The travel industry has seen its share of setbacks and changes over the past few years. Yet COVID-19 is the biggest challenge the industry has had to face and there is still a long road to recovery.
The global pandemic has had an unparalleled and devastating impact on the aviation industry, with airlines grounding their entire fleets for months and many completely stopping operations. Although the domestic travel industry is moving towards some semblance of normalcy with uptake in intrastate travel in Australia and New Zealand, IATA’s latest figures predict that demand for air travel is unlikely to reach 2019 levels again until at least 2024.
COVID-19 has also fundamentally changed what passengers need and want from the flying experience – with hygiene and booking confidence now amongst the top priorities – and, with the ongoing threat of ‘second waves’ and further localised lockdowns, the mid-term future remains highly uncertain.
Despite this challenging backdrop, there are still opportunities for carriers to adapt their operations. But to give customers what they want, and to navigate the ongoing uncertainty, flexibility will need to become the new industry watchword.
According to Cyril Tetaz, Amadeus Executive Vice President Airlines, Asia Pacific, there are four areas where flexibility will be critical for the airlines surviving and having a shot at thriving:
1. Disruption management
With the virus outbreaks in the region, particularly Victoria and recently in New Zealand, COVID-19 policies are constantly changing. In such a scenario, flexible and effective disruption management should be a top priority of airlines, to maintain a high quality of customer service and to reassure reluctant flyers that it is safe to travel internationally again.
The highly unpredictable nature of the situation means that airlines need to ensure their disruption management systems are agile and can respond in real-time so that any changes are managed seamlessly from the passenger’s perspective.
The increasing ubiquity of mobile apps and wearables makes it easier than ever for carriers to communicate last-minute changes with their passengers. But the holy grail of successful disruption management is also to be able to offer alternative flight options, and short-term accommodation if necessary, in a matter of seconds and in a highly personalised way.
Technology will be critical to airlines achieving this at scale, with the latest breed of sophisticated inventory management systems – underpinned by big data analytics, machine learning algorithms, and cloud computing to allow real-time customisation for individual passengers in response to disruptions.
2. Cabin configurations
Over the past few months, many airlines have refocused some of their fleets to support repatriation flights, transport of cargo and medical supply shipments. Some even reported profits in Q2 by focusing on their cargo businesses.
Many repurposed their aircraft by adding additional cargo space to flight cabins and around passenger's seats to apply maximum safety measures. Agility has been key, through the seamless integration between airline systems from inventory to reservation, departure control, and offer management.
In the future, fully integrated systems would mean that even if unforeseen events like last-minute aircraft changes occur during operational windows, airlines can immediately and automatically reseat passengers and adjust weight and load balance. With end-to-end automated aircraft configuration and reconfiguration, airlines avoid expensive, time-consuming and resource-intensive manual intervention.
3. Increased choice through interlining and codeshares
The reduction in flight routes has led to increased consolidation and collaboration in airlines. As industry players across the value chain unite to survive, we expect interlining and codeshare agreements to become a mainstay of the industry, ensuring travellers still have as much choice as possible.
In addition to choosing the right partners to collaborate, for airlines to succeed, they will have to put in the right technology infrastructure. Dynamic customer identification, sophisticated airline policy control to automate flight schedules and codeshare agreements will be the key, as will the ability for carriers to easily work together and with third-party partners.
An example of this is Amadeus’ Altéa suite, which is an open system that allows third parties and start-ups to develop on top of the Amadeus technology. Crucially, this helps to fast-track development from concept to market, which is more important than ever in the current climate.
4. Flexible cancellation, rebooking and revenue management
Finally, reassuring travellers of the ease of cancellation and rebooking will be critical to tempting them back to frequent flying in the COVID era. Again, having a smart inventory management system is the key to making the cancellation and rebooking process as easy and seamless as possible for sales partners and the end customer. This includes using advanced availability management techniques, re-accommodation, seating, etc. It also helps maximize airline network yield, increasing revenues, and improving efficiency.
Carriers could also address any under-capacity issues by making it easier for their customers to redeem existing reward points. This can be another way to lure travellers back to flying and engender long-term loyalty.
Flexible, state-of-the-art revenue management will also be critical for airlines to move quickly towards recovery. They will need to shift away from models that use historical data in favour of real-time demand analysis and merchandising techniques to shape hyper-relevant offers. Airlines will need to be more responsive to the fast-changing consumer behaviour given the booking lead times are getting much shorter.
The use of artificial intelligence and machine learning algorithms in revenue management solutions can also help airlines build responsive models that can identify recovery patterns in different markets, country, and route levels, giving them an added advantage when travel gets back to normal.
Ultimately, despite the aviation industry navigating its greatest challenge to date, airlines can use this time to prepare for the future. And as some airlines have recently demonstrated, there are still immense opportunities for those who are willing to adapt to the new operating environment.
Flexibility should be the cornerstone of all carriers’ mid-term plans – building in a greater level of agility than ever before so that technology, systems, and staff can respond quickly as the situation inevitably continues to change.
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