fares bare of every conceivable ancillary and then distributing direct, often eschewing things like GDS integration or interlining.
But on the other hand, every day we observe more convergence towards the hybrid model among these different types of airlines. We see increasing use of fare families and flexible bundles, which we call “some bundling” as a reference to a sensible step back from the unchecked “unbundling” craze. We see LCCs testing the indirect distribution waters with OTA and metasearch engine integrations, if not outright GDS. We routinely work with airlines of all stripes to implement merchandising and airline retailing approaches.
We believe that all of this points at some universal best practices emerging across different types of airlines to conduct the core part of the business, and therefore airlines are starting to emphasize personalization and user experience as key differentiators where they can apply their unique flavour. We also support this forward-looking approach through our highly flexible software platform and unrestricted data accessibility.
Nevra Onursal Karaagac is Chief Sales and Marketing Officer at Hitit, an Airline & Travel IT provider. Under the Crane name the company provides 12 software solutions divided into three categories of PSS, Operations and Accounting.