Why Airlines Can’t Afford to Ignore Mobile

Written by Andrew Moore, COO, DAV Management

According to a report out in April from Oxford Economics and Amadeus, the global travel industry will see sustained growth of 5.4% per annum until 2023, outpacing expected global GDP of 3.4%. That’s good news as the airline industry remains one of the most competitive, with low margins and, in recent years, reduced airline passengers and rising fuel prices. With economic confidence improving however, there have been predictions of an increase in UK airline passengers of 33 million in 2014 alone. Fuel prices have also started to stablilise (albeit at a higher level). While these are clearly very positive indicators for the industry, moving forward airlines and travel groups must continue to focus on business efficiency and improving the customer experience in order to maximise margins and increase market share.

One particular issue highlighted in the Amadeus report was the importance of mobile technology services right across the airline industry. According to the report, mobile technology will be key to tapping into expected growth and services. The report also pointed out however that today the travel industry has yet to put in place strategies to harness mobile technology effectively. In other words, airlines have some catching up to do.

Andrew Moore

Mobile device and technology adoption remains explosive. According to IDC, by 2017 total smartphone shipments are expected to approach 1.7 billion units, resulting in a compound annual growth rate (CAGR) of 18.4% from 2013 to 2017.  In 2018, it’s estimated that there will be 4.9 billion mobile users, up from 4.1 billion in 2013. The Amadeus report also forecasts that one in five travel bookings in Europe will be made by mobile phones by 2015. According to another survey, which was conducted across 12 UK and international travel websites in January 2014, mobile web browsing of travel sites grew 42% year-on-year in January 2014 to 38.4% of all traffic. More than one in three visits to travel websites are now from mobile devices.

Today the majority of airlines have dedicated mobile sites. Figures from 8MS show that 76% of the top 50 airlines in the world use a dedicated mobile site.  22% of the top 50 airlines in the world, however, don’t have a mobile website at all.

Of course, a mobile strategy doesn’t begin and end with a mobile website. The real transformative opportunity of mobile is in opening the enterprise to value added and innovative services that can enhance its ability to reach its customers – whether through presence or location based technologies or more. It’s about understanding how best to interact with customers and then driving more value through the opportunities such customer interactions present. Anytime access to mobile is changing consumer behavior and offers a powerful channel for the airline industry to increase service (and hence loyalty) and add revenue.

For example, airlines can harness location services to detect when a customer arrives at the airport and send a greeting message welcoming them to the start of their journey and providing any additional information/alerts that will help to enhance their ‘day of travel’ experience.  There’s also the much hyped ability to push retail and other promotions that are available through the airport as they make their way to their flight. Personally I think these need to be very subtle as they could become very tedious for a significant number of travelers.  Arguably, the Holy Grail remains supplying the boarding ticket on the mobile device – speeding up the flow of passengers from check in to flight.  Essentially, it is about the complete customer journey, from reservation to flight, to arrival and greeting the passenger when they touch down and complete their journey.  It should build upon great pre-flight communication and services and provide an overall experience that motivates the passenger to fly with that airline again.

Not only can mobile technology be used effectively to make the travel experience more pleasant and seamless for travelers, it is also a powerful efficiency enabler for staff. American airlines replaced their pilot kitbag, which contained more than 25 pounds of paper based materials and manuals with IPads. This is much lighter and easier to handle for the crew, but more significantly the American Airlines Electronic Flight Bag is saving a minimum of 400,000 gallons of fuel per year???, which translates to an annual saving of $1.2 million. It has also cut down administration time. Pilots used to spend several hours each month manually updating paper manuals. Now, electronic updates only take minutes.

BA also uses tablets to improve service standards. Customer information used to be stored on pages of printouts. Today, flight attendants have access to customer data 24 hours in advance via an IPad, which is constantly updated, right through to flight departure, making customer service more streamlined and efficient. Roving customer service agents are also able to provide a more sophisticated and proactive service on the move and in the air. Final passenger lists, which are generally paper based, are also now operated by tablet, enabling staff to close an aircraft down ready for takeoff, all with the swipe of a finger.

While a select few airlines are leading the way, it’s clear that the majority of airlines still have work to do to capitalise on mobile technology as part of their drive to improve the customer experience and make internal processes more efficient.  Harnessing the power of mobile technology to deliver industrial strength applications that can streamline an airline’s business and enhance service levels is now a reality. And, more importantly, customers are increasingly expecting it.