First Published, 7th April 2016
Ai Editorial: Airlines acknowledge the need to re-engineer their internal processes to get closer to personalisation. But it doesn’t mean one needs to do away their PSS. Ai’s Ritesh Gupta learns more about the same
I recently interacted with a Systems Engineer, who has spent 30 years in our industry. He has the experience of flying with over 100 airlines, and has been to over 160 airports. Going by his expertise, it was pertinent to know to what extent a Mainframe Systems Architect gets recognized? Is it strong enough for a personalised experience? And also, how to deal with a legacy PSS regarding the same?
Retailing and airlines – no match yet
The conversation initiated around the necessities of a modern retailing infrastructure that airlines need to deploy.
“I sometimes wonder if all this talk about “retailing” in the airline industry is really relevant. Most passengers don’t even know what type of aircraft they are flying on. They couldn’t tell you if it was an A320 or a Boeing 737. In some cases, they don’t even know what airline they are actually flying especially if they have booked/ had booked a marketing codeshare segment. They just want to get from A to B as cheaply as possible.
The airline sells the seat and gets the passenger from A to B with a (variable) amount of service. Finally they deliver the baggage,” he said.
He added, “But, there is a case apart. That is the “real” frequent traveller who is loyal to a single airline.
That traveller can be in a minority of 5% of passengers who provide up to 80% of airline revenue. To serve that critical minority of passengers better, I see the airline strategy of moving those passengers onto the web channel where they can be offered personal discounts on flights, increased baggage allowance (if it is noticed from the datastore that these passengers regularly travel with lots of baggage), offers to sporting events and on other goods and services.”
Hotels are doing it
He said this already happens outside the airline industry.
“I am a Gold Member at Accor Hotels. The price I get offered on their website is often - not always - lower than anything I can find on hotels.com or booking.com. Accor knows my movements, my likes (top floor room) and my preferences - I always take breakfast in the hotel. And they serve me well. When my wife’s dress was left in a hotel room recently, they took care of it and returned it to us. Would they have done that to a non-Gold Card holder? May be not.”
The way airlines can do the same
“Knowing the customer” is an oft quoted cliché, he said. “The airline industry must invest in taking all the rich, but raw data that is collected on the core PSS system, analysing it for their most frequent travellers and producing tailored offerings for those key passengers.”
Citing an example, he said, “Wouldn’t it be nice to greet a passenger whose previous flight was delayed or had problems opening the door with an offer when they next travel.
“Sorry your last flight to Paris was held for 20 minutes waiting for a Stand Mr. Gupta, can we offer you a Duty Free Voucher for 30 USD today before your flight?”
It can be done, he asserted.
The driver is getting to know the top passengers much better than at present.
The data is there.
“Offload as much data as possible. But keep the mainframe for its phenomenal message processing capability.
Use the data which is there on the mainframe, but do that analysis offline,” he said, referring to what all needs to be done to ensure that an airline ends up with prudent IT decision-making, and doesn't undermine the role of a PSS.
“The core PSS is not the place to analyse that data, but it can be the place to place the offers and incentives to the passenger face to face – perhaps better than anonymous e-mails after the flight which are invariably deleted as not many have the time to read all their mail these days.” Empowering airport customer service agents with valuable key customer information is key to that, he said in his parting message.
Keep PSS aside, don’t expect everything
A section of the industry clearly stipulates that the key lies in separating the core PSS capabilities, which are essential to running any airline, from technology that enables true brand and product differentiation.
As for making most of the data strategy, and coming up with actionable insights, an industry executive indicated that he would rather focus on real time PSS data reliable interfacing to the external contemporary system where the proper data aggregation could be maintained. He said the major problem lays in data aggregation as it comes from different sources such as human input, legacy systems, web based modern tools. We are not limited by technology as there are already systems available on the market which can process personalized communication with the individual passenger, using highly customized and sophisticated business rules, but again the problem lays in data quality. The only solution is to build the independent modularized system which will help to compete on the market, and this would pave way for personalisation, too.
Hear from senior industry executives about how airlines are gearing up to improve IT-related decision making and foster loyalty at the 10th Ancillary Merchandising Conference (to be held in Barcelona, 21- 22 April 2016)
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