Alarm call for Indian airlines - next generation of travellers will prefer technology over human contact, want to interact real-time using apps and receive personalized offers via social media.
conducted by SITA
examines the future of the passenger experience and the role of technology in Indian commercial aviation.
With 450 million passengers expected to fly annually by 2023, India will be the world's third largest aviation market by then behind the US and China.
Over the last decade, Indian domestic airline passenger traffic has grown more than four‐fold from 14 million in 2003 to an estimated 56 million in 2013.
Revolution in Indian air industry is around the corner
Though mobile penetration is high among Indian travellers, services like reservation and check-in via mobile devices are still at early stages.
This being the case, advanced technology processes in handling flight disruptions and ancillary revenue generation are still at least a few years away.
But, passengers want more personalised and faster experience when it comes to technology. Now, the onus is on airlines and airports to embrace technologies to boost self‐service systems.
Emergence of self-service tasks at airports
About 34% of travellers surveyed indicated check‐in and bag‐drop as the most stressful part of their air travel.
74% of travellers had luggage to check‐in on the day of travel and a whopping 98% of them checked‐in at the airport counters.
80% of travellers want to use self‐tagging and baggage drop facility at Indian airports. Currently, only 33% of travellers were aware about the check‐in kiosk facilities that are already available for passengers travelling without baggage.
Interestingly, at some Indian airports, kiosk check‐in can be more expensive for the airline than a manned counter, and hence the facility has not been encouraged.
When it comes to kiosk usage by passengers, Bangalore airport
tops the list with 20% utilization, whereas across India this number stands at 10%.
Among the passengers who checked‐in with baggage, 22% of them checked‐in online to reserve a preferred seat. Of the passengers travelling without luggage, 47% did a self check‐in.
Role of mobile in reservations
58% of total travellers surveyed booked their tickets themselves, and in case of leisure travellers the number was high at 72%.
Among the travellers who self-booked their tickets, 58% of reservations were made directly with the airline and 42% via third party online travel agents.
82% of travellers surveyed were carrying a smartphone and 22% were carrying tablets. 42% of smartphone users had some type of travel‐related app downloaded on their mobile.
75% of respondents check their flight status via SMS and about 65% travellers use real‐time flight update tools. 42% of smartphone users had a dedicated mobile app to track the status of their flights.
More than 80% of passengers indicated that they would like to use their mobile for flight search and for storing flight itineraries and 78% said they would book flights and other travel products using mobile wallets if a user‐friendly application was available.
77% of passengers said it is important to have airport maps and navigational facilities available through mobile apps. However, only 57% of them are willing to be tracked (if any) by the airport for departure control purposes.
Social media adoption by airlines
India is the world’s third largest social media market with the number of users in urban India expected to have reached 66 million by June 2013.
64% of the survey respondents use social networking sites. But, less than 20% of travellers are interested to engage with travel‐related providers through social media.
Currently, Indian carries use social media as a brand building and communicating platform with passengers. Once Wifi is available on board, it will become more important for airlines to be even more active on social media in order to respond in real‐time to customer issues.
Some airlines have implemented promotion of airline services and CRM through social media. Reservations and check‐in via social media may be offered by some airlines by the end of FY'15, while notification of travel status, sale of ancillary services and re‐booking are the next priorities.
Key challenges faced by airlines with passenger‐facing technologies
- Lack of clear understanding about the value added by social media platforms
- Fear of losing customers as a result of opening up to social media platforms
- Developing mobile solutions for multiple platforms without over‐stretching resources
- Lack of analytics solution to act on customer profile data captured through mobile and social media
- Proving the ROI on technology investments and securing the support of senior management
Airlines and airports are increasingly willing to invest in data analytics due to an improved understanding of the benefits that can be derived in terms of identifying potential efficiencies, and knowing the passenger better to be able to deliver more targeted offers.
Airlines stated that airside operations, CRM and personalization are the highest priorities followed by distribution, baggage processing and on‐board cabin services.
Investment in IT, outsourcing interests
IT expenditure by airlines has remained stable in recent times, one of the reason for this to happen is the poor financial performance of Indian carriers.
However, airlines are willing to invest in certain game‐changing technologies if the opportunity arises. Going forward, most carriers expect IT expenditure to increase over the next couple of years.
In addition to the unstable regulatory outlook in India, airlines also face challenge in choosing reliable technology suppliers, deciding on priorities and securing support from key business stakeholders.
Almost all Indian airports think that IT is essential for their business and 50% of the Boards recognize it as critical. At private airports, IT heads are expected to deliver positively on parameters directly affecting the bottom line.
Airport CTOs/CIOs surveyed indicate that the current focus is on improving operational efficiency and reducing costs, over the next few years this is expected to evolve to enhancing the passenger experience, generating new revenue streams and creating differentiation.
Airport expenditure on IT is expected to increase from 5% in 2012 to 8% by the end of FY'15. Delivery of traveller‐specific retail promotions through mobile platforms; the ability to pay for airport services through mobile wallets; and management of frequent flyer databases and CRM systems are all expected to be key highlights of airport IT deployment in the next three years.
The Airports Authority of India has identified outsourcing as the best model for IT implementation. The private airports at Delhi, Mumbai and Cochin are also strong proponents of outsourcing.
Most airlines stated the benefits of outsourcing as: Cost reduction, access to domain expertise of the vendor, agility in shifting quickly to the latest technology, reduction in capital expenditure, and scalability of technology.
However, Indian airports have also invested significantly in developing in‐house capabilities for IT systems management. Third party providers are primarily involved across systems integration, baggage management, passenger processing and cloud computing as these are highly specialist domains requiring complex solutions, which is usually a key factor in the decision to outsource.
Indian airports in the year 2015
a) Near Field Communication (NFC): This is expected to change the way travellers use their mobiles to access services from airports and airlines.
b) Business intelligence tools: These are deployed by most airport operators across diverse functions to enable better and quicker decision making for effective utilization of assets and for disruption management.
c) Baggage management: Technology that enables a passenger to know the location of their luggage is under development and is expected to be implemented by 2015.
d) Self service systems: Kiosks are being rolled‐out by airport operators across India despite low adoption by travellers at present. Common Use Self Service (CUSS) systems for bag‐tag printing and baggage drop are in the evaluation stage at selected airports with high passenger volumes.
e) Augmented reality (AR): Applications based on AR are expected to be rolled out at private airports such as Delhi, Mumbai, Bangalore and Hyderabad.
f) Biometrics: Private airports have adopted biometric technologies in some form for employee safety and security and are planning to implement registers for travellers as well on an optional basis. However at AAI airports (non-private), the technology is not yet on the radar.
g) Cloud computing: Currently, only one airport operator has started to implement cloud‐based computing. Though adoption in this area is slow, on a longer run, cloud computing is expected to influence airport systems management.
The study involved interviews with:
- Key stakeholders amongst airlines, airports, ground handlers, air traffic management, customs and immigration.
- 500 passengers across six metro airports, focus group discussions with 30 passengers from a variety of backgrounds and with various travel experience.
Airport gate image