2019 was another impressive twelve months for airlines. There was a record 39 million flights worldwide over the course of the year, and global flight numbers continued to rise steadily. Nevertheless, many longstanding challenges of the aviation industry remain and airlines are also tackling new problems in the global economy.
Here are 5 of the most important challenges of the aviation industry we saw in 2019.
Five challenges of the aviation industry
At Conztanz, we work closely with successful airlines like FlyBe to overcome airline industry challenges and future proof of their businesses. Here are five of the most common aviation sector problems we heard about from our customers in 2019:
1. EU laws changed how carriers had to collect information
Over the course of 2019, the aviation industry got to grips with the piece of EU legislation (the EU2016/681 directive) which immediately impacted airlines and the aviation authorities of member states (read our full article here). The directive was intended to help tackle violent crime and terrorism by requiring airlines to share information on all incoming passengers with the authorities in the destination country.
Airlines were required to forward all Passenger Name Records (PNR) to the destination country’s Passenger Information Unit (PIU), where the authorities would check passengers off against a database of suspected criminals and terrorists.
A good idea, in theory. However, making the directive work, in reality, is a huge technical challenge for airlines and national aviation authorities. It requires sophisticated systems to forward data in real-time – and many airlines and authorities still struggle to make the system work.
How Conztanz helped
With our API - PNR services, we were able to help many airlines and authorities to rapidly aggregate PNR data. For instance, The PAXGOV gateway, designed in partnership with the Luxembourg State provides a secure line of communication, allowing real-time data flow between airlines and EU authorities, thereby giving the most up to date information about who is entering a Member State. The gateway is already implemented within the state of Luxembourg which succeeded in rapidly comply with the new legislation – read the full story here.
2. Airlines felt the pressure to make more of their data
One of the biggest challenges of the aviation sector has been around adopting the standards of connected/internet-native business such as proposing personalized offers or providing immediate information and services linked to the travel context. But to do so, airlines have to develop smarter use of their data. Nonetheless, for many airlines the challenges of doing so still haven’t been resolved:
- Data is stored in multiple siloes
- It’s extremely difficult to centralize and match up information from different databases
- Collecting some data in real-time could also be an extreme challenge
All the same, consumers are now used to their favorite brands knowing who they are, what their preferences are and that they will provide tailored services to them. And they want a personalized experience (for those who don’t, GDPR rules protect them). Unfortunately, in 2019 most airlines still couldn’t offer even the most basic personalization due to the way they manage data.
How Conztanz helped
Last year, we pursued the development of our Travel Data Agility Platform (learn more here). The platform provides airlines with a powerful tool to support their passenger personalization efforts. It allows them to:
- Match up data from different siloes to get a full picture of each passenger through extensive use of APIs or our user interface.
- Get a better understanding of customers, their journeys and profiles
- Push this information into any relevant applications. To automatically push notifications to staff and targeted passengers for instance (e.g. special promotions or messages when there are delays)
3. Digital transformation remains one of the major aviation challenges
‘Digital transformation’ is an umbrella term that conveys a wide range of activities intended to help an organization use digital technology to enhance productivity, boost operational efficiency and increase profits. For one airline it might mean digitizing paper processes to smart devices and apps, for another, it might mean adding a social network as a new channel for customer interaction. There’s no strict definition of what digital transformation should look like, but it requires airlines to focus on using digital technology to keep improving their offering.
Nonetheless, making digital transformation a reality remains a challenge for many airlines, especially those without major IT budgets to splash on custom-built technology. As a consequence, for smaller airlines, in particular, there’s a real threat that larger competitors who have invested in digital transformation will have a major advantage over them in the years to come.
How Conztanz helped
Throughout the year, we’ve been using our blog to explore what digital transformation means – looking at the airlines and industry players that have begun putting their own digital transformation strategies into place. We’ve also been leading numerous discussions with major Airline IT players (Sabre, PROS, SAP, Travelaer) to understand the industry’s needs and gaps in the ecosystem. We also partnered with major CRMs like Salesforce to further enhance our offerings and make the digital transformation that much easier.
As a consequence, numerous enhancements have been identified for our Travel Data Agility Platform, ConztanzOne - such as new APIs and new connectors - to give airlines a platform that fully integrates with their IT environment and therefore eases the launching of their own digital transformation journey.
4. Customer Experience became a battleground for customer loyalty in the airline industry
2019 was quite possibly the year of customer experience in the aviation industry, with airlines across the globe looking to make their offerings more personalized and unique to the needs of individual passengers. However, effective passenger personalization remains one of the biggest challenges of the aviation industry, as our CEO Bertrand Kientz was already explaining in May 2018 in his interview with Forbes.
For decades, airlines have focused on operations – getting the airplane, baggage, and passengers from A to B – and not on creating personalized and unique customer experiences. Where once that would have been enough, expectations of personalization are increasing, and so the airlines which can make their passengers feel special will almost certainly come out on top.
How Conztanz helped
Throughout 2019, we worked hard on connecting the data with the major CRM players, first in line Salesforces and Zendesk. We have enhanced our analytics in our OneProfiling module which intelligently captures data from multiple databases to build customer profiles. New algorithms have been introduced to enrich profiles of all an airline’s individual customers and providing new “experience tags” (in addtion of those already existing “most delayed customers” or “behavior tags” such as “high-spender / low spender”.
Our data scientists have also enhanced our powerful clustering techniques to identify groups of customers with similar attributes. This helps the airline segment their customers, and learn more about them – which can be used in operations, sales, marketing and even in website experiences. To learn more about OneProfiling, read our introductory blog here.
5. The vision for NDC remains a vision for most
Once implemented, the IATA’s New Distribution Capability (NDC) standard will improve and enhance how customers make bookings. A passenger booking flights with Airline X through a travel agent will now also be able to choose seats and ancillary options while still using the travel agent’s website, for instance.
This is all good news for the industry, yet so far NDC implementation has lagged due to a lack of traction and technical challenges in its implementation.
How Conztanz helped
Contztanz has been working with a number of airlines to begin implementing NDC. to get a taste of what it involves, read our introductory blog here.
New decade, but persistent challenges for the aviation industry
As we begin a new decade, the aviation industry has much to look forward to. With the ever-increasing demand for flight and innovative new technologies on the horizon, the new coming years are set to be very exciting. Nevertheless, to achieve its potential, airlines, airports and subsidiary companies need to overcome the challenges of the aviation industry sooner rather than later.
Ready to start your journey? Contact Conztanz today.