You can’t lock down the human urge to fly. After two years of being hammered by travel bans, the aviation industry is taking off again; June 2022 alone saw a 229.5% year-on-year rise in international air traffic.
Against this auspicious background, the World Aviation Festival (WAF) landed in Amsterdam between 4-6 October. With the skies above them thronged with passengers, 7,000 industry bigwigs gathered in the Dutch capital for the first in-person edition since 2019.
The world’s largest aviation event provides a forum for leaders from airlines and ancillary businesses to showcase their wins and take the sector temperature.
After countless presentations, product expos, panel discussions and informal conversations across the festival weekend, these are the five most important things we learned about aviation in 2022.
1. The airline industry is on the way back up
Aviation is recovering. Strongly. It was impossible not to pick up on the current of confidence running through the event.
The figures back up that sentiment. It’s not just passengers who are returning to the sector - employee numbers are booming again. The USA alone saw employee numbers in June 2022 exceed their pre-pandemic total by 3.21%.
These new people aren’t just flying planes and handling baggage. Airlines have set out on large recruitment drives to find the next generation of digital talent. 30% of openings at major carriers like United and JetBlue are for digital or tech positions.
Budgets are growing and diversifying. Airlines are pouring more money into a range of business activities that go well beyond core operations. Blockchain, AI, Augmented Reality and mobile payments were all hot topics at the conference. Clearly, air executives are turning their thoughts to loftier things than plastic-wrapped trays of food and snazzy cabin crew uniforms.
2. Sustainability is king
Aviation is not commonly seen as a green industry. No surprises there. But in 2021, IATA members passed a resolution committing them to achieve net-zero emissions by 2050. This is a huge undertaking that will require major changes in the way airlines do business.
At WAF, it was clear that the captains of the aviation industry now take this duty very seriously. Sustainability was a leading theme of the conference. Conversations around sustainable fuel and the shift towards green airports ricocheted around the vast hangar of the conference hall. KLM subsidiary Transavia’s venture capital wing used the event to announce their investment in the first wholly electric airliner, FlyWithLucy.
Air travel has a way to go before it reaches a truly sustainable footing. But WAF provided some salutary glimpses of what that journey might look like.
3. It’s about selling experiences, not tickets
The air travel sector has been relatively slow to embrace the personalisation revolution. The primary objective – to fill seats – has remained unchanged since the first commercial airliner took off from St Petersburg, FL in 1914. Detailed information about who occupies these seats (and what they do in the process) has been surplus to requirements.
This is changing. Airlines are finding ways to monitor customers’ preferences and behaviours before, during and after their flights.
If you’re a frequent flyer, everything from whether you normally check in luggage to your choice of in-flight entertainment is being recorded. Airlines use this information to serve you personalised offers, coupons, content, ancillary products and even fares.
The International Air Transport Association’s (IATA) New Distribution Capability standard (NDC) has created new opportunities for airlines and related services to share information.
This has all been made possible by a serendipitous consumer trend. People have fewer qualms about sharing their data with airlines than they do with tech beasts like Meta or Google. This willingness creates new revenue streams.
4. Airports are getting smarter
The physical dimensions of the aviation experience are changing to enable customer personalisation. Airports are gradually deploying the Internet of Things (IoT) to create new revenue opportunities.
IoT devices have obvious implications for operational efficiency in airports. Smart eGates can speed up the queue for passport control. Passengers can keep an eye on their checked baggage.
These little interfaces with the future will impress passengers up to the point where they become standardised. In the meantime, novelty value can help more specced-up airports differentiate themselves.
The IoT also has some directly commercial applications for air travel. For example, passengers in certain areas who have connected to the airport WiFi can be served notifications or content promoting deals at retailers or restaurants within that zone.
Thanks to the NDC, airports and airlines can share the data they’ve collected across each touchpoint. One day soon, every traveller will enjoy a seamless, personalised customer experience, in the air and on land.
5. Airlines need to think like global retailers
All these new touchpoints add up to a new potential business model for airlines. Instead of simply providing a seat on a plane, airlines can now take ownership of the whole travel experience. Personalisation, passenger data, behaviour analytics and the IoT all converge in a golden opportunity for airlines to diversify.
AirAsia has gone the furthest in harnessing this promise. After seeing its profits decline, the low-cost Malaysian carrier sought a radically new proposition. AirAsia’s flight-booking app served as the foundation for a new hybrid model. Instead of a traditional airline, the company now bills itself as a Super App for the South East Asian market.
Straddling the worlds of mobility and global retail, AirAsia offers a ‘one-stop shop’ for flights, hotels, tours, big-brand shopping, health screenings, insurance and more. The app leverages huge amounts of passenger data to streamline the customer journey.
An uncomfortably risky venture from a shareholder’s perspective, perhaps. But it’s paid off for them. Credit Suisse has nominated AirAsia as a top regional unicorn, with a current market cap of 2.56bn MYR.
Most airlines will be unable or unwilling to pivot so extensively into a new value proposition. But the tech recruitment drive indicates that many are looking to make greater use of customer data to offer retail and other third-party services, like accommodation and transport. Carriers like Ryanair and Southwest are leading the charge among Western brands.
Adopting a new business mindset
Redefining a big company’s vision of itself is no trifling thing. The business case needs to be watertight; communication must be clear as a mountain stream; stakeholder management requires a diplomat’s tact. But staying competitive means adapting to the times.
Endava has helped some of the biggest names in the aviation industry push the envelope. We help airlines improve their customer journeys, modernise their payments and build distinctive apps.
Get in touch to start finding your winning proposition for the years ahead.