Airlines depend on technology to safely operate aircraft. That dependence goes beyond the cockpit and airframe as airlines turn to technology to optimize all facets of the business. Some facets of airline operations that technology can analyze and manage are:
- Aircraft maintenance schedules
- Equipment scheduling and routing
- Booking systems and information processing
- Marketing and dynamic seat pricing
For airlines, time is a valuable commodity and maximizing productivity and margins is critical to drive profitability. Powerful technologies that can process large amounts of data and pivot in real time offer airlines a high tech advantage in a fiercely competitive and high overhead industry. With air traffic expected to reach pre-pandemic level in 2024, airlines are preparing themselves to fully optimize operations for maximum return on costs.
Managing Schedule and Equipment
When it comes to overhead driven businesses, airlines are at the top of the list. Constantly fluctuating fuel prices, increasing labor and maintenance costs as well as intense competition means airlines must maximize return on assets and at the heart of that is schedules and routing. Airline operators that utilize technology to manage schedules and routes can see advantages in controlling costs and increasing output from assets. Software can easily compute vast amounts of demand, operational costs and time data and create a more practical matrix for equipment and availability. Being able to identify a slower selling route in real time means providers could bring in lesser cost equipment while moving higher capacity aircraft to higher demand routes. Systems could also optimize timing of flights based on changes in equipment operational costs and traveler demand. More advanced technologies can track performance from day to day by referencing hourly operational costs versus revenue per seat and make adjustments accordingly. This type of data is invaluable when controlling operational costs is a top business priority.
Optimizing the End to End Customer Experience
Airlines know that the marketplace is fast paced and unforgiving. Competition for passengers among different brands is fierce and gaining any advantage when it comes to customer experience could mean the difference between clicking buy or abandoning the cart. Creating a logical and easy to use purchasing system if essential to maintain the online customer experience. Technology comes into play by providing easy to use tools and conveniences that allow travelers to easily make purchases and book travel. Some technologies being used to enhance the customer purchasing process are:
- Filling in information and ID forms quickly by scanning a document such as a passport or driver’s license
- API’s that can show competitor’s fares alongside the brand’s displayed fare
- Data analytics that can offer appropriate add services and products based on past behavior
- Monitoring technology that can check speed and security and make real time recommendations and changes to improve transaction flow
Customers could potentially show more loyalty to an airline brand if the purchasing experience is easy and straightforward. All processes and booking systems should be optimized for mobile devices as well as layouts and elements will change in the mobile environment. Ultimately, airlines that provide a seamless and logical booking process that is easy to understand and navigate will encourage travelers to make quicker purchasing decisions and decrease cart and page abandonment.
Maximizing Marketing and Aircraft Load
Airlines generate their revenue from fares collected from passengers and the correct and accurate pricing of available seats is critical to maximize margins and offsetting operating costs. Technology can be used to create dynamic pricing models that track demand, supply and competitor pricing to post fares that are competitive in the marketplace but still maximize dollars collected per seat. The ability to handle vast amounts of computations in a single microsecond means software can reference many different data points, including historical statistics and fares, purchaser past behaviors and availability across different airline brands to accurately establish fares for a particular route. Technology could also adjust fares in real time based on surplus seats or slowing demand for space on a specific flight. Systems could also directly market that surplus to specific existing customers that have past shown interest in that route or geographic area. Tracking of marketing data can also reveal purchasing habits of repeat customers and Airlines could create products or routes that cater directly to those travelers classified as highly profitable.
AI and Backend Technology
Artificial Intelligence (AI) is now a dominant concept in software innovation and design and brings many benefits to the airline industry’s backend technology needs. Some of the main features of AI that make a strong argument for employing the technology:
- Ability to process large and different types of data at once
- Technology can make unbiased decisions based on statistical facts and historical data
- AI can evaluate its own performance and make corrections and adjustments for more accurate solutions
- Models can perform tasks in microseconds and make changes to outputs in real time
Air travel is a fast paced business and the ability to pivot quickly to control costs and / or maximize margin gives airlines a major advantage in the marketplace. Utiiling AI based algorithms can yield long term operational and marketing benefits as technologies deep learn the business and can make decisions based on strict parameters set by the airline.
Technology Drives the Airline Business
Airlines use technology in many different ways. From the aircraft themselves to managing back end operations efficiently, specialized technology and software can optimize many different facets of the airline business. Some key areas that are benefiting from AI backed infrastructure are equipment scheduling and routing, customer booking processes and the very important, fare setting and marketing of seat supply. Learning technologies can process vast amounts of information and pivot in real time, offering airlines a distinct advantage when it comes to managing operations and marketing services to potential travelers. Airlines that employ dynamic technology may realize savings in equipment operation while maximizing potential revenue from fares. In a high overhead business such as airlines, saving money and time will greatly influence the bottom line in an environment of ever increasing operating costs.