Ai Editorial: Adaptive enterprises play infinite game – are airlines ready for it?

First Published on 31^st December, 2018

Ai Editorial: Airlines are finding ways to innovate and validate at speed. Ai’s Ritesh Gupta highlights what’s bringing about this change and why 2019 looks promising for the sector.

Are airlines evolving to serve their passengers the way they want to be served? Not just loyal flyers, but also other infrequent or even leisure travellers, who possibly could be boarding the aircraft for the first time. Are airlines set to break the shackles, drifting away from the approach of being process-centric?

It isn’t easy for carriers to evolve - for instance a top airline in the U. S. tends to have over 100,000 employees and not a straightforward task to embark on the journey of agile transformation, work out a data-driven culture or amend their indirect distribution and IT set up. Expectedly the total number of airlines coming up with exemplary moves might not be too attractive at this juncture, but considering the ongoing journey of Lufthansa, American Airlines, Air New Zealand, JetStar, Etihad etc., it is clear that the last year or so has brought about a positive change.

Refreshing approach

“Our team is playing an infinite game. We are focused on making decisions and building the long haul,” this is what an executive from American Airlines told me in an interview in the second half of 2018. “Adaptive enterprises survive and thrive to play the infinite game – adapt to the changing IT practices which ultimately results in code and execution quality responsiveness to market changes.”

When such organizations refer to cloud computing for scalability and high availability, software delivery changes (for example, a minimum viable product or test driven development), Dev Ops tooling and practices that improve code quality and speed of deployment etc., it means airlines aren’t going to be shackled by traditional ways of running an enterprise.

Transformation is reflecting in areas, where the passenger experience generally has been stifled by old methodologies.

An example of this being American Airlines working out better self-service capabilities in the event of a forced rebooking due to a cancellation or a major delay. This initiative meant refraining from allocating a new flight and seat to travellers in case of a major disruption. The goal was to let travellers be in control. Rather than travellers moving around and looking for a touchpoint to sort this out, shifting legacy customer-facing applications to the cloud ensured that travellers are now being offered a choice of replacement flights through the channel of their choice. Travellers can check and update their flight selection via the website, mobile app or at a self-service kiosk. This project involved the concept of a minimum viable product, use of microservices, test-driven development etc.

Adding new skill sets

An integral part of agile transformation is finalizing people with the right skillset, then nurturing creative, cultural and processual freedom to prosper.

In case of Lufthansa Innovation Unit (LIH), more than 90% of its team is from the start-up ecosystem. “This is a huge advantage. We understand that we have to build a lasting footprint and legitimize ourselves in the tech space first, even being a market-leading multinational with more than 60 years of experience,” says Gleb Tritus, Managing Director of LIH.

Also, airlines are focusing on recruiting staff related to the areas of engineering, growth, data science, and product. Then teams operate together as much as possible. They deliver very fast results, ensure teams are never afraid of trying new things and are offered ownership and independence in their functioning.  

Being ready as an organization

Managing infrastructure and domain-specific IT systems for retailing, real-time data intelligence, running a digital asset on purpose-built, multi-cloud set up, payment optimization etc. are among the initiatives that airlines are undertaking to keep pace with their customers in digital economy. But all of this wouldn’t really deliver till internal alignment is sorted.

Airlines acknowledge that it is extremely tough for an airline highly focused on safety and therefore naturally risk averse to transform immediately to one that has the risk appetite and agility of a startup. There are ways to gear up for the same. In case of Etihad, it is running two tracks simultaneously - one for running the organization as usual and one for innovation. Once a structure is finalized for agility, then the chosen teams make progress by counting on the talent and efficacy of self-organizing cross-functional teams. Agility is considered to be a mindset. Companies like Kiwi.com look for honesty, transparency, openness, ability to quickly adapt to a constantly changing environment, passion for travel, efficiency, willingness to fail fast and improve in their employees. Such approach can pave way for data shaping up critical decisions (Read more: Understanding the data journey of Jet Privilege).

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