airlines innovation strategy
Traditional and low cost airlines focus in differentiating their business models to become the leader in the airline market. With convertible seating, you would be able to purchase what you want, and the airline could change the seats to make it happen (and make money by doing so). Many—from internationally renowned design firms to NASA scientists—have a hand in trying to turn big ideas into future plans. Even before COVID-19, more than half of airline travelers (55%) had experienced a travel disruption in the past year, according to the International Air Transport Association’s “2019 Global Passenger Survey.” For airlines, disruption is the primary factor impacting customer loyalty. “Airlines can’t control disruptions, and COVID-19 has caused unparalleled and unanticipated disruptions across the entire airline ecosystem,” says Julie Hoffmann, global head of Industry Strategy & Marketing, Travel, Hospitality & Dining at Adobe. There was a day not too long ago when seatback TVs on planes looked space-aged, the concept of a call from 30,000 feet seemed impossible, and the idea of WiFi—let alone on a plane—was completely out of the question. “I used to work for the airlines—and from a business point of view, flexibility would bring huge benefits both to operations and revenue,” Lee says. Many already provide entertainment at your fingertips once you log in to the airline’s WiFi. With Compensaid, a service developed by the Lufthansa Innovation Hub, travellers already have the opportunity, regardless of their choice of airline, to almost completely offset the CO 2 emissions caused by flying by investing in Sustainable Aviation Fuel. In 1985, only 30 years ago, the government of Dubai invested about $10 million to launch a small airline to fly a few routes around the Middle East. Airlines can look to the retail industry, which was ahead of the game even before COVID-19, and has set expectations for best practices by all consumer brands. Southwest Airlines has historically been successful through organizational innovation consisting of a well-structured and consistent strategy (Raynor, 2011). Airlines can provide free Internet and streaming for far less than the cost of fixing clunky TV monitors—and fielding complaints. To identify what airlines should prioritize to recover rapidly and optimize revenues post-COVID-19, we revisited our Adobe digital benchmarking assessment conducted in 2019. While social media is a means for brand building for other airlines, Air Canada has staff who resolve issues through Twitter and Facebook, says Craig Landry, VP, marketing Air Canada. New Aircraft Concepts Research, in the European Union, is also working with Airbus on a PRO green Aircraft Concept that will be a design overhaul of more eco-friendly options. premium airline. Business Strategy Innovation - The Airline Passenger Lifecycle - The Airline Passenger Lifecycle was constructed in the wake of the events of September 11th to help the world’s leading airlines increase their revenue and cut costs. Their travelers can start browsing via the mobile web and then easily shift to desktop to put the finishing touches on their itineraries. Here’s a look at those questions, how airlines answered them, and what insights can help organizations respond to today’s challenges and drive business objectives after COVID-19. “For digital capabilities to be a competitive edge, airlines must have strong, extensible operations and a technology foundation,” says Albert Bahar, head of digital strategy, Travel & Hospitality, at Adobe. A traveler’s journey is complex and, as customers begin to resume travel, airlines will need to reassess the end-to-end experience to accommodate shifts in customer expectations. “Digital experiences are becoming more like human interactions as retailers learn who each customer is and create experiences personalized for them,” Perillo says. This can be extended into a real-life example from COVID-19. In fact, the company has processed nearly 2.5 million re-accommodation transactions per day for its customers, up from a typical volume of just 150,000 per day, according to a blog post by Julia Sattel, president of airlines at Amadeus. You even complain about them if they don't work. Across all industries, most conversions still happen on the desktop. Of course, analytics work was nothing new to Southwest Airlines. Topics: Travel & Hospitality, Digital Transformation, COVID-19. This creativity could set the stage for the future of travel. Marketing Mix of Southwest Airlines analyses the brand/company which covers 4Ps (Product, Price, Place, Promotion) and explains the Southwest Airlines marketing strategy. In a January 2020 LinkedIn post, Bjoern Becker, senior director at Lufthansa Product Management Ground & Digital Services, introduced hotel booking with no lines or vouchers. Though it would probably move slower than a commercial jet, it could cut emissions by about 70 percent. Many airlines also recognize the role of mobile apps for day-of-travel communications and functions. “Airlines aim to be increasingly savvy at using space in the most efficient and effective way, investing heavily in creating unique layouts that provide personal space and privacy, says Nigel Lawson, creative director from Acumen. Find more newsletters on our. And fuel efficiency is a key driver in the aviation industry—aircraft weight has a significant bearing on fuel consumption, says Lawson. For example, the American Airlines app can sync with Siri, Apple’s voice assistant, to let travelers check in, check flight status, determine travel time to the airport, and order food from airport restaurants to take on board. like whether travel insurance covers the coronavirus, our entire suite of free newsletters here. Body. Seatback TVs could go the way of the plane phone soon. Forget about trying to pass someone—let alone a flight attendant with a cart. Since 2019, all business air travel by Lufthansa Group employees has been CO 2-neutral. The airline’s innovation team is at the core of this transformation and has adopted a truly agile strategy firmly focusing on testing prototypes and creating an open innovation ecosystem through collaboration and strategic partnerships. We must stand up and speak out against racial inequality and injustice. Subscribe to our What You Missed newsletter for the top headlines from the outdoor world, in your inbox six days a week. Those steps are to detect the disruption, implement a plan, and execute the plan. More importantly now, travelers can modify their itineraries seamlessly across devices and channels, including via mobile messages. Delta CEO Outlines 2021 Strategy. The cost leadership generic strategy is observable in Southwest Airlines and its service offerings as a low-cost carrier. But if the customer researches travel to Bangkok, for example, the site updates to reflect this interest. Emirates set the benchmark for digital vision & strategy, Malaysian Airlines for digital maturity, EasyJet for innovation culture, and Qantas for financial commitment. RTI strategy „Becoming an innovation leader. So seats go wasted. Our main aims were to build on Terminal “The competition is happening in what the interior looks like. As airlines continue to respond to daunting new challenges, they remain focused on maintaining customer trust and paving the way for quick recovery once operations fully return. While the future of passenger demand remains uncertain, the airlines that take this time to plan their return and embrace data-driven decisions and new digital opportunities, will set themselves up to emerge stronger as we come out of the pandemic. Read more about the actions we’re taking to make lasting change inside and outside of our company. Airlines should accompany a status update with a default recovery option communicated through digital channels. Disruption theory says that an enabling technology is the key difference between a truly disruptive innovation and a mere niche solution, such as a low-cost strategy. This model combines the cost-saving methodologies of a pure low-cost airline with the service, flexibility and route structure of a full-service carrier. American Airlines is using iBeacons to improve wayfinding at Dallas/Fort Worth Airport. They can look for similar options based on flight schedules or offer alternatives, taking into consideration COVID-19 restrictions and customer behavior. Throughout the pandemic, we'll keep publishing news to help you navigate the state of travel today (like whether travel insurance covers the coronavirus), as well as stories about places for you to put on your bucket list once it's safe to start going more far-flung. It provides a framework to drive innovation throughout the organization by focusing employees on maximizing revenue With unprecedented consequences, many airlines have grounded all, or almost all, of the planes in their fleet. You can watch TV, movies, and send emails from your own device. In an attempt to survive, many of the companies which are operating in the… Resources Tom Hansson, Jürgen Ringbeck, and Markus Franke, “Flight for Survival: A New Operating Model for Airlines,” s+b enews , December 6, 2002; Click here. During the pandemic, many travelers’ trips were either disrupted or canceled. Mobile will continue to play a critical in-trip role and also help to mitigate sanitation concerns. 19th August 2014 DR. MD. Thus, innovation can be seen as a … The same is true of digital innovation and its importance to retaining control over the customer relationship. We see this trend reflected in the airline industry: Travelers look to mobile for initial inspiration and information, and then many move to desktop to select seats or baggage options and to pay. When you walk onto a plane, you’re instantly crammed. Airbus says this model would use “drop-in fuel" with similar properties as kerosene, possessing high energy density—and enabling lower energy consumption. Realising potentials, increasing dynamics, creating the future“ The strategy for Research, Technology and Innovation (RTI), published by the Austrian government in 2011, defines the strategic and operative goals in research, technological development and innovation in Austria until 2020. When customer sentiment about travel improves, airlines can take advantage of previous trip interests. Several are now flying passenger aircraft as freighters. “That lets airlines deliver best-in-class experiences, capture optimal value, and elevate capabilities going forward.”. That means lower emissions, and likely lower operational costs for the airlines. As for plane phones? “For digital capabilities to be a competitive edge, airlines must have strong, extensible operations and a technology foundation,” says Albert Bahar, head of digital strategy, Travel & Hospitality, at Adobe. “There are lots of emerging improvements vis-a-vis general cabin comforts and amenities,” says Patrick Smith, an airline pilot, host of the website Ask the Pilot, and author of Cockpit Confidential. This comprehensive, data-driven analysis of 20 global airlines uncovered five top-of-mind questions among airline executives charged with accelerating their companies’ digital transformations. Then customers can take charge, engaging with the airline to select the best option for them. In March, Bertrand Piccard and Andrew Borschberg will attempt the first round-the-world flight with a plane using only solar power. Several are now flying passenger aircraft as freighters. This includes the setup of Krislab in 2019, which is Singapore Airlines’ new digital innovation … The result of this shift is the emergence of the “hybrid” business model. Innovators know this, and they’re trying to change it. You’ll notice almost zero emissions. More than half of U.S. Internet users (54%) approve of how airlines have handled the COVID-19 outbreak, according to GlobalWebIndex. Singapore Airlines yesterday (29 January) launched its digital innovation lab, KrisLab, as well as the Learning and Innovation For Everyone (LIFE) festival for employees. For example, Delta and British Airways use technologies like facial recognition to expedite airport check-in and RFID tracking to improve baggage handling. Airlines should also ensure that data is integrated across channels for a seamless experience. Should they suceed, it'll be the first and biggest step toward removing fossil fuel from the air-travel equation. This included distributing more than 50,000 mobile devices to pilots, flight attendants, baggage handlers, and ramp employees, and adding thousands of access … EasyJet is using them to send location-specific messages to passengers’ smartphones, Japan Airlines is tracking members of staff in the gate area, and Virgin Atlantic is using iBeacons to improve the airport experience for its premium passengers. Airlines can continue the innovation and transformation prompted by the pandemic with insights gained from how the customer journey was pressure-tested. Relevancy is not the only driver for exceptional experiences; they also need to be smooth and frictionless – and, as much as possible, contactless in the physical world. When It Could Happen: In the next 10 to 20 years. Airlines were asked to gauge their overall digital transformation readiness on the basis of four key criteria—maturity, vision & strategy, innovation culture and financial commitment. Other surfaces could provide essential passenger information such as safety information and the nearest emergency exit,” he says. Overview Our business Corporate governance Financial statements British Airways 2008/09 Annual Report and Accounts / 25 Progress against our Business Plan BP11 The rolling three-year business plan, BP11, set out our agenda for 2008/09. One of the lessons for legacy airlines was that cost efficiency, operational efficiency and a simpler product needed to become central to their core operations. Take American Airlines, which introduced the first reservation system with IBM in 1960. Check out our entire suite of free newsletters here. Network Planning has always been all about innovation—planning the most efficient, creative way to use our fleet of “red-bellied warbirds” to serve the best interest of our Company. COVID-19 brings even more pressure to accelerate these initiatives. “There are various surfaces in the aircraft from the seat tray table to the overhead panels which could be used as smart surfaces to provide interaction and entertainment—or could even be used to charge your phone. Some airlines are already well on their way to accommodating this shift. Lufthansa Group’s pursuit for innovation appears to stem from a powerful connection and understanding of the changing demands of their customers and an organisational foundation that supports and promotes innovative thinking – all the way from the operations floor to the executive board. Innovation undoubtedly plays a crucial role in creating and developing of market share, revenue, growth and profit at an organizational level. Today? So, what’s next? A single aisle is your only space for movement. The Soarigami, a device you can buy and bring with you on a plane, doubles the size of the middle armrest. Customer experience is the sum of each micro-experience that consumers have with a company. Interactive screens may replace white plastic as cabin walls and even windows, predicts Lawson. Needless to say, the airline industry is having a watershed moment. The airline industry has been hit extremely hard by the COVID-19 crisis—even harder, perhaps, than by the events of 9/11 and the 2008 global financial crisis put together. Coming into 2020, the airline industry as a whole was in the midst of a digital transformation. One of these far-out designs is called the Double Bubble. For a seamless customer journey, using digital technologies to support recovery after disruption must also progress horizontally to ground transportation, hotels, and other services. Another armrest solution: the Paperclip Armrest Project. Indeed, we saw a number of exciting initiatives exploring the potential of blockchain emerge in 2018, including Lufthansa Innovation Hub’s Aviation Blockchain Challenge. 5 Innovative Marketing Strategies Used By Airlines 1. In technical and legal areas management of Malaysian airlines has developed impressive strategy to meet respective responsibility. low-cost strategy, it is no wonder that the low-cost business model has been difficult to define in recent years. This may also open up extensive opportunities for airlines through new insights into passengers’ interests and behaviors, enabling them to serve the right content at the right time and place. Both business class and economy would still exist, but the ability to make more economy seats on one flight, then more business class seats on another, could be key for the airline. By marrying the trends airlines are seeing in online searches, such as destinations and dates, with data partnerships, including hotel searches and bookings, and also customer profiles, airlines can target these segments with the best experiences — destinations, packages, and promotions – in real time to drive passenger demand. Organisation at Singapore Airlines: Achieving Sustainable Advantage The design concept is just that as of now: a concept. When It Could Happen: The timeline's fuzzy, but changes have already started to show up with cabin bars and spa-like bathrooms. He focuses on strategy, network management, sales, and distribution in the airlines, transportation, logistics, and rail industries. “That lets airlines deliver best-in-class experiences, capture optimal value, and elevate capabilities going forward.” This makes connecting mobile with desktop vital to drive seamless bookings. 1.0 INTRODUCTION “Quality service to customers is a fundamental objective and aspiration of SIA” --SIA, 2007-- Over the last two decades, Singapore Airlines has grown from a regional airline into one of the world's leading passenger and cargo carriers (SIA, 2007). The entire Adobe team wants to thank you, our customers, and all creators around the world for the work you do to keep us inspired during this difficult time. If a Lufthansa flight is cancelled and travelers need a hotel, the airline will send them a link so they can reserve a room online at the airline’s cost. This model combines the cost-saving methodologies of a pure low-cost airline with the service, flexibility and route structure of a full-service carrier. It might seem counterintuitive for an airline to be interested in cars – especially driverless ones. Other airlines may start urging you to bring your own iProducts on board. Airbus is seeking a patent for the design concept of the ‘Flying Donut’ that would be set up like a Lifesaver candy—with more open space and wings that come out straight from the nose of the plane instead of the sides. Finnair 6. 19th August 2014 DR. MD. In its quest to enhance the consumer experience through technological innovation, the brand focuses on making travel easier and more comfortable for everyone, not just the first-class cabin. The airline industry has been hit extremely hard by the COVID-19 crisis—even harder, perhaps, than by the events of 9/11 and the 2008 global financial crisis put together. As a “double decker” device, there would be an upper and lower level for two arms to rest peacefully. The aim of the project has been to analyse the influence of innovation on the competitive airline market between high profile and low cost airlines companies´ business model. Here’s what you can expect from the future of air travel—and when it might become a reality. Can you change the shape of the aircraft to allow for more space in the middle? Sources of research: To carry out appropriate research, I have used secondary source of information by considering website, books and journals based on the organizational research. The designer says that the 360-degree views aren’t just cool; they’d make the plane lighter due to simpler construction and different materials. Impact:. Although individual airlines excel in certain areas, no single leader has emerged. Subscribe to our newsletters to stay up-to-date on the latest outdoor news. Once other airlines adopt it, it is no longer considered “innovative”. The required foundation rests on three pillars: Airlines should assess current digital capabilities, ensure their teams are fully adopting the tools they have, and invest in the necessary technology that the don’t — supported by a service-centric operating model — to drive meaningful customer relationships. Southwest Airlines placed fourth on Fortune's World's Most Admired Companies list, and one of the criteria that companies are judged on is innovation. 1 Analysis of Global Airline Alliances as a Strategy for International Network Development by Antonio Tugores-García M.S., Civil Engineering, Enginyer de Camins, Canals i Ports Universitat Politècnica de Catalunya, 2008 Submitted to the MIT Engineering … It will go on pre-sale in early 2015 and at just $30, it could become the next Knee Defender. innovation as their way to add value to the company. Current innovation in this space seems to be about adding something to the customer experience, he explains. “[It’s] the next step towards a 100% digital supported journey,” Becker wrote. low-cost strategy, it is no wonder that the low-cost business model has been difficult to define in recent years. Through our comparative case study we These partnerships – whether for marketing purposes or operations – can enable airlines, hotels, tour operators, and others to redefine the new normal for travel together and build stronger customer relationships. Air New Zealand 2. Create your own loyalty program:. When most people get on a plane they don’t know if it’s an Airbus or a Boeing. Airlines will need to work more closely with others in the travel ecosystem to connect these touchpoints and deliver a seamless experience all while ensuring customer safety. Started in 2014, it aims to end the infamous armrest battle, too. airlines that have come up with interesting innovations in recent years, be it as part of a company culture of continuous innovation, a strategy to challenge the industry status quo, or as part of efforts to catch up after years of underinvestment. It’s a simple origami-like structure made of neoprene and plastic that both divides that middle arm rest and extends its width. One of the most promising examples: airlines handing out devices for passengers to use in-flight instead of installing screens on the backs of seats. Another opportunity: Mobile apps can give passengers the security of minimal exposure to surfaces during their flights. In the future on the A380, you could have bowling, says Dimitri Mavris, director of the Aerospace Systems Design Laboratory at Georgia Tech. When It Could Happen: We're not sure, but not any time soon. There could be problems pressurizing, he says, and it’s quite a diversion from the current commercial model. Every flight has a different demand for first class and economy. It could carry a lot more people, could be more efficient aerodynamically, could use less fuel, and potentially have fewer emissions, but Mavris isn’t convinced the airlines will go for it. He was appointed to that position in 2010 and during the course of his service on the Board, he has … Innovation 'has to be at the heart of an airline's strategy' Big Data, fostering innovation and the development of unmanned aircraft were just some of the topics addressed in the Routes Asia 2018 ‘Aviation: The next generation’ panel debate. Our corporate strategy, innovation and financial planning & analysis departments all report to me, which fosters great partnership and prudent analysis among … In recent months, Amadeus has worked with airlines to minimize disruption arising from COVID-19. Emirates is a fascinating case study in innovation. Everyone wants their analytics investment to yield successful business results, but not everyone can show the kind of serious return on investment that captures the attention of C-suite executives. We will continue to support, elevate, and amplify diverse voices through our community of employees, creatives, customers and partners. Network airlines and mainline carriers follow a more traditional strategy, offering comfortable flights with a relatively high level of amenities. For example, customers who visit the AirAsia website for the first time receive recommendations for destinations and deals based on location and nearest airport. Airlines should embrace this, to identify high-value mobile features and innovations they can add to their offerings to meet this new wave of needs. “That means retailers have moved beyond explicit preferences, and they are digging deeper to determine implicit desires and offer up recommendations for matching products and services.”. They care what types of seats it has, about the lighting, and the windows,” says Mavris. This may mean replacing in-flight hard-copy safety instructions and reading material with digital content, or switching to “bring-your-own-device” features to replace and/or control in-flight entertainment screens. Innovation in transportation: Delta partners on autonomous vehicle research with Georgia Tech, Curiosity Lab. Learn more. Incumbent airlines were unable to respond because although they could change their strategies, they could not change their business models. But it’s rooted in science. In redesigning the upper deck of the Airbus A380 (the largest passenger airplane in the world), design firm Acumen created nine “First Apartments.” Six can even be joined together like connecting hotel rooms. by Digital Strategy and Industry Strategy. Best practices when disruptions occur require taking three steps as quickly as possible, says Vincent Lacroix, head of disruption solutions at global travel technology company Amadeus. Our strategy and objectives. And providing more options means more opportunity to make money. To inspire active participation in the world outside through award-winning coverage of the sports, people, places, adventure, discoveries, health and fitness, gear and apparel, trends and events that make up an active lifestyle. Why? For example, the company’s advertising campaigns frequently emphasize low fares as a selling point, in contrast to other firms that use the focus strategy or the differentiation strategy, such as Delta Air Lines. There are a lot of business class demands for a flight from London to New York, for example, he says, but on a flight to the Caribbean? Forget paying for WiFi, too. James S.H. Discover how Airbus makes these intersections happen to positively impact our world. The Butterfly would allow flight attendants to change a seat from economy to business very quickly in between flights before you board. There are several marketing strategies like product/service innovation, marketing investment, customer experience etc. Accenture provides consulting services to travel, airline, & hospitality companies to outdo unprecedented competition in the new digital landscape. “What airlines can control is a response that supports travelers through fast recovery, accurate communication, and personalized handling using the self-service tools and channels most accessible for the customer.”. All Nippon Airways 3. KAMAL UDDIN Professor Department of International Business Faculty of Business Studies University of Dhaka Sir, Subject: Submission of Assignment on “Marketing Strategy of Emirates Airlines” Here is the assignment you requested on 08 th July 2014 on the topic named “Marketing Strategy of Emirates Airlines” as a part of study curriculum of ‘Global Marketing’. You take those things for granted. An Airline’s loyalty program can help in reaching new audiences and converting them... 2. Delta Air Lines CEO Ed Bastian sent out his latest ‘Letter from Ed’ on New Year’s Day, this time to employees instead of loyal customers to let workers know the carrier’s strategy for 2021. Look at NASA’s N+3 design developments—representing three generations beyond what we see in the skies today. If social distancing continues, for example, demand for online check-in and preordering of products in airports may increase.