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The biggest questions need the boldest answers. That's why we're using our global scale, technology expertise, and collaborative spirit to move towards a better today and a brighter tomorrow together.

Alok Jain explores the opportunity for aviation businesses to reinvent themselves and become more cost-efficient post pandemic.

 

What are some of the key challenges the Australian aviation industry is facing as it looks to reopen?

The aviation industry has three main sectors airlines, travel management and public infrastructure. To improve the customer experience, these three streams need to integrate better. But each sector faces its own challenges. The first, and most obvious challenge, is recovery from the ongoing coronavirus pandemic. The aviation sector in the ANZ region, which relied on air travel as a key mode of transport, has been more affected due to the extended border closures.

The pandemic brought in extra dimensions to a sector that was already complex. Borders opening and closing, changes in the travel rules with relation to quarantine and the vaccination status added to it. This made it difficult for airlines to publish schedules and operate on existing schedules.

Cost-driven operational decisions will be key to balancing of revenue and operational costs. Hence, automation efficiency will play a vital role and dynamic pricing will get a lot of attention.

Another challenge is the increasing focus on customer and workforce experience. Airlines will need to ensure frictionless travel experience for customers and workforce enablement. Health and safety will be paramount for both the workforce and customers. Due to increasing security and safety checks, flyers are now required to arrive several hours in advance of departure times. This provides an extra window for airlines to build and generate customer loyalty through focus on safety and wellbeing.

Another long-term challenge is to include personalisation of offers for travellers. Thus, the new world of dynamic on-demand product offer creation and distribution will become mainstream.

What is the role of technology in helping to address these challenges?

Operational resilience and having the ability to scale up and down, technologies such as cloud have become important. The pandemic led many operators to go for digital transformation using cloud-based services to harness real-time data.

Technology also plays a key role in engaging with customers and developing an elevated customer experience. In providing operators with an understanding of their customers’ personalities, expectations and behaviours, travel and tourism companies can provide targeted solutions and tailored experiences. Algorithms can help in personalising communication, offers and services, which can provide better loyalty and better yields.

But this needs data and analytics. Data platforms help companies gain quick insights on customers that lead to better pricing and experience.

Some operators also leverage the partner ecosystem with differing benefits across a range of sectors. Working with experienced technology partners such as TCS help operators leverage their contextual knowledge and solutions. Cross-industry partnership is the key, providing opportunities to create innovative business models and opportunities to share risk.

In essence, digital, data and cloud first technology initiatives will address many of the challenges.

As customers return to air travel in Australia how has technology changed the travel experience?

Keeping customer safety in mind, frictionless travel has become the biggest priority. Throughout the pandemic many operators invested in improving the customer experience. There is a sharp focus on providing context-aware interfaces that enable real-time communication and services. New age product platforms will enable better retailing to customers to handle dynamic needs.

For aviation transport operators, it was a rollercoaster ride of profit and loss, yet many of them invested in transformation programs. These transformations vary in scope but include a pivot away from long-haul to shorter flights, greater engagement with customers, and improved loyalty programs.

The aviation industry has been trying to push self-service to improve efficiency and reduce waiting times at the airports. The pandemic has taken this to the next level and turned into a need for the customers. Some regions (e.g. India) have mandated 100% online check-in. Wellness is another major aspect. This could include bringing in vaccine passports or virtual queues to reduce the physical contact at airports.

As these trends drive ongoing transformation, what are the key questions for the c-suite?

The major focus is on business growth to balance against cost-efficiency. The immediate priority for operators is to capture as much of the market as possible, as fast as possible with better efficiency. With the focus on digital transformation, innovation, data, and customer experience, their costs need to follow the CFO directions. Collaboration with adjacent industries to derive joint benefits is another key ask.

The current priority is to convert costs from Opex (operating expenses) to Capex (capital expenditure). This creates the need to understand how Capex spent on driving transformations can achieve its objectives. Keeping Opex flexible is a priority to enable a sustainable response to anticipated fluctuations in demand.
 


What role can technology play in supporting the new focus on cost?

Aviation transport operators are adopting cloud technology because of its capability to scale up and down while keeping the operational costs optimised based on demand. Data and analytics provide the ability to analyse customer and operational data. The third key role is cloud's ability to deliver customer personalisation. It helps businesses tailor products and services for specific customer profiles.

What are the main challenges for the c-suite in implementing these technologies?

Reducing risk of new technology adoption and control of the cost are some of the main challenges. The success of transformational programs depends on a well-managed and trained team. It is an investment that can be successful and cost effective for an organisation.

Reducing the time to market is another challenge that executives are focusing upon. Organisations don’t like to wait for long to see the benefits of these transformations. Executives want to put in place well-defined but scalable processes where outsourcing comes as a great advantage. It brings advantages of expertise and scalability with reduced stickiness.