Watch the skies: The 7 trends shaping aviation
Fly Me To The Moon, sang Frank Sinatra, a mere 50-or-so years ago. It’s pretty amazing to think that, what so recently was pure fantasy, is close to being a commercial reality.
With Start Design’s diverse portfolio of partnerships in the aviation sector – alongside Virgin Atlantic, Virgin Galactic, Air Asia, Hamad International Airport and Dubai Airports – we touched down at the Aviation Festival London keen to experience a bit of the fantastical, alongside the trend-watching and the tech.
Key themes in the air were a refusal to be defined by brand legacy and the need to reinvigorate in-flight retail. We’ve streamlined two busy days into seven aviation industry trends to watch.
1. Flying taxis are coming soon-(ish)
Our fantasy fix was supplied by Greg Williams, Editor-in-Chief of Wired, who gave us a glimpse into the drone- and jet-packed near-future. The world’s first dronecopter was officially unveiled last year by Volocopter, backed by parent company Daimler AG and the UAE. They’re claiming that app-hailed private drone flights will be a reality in the skies of Dubai by 2022.
It’s a crowded development space. Airbus is busy with its own version and Uber announced its intention to launch Uber Elevate – a flying car – and a more familiar ride-sharing version, UberAir, by 2023. It’s currently working with NASA to create an air traffic system. Airlines aren’t quaking in their boots just yet, though, as the drones will also have to clear some pretty big social, political and regulatory hurdles first.
2. There’s no such thing as an airline company
Air Asia is changing, “from a travel company to a tech company that happens to own an airline”. Jeurgen Keitel, Group Chief Director of Air Asia’s Global Affairs & Development put his cards on the table pretty early. (First talk on day one of the Aviation Festival 2018, to be exact.) This sentiment and ambition was echoed many times as one of the biggest aviation industry trends. “Airlines need to redefine themselves for a digital-first audience,” Keitel stated, “with product offerings that cover the entire travel ecosystem.”
Scandinavian Airlines EVP of Marketing, Annelie Nassen, says they’re already more than halfway through their digital evolution into a “lifestyle company”, all the better to drive revenue in ancillary sales. To bolster their proposition, they’ve created ‘Turi’, an AI travel assistant who can help with everything from packing to booking.
3. Beat the aggregators with better experiences
Sebastian Pichon, Travel Industry Manager at Google, warned that passengers are shifting their loyalties to aggregators, or their search channel of choice. “Invest in the experience of the brand,” he counselled, citing Hilton Hotels’ app as a best-in-show example that lets guest control their room temperature and even order room service before they check in. (It’s been so successful that 20% of rooms are now booked through it.)
Or, think like the opposition, advised Avi Golan, Chief Digital Officer at Air New Zealand. He explained they’ve created their own digital team in Silicon Valley to inject start-up thinking directly into the organisation’s bloodstream and to protect against the usual suspects – Google Flights and Facebook – and their ambition to steal traditional carriers’ customers. “Airlines must create compelling value propositions, alongside improved physical products and services, if they’re to become the first stop for consumers,” Golan insisted.
Campbell Wilson, SVP Sales and Marketing for Singapore Airlines was even more brutal. “Standing still is moving backwards,” he warned. Singapore Airlines has always focused on service, he explained, as it’s embedded in their national culture. However, they’re still innovating and investing in what they do best – using machine learning to identify top performing cabin crew and using this data to improve training and hiring.
4. Reinvent yourself for future passengers
Passengers aren’t just getting older. They’re more diverse, impulsive and demanding and they’re always on mobile. Three underlying expectations drive them – a frictionless user journey, hyper-personalisation and richer experiences.
That reinvention word cropped up again. “Airlines need to reinvent themselves to thrive in a more competitive marketplace. Customers are spoilt for choice and loyalty is diminishing,” warned Sébastien Pichon, Industry Manager, Travel at Google, quoting stats that only 28% of UK passengers felt loyal to any one airline in 2016 – down from 35% in 2011.
Jet Blue might be relatively youthful, at only 20 years of age, and still struggles for routes against the legacy airlines, but CEO Robin Hayes explained how they’ve succeeded by doing things differently. “Even a value carrier can be a pioneer,” he stressed. They’ve created a new market in the long-haul sector with their low-cost business class offering, Mint.
Similarly, Saudi Arabia’s Flyadeal began operating a mere 12 months ago, yet has seen huge growth, not by stealing share from rivals, but by tapping into the youth market. Con Korfiatis, Flydeal CEO, explained how they designed everything with a mobile-first, social media-loving audience in mind – with every seatback fitted with device holders and USB power as standard.
5. Hyper-personalisation must deliver value
In 1964, the same year Sinatra cooned Fly Me To The Moon, now-defunct Pan Am was the first airline to embrace the potential of data. IBM custom-built them a computerised reservations system, with a mainframe so huge it occupied the entire fourth floor of their famous midtown Manhattan building. It not only made seat reservations but also held useful data about relevant cities, airports, aircraft, hotels and restaurants – giving Pan Am a keen competitive edge.
With AI commandeering a large section of the programme at the Aviation Festival, it’s clear airlines are feeling the heat from outside the industry to better deploy the data at their disposal – whether that means predicting the alcohol you’ll most likely request, or what content you’re inclined to consume.
Akira Mitsumasu, VP of Products and Servicing for Japan Airlines, warned that, actually, there can be too much choice for the flyer. In their quest to hyper-personalise, they’re looking to UX mapping and design thinking to create new value propositions. Airlines have to “be more Amazon” to keep up, he insisted. In other words, to revolutionise, rather than just make incremental improvements.
6. Embrace innovation
Unsurprisingly, one of the emerging trends in the aviation industry is that innovation labs are now commonplace. With the bigger players, they often contain start-up nurturing programmes to help them get a stake in future disruptors, although younger airlines, less tied to legacy systems, are better placed to translate new technology into their businesses. Linda Jojo, CDO of United Airlines, acknowledged that “with technology, you shouldn’t be afraid to be a fast follower”.
Campbell Wilson, SVP Sales and Marketing for Singapore Airlines, vividly summed up the incredibly complex internal systems airlines run on. “It’s like a big tank of spaghetti and it takes a long time to carve it up,” she explained. To avoid this messy challenge, they’ve created a sub-brand value carrier, Scoot, to roll out some of their own innovations. A cloud-based airline, it’s perfectly pitched for the digital native consumer.
7. Reincarnate inflight retailing
These days, fewer than 10% of passengers buy anything inflight. With this figure falling year-on-year, and airports stepping up their retail offers to where the slickest are shopping destinations in their own right, the big three US carriers recently announced they’d be pulling the plug on in-flight duty-free.
But why should this be? When else do you have customers literally strapped down for several hours in your store? As the New York Times put it, ‘with sophisticated technology, you can sell to passengers in very personal ways’. Airlines could learn from e-commerce giants and predict and tailor recommendations – whether that’s a favourite clothing brand or a preferred in-flight snack.
Stepping into this gap in the market is Airfree, a duty-free shopping app, that won the Aviation Festival’s Innovation Dragon’s Den, as judged by SAS, Virgin Atlantic, Finnair and Air New Zealand. With an app white labelled by the airline, Airfree can make offers bespoke to individual customers’ profiles and itineraries. It delivers a simple and convenient commission-based click-and-collect service and totally removes the need for a the unwieldy perfume-stuffed duty-free trolley of old.
So what’s next?
With new entrants to the market and more competition from aggregators and alternative modes of transport, most of the aviation industry trends see stalwart brands having to put significant effort into catching up with the sky-high customer’s expectations being set – and met – by non-travel brands. Combine that with global economic and geopolitical turmoil – even natural disasters and pandemics – and we can expect volatility in the travel landscape for some time to come.
At Start Design Consultancy, our methodology helps our clients understand how they can continue to stay relevant in their marketplace, in rapidly changing times. If this means retailers, brands or platforms re-thinking their positioning, communications, physical spaces or underlying tech, that’s what we’re here to help with. Our design solutions mean they retain their brand equity, for their audiences today and their audiences tomorrow.