How has the airline industry, both nationally and internationally, changed in the last ten years?
The changes have been huge. Carriers worldwide have faced increased fuel costs; government, regulatory and security issues; major changes in the competitive landscape; and shifts in consumer travel behavior.
Security needs have completely changed flying in the U.S. Low cost carriers have altered the economics of flying in Europe. And rapid growth in Asia has airlines struggling to keep up with demand.
In fact, the biggest challenge for airlines worldwide will be whether they can continue to change in time, for the times.
How has the automation of services affected the overall flying experience?
Years ago, airline automation was focused primarily on the behind-the-scenes processes for making travel happen — reservations, ticketing, payment transactions, schedule management, etc.
The next big wave in automation, and travel technology overall, will focus less on “the process” and more on “the people.” Moving forward, it will be more about how technology can enhance and improve the travel experience from booking to baggage.
Technology will deliver airline customers an engaging, more “humanized” interaction. This could mean personalized travel itineraries pushed to your cell phone or digital “identities” to speed security clearance or personal GPSs to ease navigation of airports and destinations.
It’s ironic that technology will ultimately deliver a more “human” experience in travel. But it will be critical if airlines hope to continue to successfully meet the needs of future customers.
What is the primary business philosophy dominant in the airline industry today? Will this philosophy change at all in the next few years; is it already changing? If yes, how?
Running a safe, efficient and profitable operation is the business objective of every airline. But they have differing philosophies on getting there.
Over the past few years, U.S. airlines have been focused primarily on regaining financial stability. But with bankruptcies behind them, many are now re-focusing on their passengers and on the future of their business.
We will start to see a renewed focus on the passenger and on the overall travel experience. This will be key for airlines who want to stay competitive and continue to build a healthy bottom line. Airlines are also focusing more on technology as an important component and investment in their future. Inefficiencies in outdated technology have hindered airlines from quickly and easily making business changes. New generation technology systems are being put in place today, however, that will enable airlines to adapt quickly, evolve and better serve their passengers.
What are the primary challenges that airlines are facing today –what still needs to be done?
Airline executives have a tough job, whether they fly domestic or international, network or low cost operations. Fuel costs, security issues, competition, and consumer behavior — all of these factors will continue to pose challenges.
But definitely in the U.S., travelers are becoming more frustrated with — and more vocal about — poor service and delays. Airlines recognize that they will need to make changes to improve the travel experience and meet the expectations of their passengers.
Another critical challenge: the lack of much-needed modernization of our nation’s air traffic control system, largely due to the lack of government investment. Built in the 1950’s, before the jet age and advances in avionics, the ATC continues to rely on radar and analog radio in a satellite and digital world. Unless improvements are made on these strained systems, continued growth in air travel — both commercial and private –will result in increased delays, loss of revenues, and overall hampering of growth in air travel.
What particularly innovative changes can flyers expect to see in the near future?
Expect more choice and options in how, when and where we fly. We are seeing innovations in seating, comfort and amenities, especially in the business and first-class cabins. Many airlines are also offering more in-flight services and entertainment, including access to the Internet.
Increasingly, airlines are also experimenting with “a la carte” offerings — giving passengers a choice of fare groups and then letting them add or deduct additional services such as premium seat selection, bonus mileage, access to airline lounges and the like.
Continued innovation represents an important opportunity for travelers to get what they want while enabling airlines to differentiate themselves and build brand loyalty.
Companies across a slew of industries seem to increasingly be prioritizing the customization of services these days. How is the airline industry responding to this trend?
Customization is definitely an area that airlines are exploring. Every passenger is different so, theoretically, every travel experience should be different. Some passengers want a “touchless” experience while others want the attention of a real person. Some want a guaranteed aisle seat, while for others more overhead space is tops on their list.
Customization improves customer service and profits. We will likely see more of this as airline business models — and the technology that powers them — continue to evolve. Done correctly, it can make the difference between a customer choosing Airline A or Airline B. With competition getting stiffer, delivering a travel experience tailored to the traveler’s needs and expectations will make all the difference.
Robert Buckman is an expert blogger for FastCompany.com and the Director of airline distribution strategy for Amadeus in North America.