Steve Peterson, IBM Institute for Business Value
Airline Interoperability – Better together, again
Global COVID-19 vaccine rollouts, the relaxation of restrictions on travel in some locations, and a well-understood hunger for a change of scenery among many, are creating an unprecedented surge in leisure travel demand. This development is putting smiles to the faces of both travelers and travel executives. By focusing on traveler safety, customer engagement, and health record management, the airline industry will continue to enable larger portion of the world population to laugh, live, and break bread without a screen or internet connection. Unfortunately, face to face engagement for business purposes is rebounding more slowly than the industry would like and may be on a trajectory to a different normal.
Succeeding in the different normal for an airline means adjusting quickly to new constraints and reacting quickly to seize new opportunities, all while maintaining excruciatingly low costs. Unprecedented cost pressures and expectation for hyper competition for slots, gates, and customers are forcing industry players to make fundamental adjustments to their underlying business models to find new ways to deliver more engaging services to customers while reducing long term capital commitments. Strategically, this translates into the need to atomize service delivery in order for the industry to become proficient at sharing work across partner ecosystems.
Setting aside the strategic challenges associated with finding the right travel ecosystem partners, seamlessly delivering traveler experiences, efficiently enabling employees across platforms, even when they wear different uniforms or extracting a share of the value delivered to customers, most executives will recognize that a common set of new skills will become essential, regardless of which strategic decisions are made. Specifically, travel providers must continue to improve their data analytics and urgently upgrade their interoperability capabilities. Etihad Airways, for example, hopes to make “customer journey to be a more safe, secure and seamless travel experience,” which will surely depend in large part on their ability to integrate new partners and capabilities quickly and easily into their existing travel platforms.
The realization that data is the new oil in the travel industry is well understood, but the case for a wide-scale interoperability upgrade is only just coming into view. The strategic value of being able to quickly form and dissolve loyalty programs with partners, for example, or the ability to quickly adjust codeshare arrangements to give customers access to new markets may well spell the difference between success and failure in the next several years. Identifying, and more importantly organizing effective go-to-market tactics with partners will enable leaders to seize profitable opportunities, while peers who struggle with interoperability may remain stuck in the mud of complex point to point IT connections and messy one-off partnership management. The future is coming too fast to be won using slow, costly, and reactive business models; tomorrow’s winners will be champions of streamlined data analysis, trust-based insight sharing, and quick deals. In other words, winning airlines will be masters of interoperability.