Special Report: The Future Face of Air Travel
The next generation of Simplifying the Business projects promise to further transform the passenger experience
Much has been achieved already by Simplifying the Business (StB) initiatives. Electronic ticketing has become a reality, self-service kiosks pepper every airport, and mobile boarding passes are becoming the norm.
And much more is still to come. The StB Think Tank has identified the goals and projects that will tie these initiatives together in an even more ambitious vision of the future travel experience.
“Customer needs dictate solutions,” says Eric Léopold, IATA Director, Passenger. “Some, such as a more comfortable seat, can be achieved at the airline level while others need an industry approach like StB. We need to offer the industry and its customers even greater value and even more opportunities. New StB initiatives will deliver efficiencies that will be very welcome in an industry operating on wafer-thin margins. If we improve the way we do business by innovating together, we can improve customer service and preserve healthy competition.”
Likes and dislikes
The first step in tackling the challenges ahead was an extensive survey of 3,000 passengers using social media. It was essential to understand the likes and dislikes of the existing air travel experience. While the results were not surprising, they did clarify the issues that were of most importance. It was found, for example, that 98% of passengers expect to be electronically informed and guided in case of disruption.
Armed with customer feedback, IATA put together a Think Tank to discuss the findings and offer a way forward. The StB Think Tank identified five goals, labeled: Airline Products; Passenger Data; Real-Time Interaction; Hassle Free; and A Seamless End-to-End Journey. It also put forward a number of potential projects that would help airlines provide their passengers with the journey they expected [see chart P28-29].
“We got everybody round the table to discuss the changes proposed by the new StB initiatives and the standards and projects that we needed to put in place,” says Léopold. “The idea of a seamless end-to-end journey cannot happen if everybody does their own thing. It would be chaos. This in no way compromises innovation. It only means compatibility and a seamless experience. Innovation builds on this simplicity.”
Léopold accepts that it was a challenge to get everybody—including airlines, airports, travel agents, and system providers—in one place. And it was harder still to get them to agree on something let alone bring regulators up to speed with new customer expectations. “But there was a realization that everybody cares about the end consumer,” he says. “There are things that we can do together that we cannot do alone. That is the common ground and that is the starting point of our strategy through 2020.”
The five goals and associated programs raise some serious questions about the future structure of the industry. Most obviously, changing the passenger experience will mean big changes for the airlines. Exactly how much change will depend on the decisions made by individual airlines about their level of participation. “Some will see opportunities in organizing intermodal travel, others will concentrate on certain ancillary services,” suggests Léopold.
Whatever the decision, it is certain that back office industry processes will be improved. The back-end structure of the airline business model was not designed with the new opportunities in mind.
“Take distribution,” muses Léopold. “Some 40 years ago airline distribution was ahead of all other industries thanks to its connected systems. Today, 20 years after the invention of the World Wide Web, these same systems have fossilized distribution processes and put airline distribution technology way behind most other industries, such as retail or banking, which are all customer-centric, merchandized, and personalized.”
John Thomas, Vice President, L.E.K. Consulting notes that some years ago United Airlines introduced Travel Options, a first step in giving customers more choice. “Most recently, Delta Air Lines has invested $250 million in technology that in part is manifested by its new website, which is designed with the aim of allowing customers to truly personalize their travel experience.”
Thomas believes that airlines are beginning to understand the ramifications of personalization. “Airlines are recognizing that merchandizing does require the adaptation of their existing business model,” he notes. “Traditionally, they have not been expert merchandizers but they are recognizing the need to bring in expertise in this area.”
“The most important part of designing outward 5–10 years is to make sure that the building has the flexibility it needs for technological and operational growth”
Personalization of the travel experience will necessarily transform airports too. The biggest question is airport design. One project that forms part of the StB Think Tank vision is Check-Out, the phasing out of the check-in process. As is the case with some low cost carriers already, a passenger will be considered checked in at the moment of booking. This will open up the whole front end of the terminal.
Designers working on airports now must model new terminal buildings based on the StB vision; there is little point in modeling their work on current successful facilities.
“The look and feel of the world’s airports has evolved over the years and so have the methods used to design them,” says Curt Fentress of Fentress Architects. “The most important part of designing outward 5–10 years is to make sure that the building has the flexibility it needs for technological and operational growth. Flexibility meaning that the users can react to new changes and evolutions of the market without having to change building structures substantially.”
Think also of the baggage systems, which will need to handle a pick up and drop off anywhere system, assuming passengers accept the idea. Dave Reynolds, Sales Director of Logan Teleflex, points to the attempt to put in check-in desks at the rail station, London Paddington, which has a direct link to Heathrow. The move never got much traffic and was eventually abandoned. But times change and so do passenger attitudes. A similar service is a great success in Hong Kong. If passengers decide to drop off bags before the airport and then request for a delivery service, baggage systems will have to be redesigned.
“For a start, you will need far more storage areas to deal with multiple points of origin and multiple destinations,” says Reynolds. “This type of warehousing will probably have to be set-up off-airport because of the space requirement. The system could be fully automated but it would be a major capital investment. We are not talking about an upgrade to existing systems but a complete redesign of the baggage process.”
It shouldn’t be forgotten that the Checkpoint of the Future is a big piece of this particular pie as well. This project will transform the security process. And as biometrics evolve there is the potential for even greater changes in security checkpoint design. Michael Ibbitson, Chief Information Officer at London Gatwick reveals the airport would like to install “at a glance” biometric recognition; a walk past camera that will identify a passenger against a pre-registered biometric signature.
Keeping in touch
“Connectivity will be the key to many of the StB projects. Ubiquitous Wi-Fi at airports to be in constant contact with the customer is a must”
Connectivity will be the key to the enablement of many of the future StB projects. Ubiquitous Wi-Fi at airports to be in constant contact with the customer is a must.
Customers need to be informed of changes in real-time and airlines and airports will want to add value to the customer journey. Connectivity will also come in the form of near-field communication (NFC). With NFC chips becoming commonplace in mobile phones, airports will begin investing in the appropriate readers in key locations. NFC provides smartphone users with the ability to simply walk close to a reader to have their details—such as the boarding pass—confirmed. “In the future, it’s possible that you will be able to walk into the airport and your mobile device will alert the airlines that you are in the vicinity of the airport and that you have checked-in, suggests Fentress. “This technology is continually in flux, and will rapidly change in the next few years.”
NFC is a powerful transformer when coupled with the idea of a permanent single token that is a personal ID, boarding pass, and baggage tag rolled into one.
A more physical form of connectivity will be linking with other transport modes beyond the airport. The travel experience will no longer be about getting from airport A to airport B in either business or economy.
Passengers now think and act in an intermodal fashion. The passenger doesn’t want to look into train timetables separately, to know which one to catch to the airport and at what time.
This is a change that has been a long time coming considering that London Gatwick was the first airport with a direct rail link way back in 1935.
Establishing joint standards with other forms of transportation will allow customers to plan point to point travel, perhaps even enabling a single ticket regardless of transport mode.
The channel of choice
The StB Think Tank vision of the travel experience in 2020 contains fundamental differences to the existing process. “The industry currently operates with a supplier-centric perspective whereas the IATA StB Think Tank work aims to make this a customer-centric perspective,” agrees L.E.K’s Thomas.
Delivering personalization can dramatically improve the economics of the industry through ancillary revenues and merchandizing. It also allows individual airlines to differentiate their product offering and stem commoditization of the industry.
For customers, contextualized real-time interaction with an airline will facilitate a dynamically packaged travel experience through the channel of choice.
They will drop their bags off at a convenient location, catch a train to the airport, walk through a less crowded facility barely stopping unless they want to, and board a plane looking forward to the meal and inflight entertainment of their choosing. At their destination they will be relaxed as they speed through immigration and make their way to the hotel where their bags will be delivered.