Airlines lose billions annually through disruptions.
Studies from companies such as Switchfly which estimated a cost of $250 per passenger to rebook a cancelled flight and $4000 for crew in a recent report.
In its 2016 report with T2RL, Amadeus puts the cost to airlines at 8% of revenue, or $60 billion to the industry, every year.
Then there are the so called soft costs - the social media fallout, stressed passengers and staff and damage to brand.
Little wonder then that airlines are turning to technology to address disruption from weather events to grounded aircraft.
Cathay Pacific says it started its journey 18 months ago and wanted to take a “design thinking approach” to the problem and try to look at it through the eyes of passengers.
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The carrier, which operates 400 flights daily in and out of its Hong Kong hub, is impacted by typhoons every year and cancelling operations for for 24 hours impacts 100,000 passengers.
Josh Rogers, head of airport customer service, says Cathay dealt with 31 typhoon-related events last year including Manghkut, said to be the biggest for 72 years.
Speaking at last week's Amadeus Airline Executive Summit, he says Manghkut was hitting Hong Kong while still impacting the Philippines pointing out that it’s not just about the hub, it’s the impact on the whole region.
Passenger feedback to the carrier reveals that how it deals with disruption in their number one issue
Rogers says: “We’re not big enough, we don’t provide them with visibility and their options and we’re disrupting their travel plans. And, the financial losses for us our huge.”
He adds that speed in customer (and brand) recovery is critical saying that the “three to four hour mark is when a lot of customers start to give up on us.”
The solution has been to look at the passengers, the staff and the organization to come up with “how might we?” type solutions.
“How do we design an experience that keeps them at ease? From an organizational perspective how do we start leveraging on existing and emerging technology to make it more efficient and our people can deal with it with more confidence?”
Rogers also says that the high proportion of sixth freedom passengers brings an additional challenge with traditionally the first tranche of flights going out “incredibly empty” after a typhoon because the airline ability to rebook and communicate with passengers.
The solution has three elements - use Amadeus Passenger Recovery technology to optimize how disruptions are handled, partner with Accenture on a chatbot tool called Vera for customers to rebook their flights and partner with 15Below for communications.
The results so far are positive with a cancelled Hong Kong-Shanghai flight rebooked in six to eight minutes meaning less passengers need to phone the call centre and frontline staff are freed up to focus on other things.
Next steps will be to implement the technologies during typhoon season but the carrier is already running scenarios for that.
It’s also looking to use the Vera chatbot to rebook passengers who have come via travel agents late this year and bringing the same functionality to additional touch-points.
Rogers says: “We’re also looking at how else we can use digital solutions to deliver better customer experiemces such a choosing hotels during disruptions, pushing vouchers and compensation claims.”
The Southwest story
Southwest has its share of weather events to manage but off the back of a blizzard in Denver in March, it also had to deal with the grounding of the Boeing 737 Max jet.
For the carrier that represented a huge scheduling problem with the aircraft comprising 34 or about 5% of its fleet.
The initial impact was 24 days, about 130 flights per day, with passengers rebooking themselves and the operations team manually handling the planning.
It became clear however that the situation was not going to be quickly resolved and the carrier would have to redesign the schedules.
Mary Wharton, senior director of technology - network planning and revenue for Southwest Airlines, says: “On April 8 we removed another 61 days of flying, about 8,000 flights and on April, 11, we cancelled another 58 days of flying. A schedule change of this magnitude is not something we do everyday.
"Between these three days we re-accommodated millions of people and changed millions of flights.”
The airline worked with Amadeus, its passenger service system provider, on rebooking and re-ticketing customers.
It then looked to Optym, a company Amadeus has invested in developing solutions with, to “redesign the network” with 34 fewer aircraft and find ways to get passengers where they wanted to go.
Wharton says the carrier started from scratch with a goal of achieving a “reliable operation” and minimizing the impact on passengers.
Southwest is using technology from Optym to try to optimize across six different areas including frequency optimization, schedule optimization and schedule management.
It plans to incorporate further elements of the technology, such as demand forecasting, going forward.
The next step is to figure out how to reintegrate the 34 aircraft and Southwest is running scenarios on how that might work.
Renzo Vaccari, senior vice president of airline solutions for Optym, says: "The schedules are not always the same. They change every month because demand changes so we need to reoptimize to match supply and demand."
* This reporter's attendance at the event was supported by Amadeus.