We have witnessed the Asia Pacific ( APAC) region experience significant growth in air travel over the past several years. Looking ahead, APAC is anticipated to see the most rapid growth in passenger traffic this year globally. According to IATA, projections indicate an annual growth of 4.5% in passengers form 2019 to 2040, bringing the regional total to over 4 billion in 2040, constituting more than half of the global demand for air travel.
As such, airlines in the APAC region are continuing to invest aggressively to modernise and expand their fleets, routes, and human capital. While the capital investment bodes well for the growth of the aviation sector and thereby the macro-economics of the region as a whole, the emerging challenge will be meeting the expectations of the modern digital traveller.
The Rise of the Digital Consumer
It’s been well publicised that post the pandemic, digitalisation has accelerated across all industries and has become a part of the fabric of our lives. Today, when a potential traveller looks to investigate a journey, they are influenced by best-in-class retail experiences with digital retailers. Today, the evolving digital traveller’s expectation has evolved from a transaction-centric to an experience-centric interaction. While planning a journey, typically, minimum consumer expectations include:
- Accessing offers across channels and devices seamlessly
- Being able to bundle and un-bundle multiple components that are relevant to the journey irrespective of whether these components are provided by the airline or a third party;
- Comparing offers across travel providers efficiently in a matter of clicks;
- Accessing all relevant information upfront regarding travel restrictions, health notifications and requirements in a convenient way.
These expectations have significant implications for the technology backbone that airlines need to deliver. They must lean on a best-in-class digital infrastructure that includes an elegant UX, built on a progressive and inclusive/open architectures deployed on the cloud to be able to facilitate workflows and transactions with a few clicks.
With the expectation of accelerated digitalisation, many industries are feeling the pinch of outdated technology getting in the way of keeping up with the expectations of their digital consumers. The aviation industry faces this challenge, caused by legacy technology stacks, monolithic architectures, static content and outdated standards. These constraints lead to an underwhelming experience through the life cycle of the customer journey.
A major technology refresh is needed.
Using technology to drive a best in class and personalised customer experience
The industry is gearing up for a shift towards a modern airline transforming towards digital retailing. One reason to accelerate into the airline digital transformation is the opportunity presented by matching products/services to rapidly evolving consumer preferences as a consumer’s growing desire to receive personalised offers and services. That said, investment towards digital transformation in consumer experience is key to keeping an engaged and active customer base. A Superior customer experience can be delivered through:
- The use of AI/ML chatbots to improve productivity and customer experience across multiple channels and parts of the customer journey.
- Building offers tailored towards the unique preferences of the loyalty member dynamically.
- Curating relevant bundles on the fly to upsell/ expand the share of wallet while including value added ancillaries.
- Maximising pricing parameters dynamically based on the potential and preferences of the individual customer.
- Proactively detecting and preventing fraud during the purchase process to minimize exposure for all parties in the transaction.
These tools are essential in an airlines journey to becoming a best-in-class digital retailer. They put the customer at the centre of the buying journey.
Digitalisation and personalisation will persist
The outlook of the airline industry in APAC holds great promise. The challenge lies in consistently meeting the evolving expectations of the digital consumer. We foresee that industry leaders in the next decade will invest and transform themselves through digital investments to expand market share, protect profitability and thrive through a dynamic and engaged customer base.
NOTE: Gautam Shekar is senior vice president and regional head for APAC and the Middle East at IBS Software.