Words such as "unprecedented" don't come close to describing what airlines and passengers had to contend with earlier this year with mass cancellations and disruption to trips across the world.
Startups offering technology that enables passengers to rebook themselves as well as providing carriers with a better picture of what's happening already existed - but the pandemic has thrust the need for such technology into the spotlight.
PhocusWire talks to Amos Bar Joseph, founder of Rubiq.
What has Rubiq’s experience of the pandemic been?
There are three phases. The first phase was mass cancellations, a rush of cancellations and refunds for airline call centers.
It demonstrated the need for a solution like ours and we have signed two new contracts including one major airline in Europe.
The next phase is market recovery - airlines going back to the air with new routes etc.
At this stage, the workload shifts from the call-center to revenue management teams. They will start to conduct trial and error experiments on new routes, trying to see if there is sufficient load factor.
As a result they will cancel flights and try to centralize demand on specific flights. We’re in discussions with airlines about implementing our system for revenue management that will help with disruption and scheduled cancellations.
The third phase is the new normal when we start seeing year-by-year rates getting similar to each other. From there, we will see three main characteristics for flight disruption:
- A contactless self-service experience. We cannot allow for the accumulation of long lines at airports and the aggregation of passengers in crowded places.
- Airlines will need to rely on an autonomous recovery process, a fully automated one mainly due to the manpower shortage the industry is experiencing. They will encounter the build and hire versus buy and fire equation - when you don't have enough manpower to accommodate the flight recovery process, technology will replace it.
- Airlines will need to forget everything they have learned and rely on a new data-driven approach, mainly due to the environmental uncertainty we’ll be entering. Existing revenue management models do not apply in the new normal.
These are the three pillars that will drive innovation in flight disruption and our platform is going in that direction.
You talk about airlines needing to forget everything from recent years, do you believe technology adoption is going to now accelerate in the air transport industry?
If you look at the trends converging in the remote trend, many are now working in a remote environment and need to adopt technology in day-to-day operations like they have never adopted.
It’s easier to replace manpower with technology and then rehire employees to fit the new model than purchase technology and fire employees, which is another trend giving the airlines a push towards technology adoption.
I think that the contactless/self-service trend due to the virus really takes an industry that heavily relied on manpower and now cannot that manpower, so airlines need to reinvent the way they are approaching customers.
There are a lot of big brands in the industry whose mission statement was around that personal customer experience. This reality is not sustainable in the new normal and they will need to rely on delivering the best practices of customer experience in a digital manner not face-to-face.
I’m projecting a manpower shortage because when demand returns the airline will not have sufficient to accommodate it and will have to make a decision to bring on more manpower or rely on technology to replace that manpower.
Airlines don’t have a lot of money, how do they then make the best of the technology to carry out the above elements to be more efficient and automate processes?
Airlines are accustomed to relying on big projects that have multi-year return-on-investment length.
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They are implementing software that on year three will achieve ROI and from there everything will start to bounce back. The shift we will see is about solutions that will give ROI on day one.
It means airlines will need to implement faster, drive better agility and have faster sales cycles because they will need to see instantaneous ROI. That pushes them to rely more on startups that can help drive that agility rather than big corporates.
It will mean taking greater risks but a crisis demands a greater risk approach so that’s one trend I’m hoping to see. I think it will be a key driver in the recovery of the industry, airline will rely more on innovative technology but with smaller players and not those big players - or in-house solutions - that take years of implementation.
Diving deeper into the collaboration of startups and airlines, startups will need to play their role in building smarter and better business models that provide immediate ROI and will enable airlines to cooperate with them from day one.
One of the pillars you talk about is being data-driven, what makes you think they can switch to revenue management in the new normal with the way their data is currently managed?
There are two aspects - the de-siloing trend and relying on third party data providers.
The de-siloing trend - the fact that we have end-to-end platform in that we take it from the monitoring of the passengers, find optimal solution then communicate it to them then enable them to choose and self-manage the process.
If you look at that end-to-end process, once one provider has a grip on all of it, the insights you can discover are much greater than the silo mode. When you’re working with vendors that can take an end-to-end process, monitor all that, find the gaps, then you have better visibility to make smarter decisions in real time.
The contrast is you have two vendors, one in charge of customer communication, one in charge of flight monitoring and each is trying to understand what to do better but each is only looking at their own turf. Once you combine them you find a lot more hidden opportunity.
There’s a big trend in the industry of relying on third party data. One example is a startup that is producing data about COVID-19 restrictions, The R factor etc., and airlines are using that data to stimulate passengers to book.
Building on that, since we’re doing the rebooking, we can understand which date passengers are rebooking themselves and you can analyse that data to understand what is not a new booking but what the passenger intent is. We saw in our data a lot of passengers rebooking for September/October as they believed they will fly again then.
Airlines have demand prediction models and they say those work great and that it takes two years of the sales cycle to change the revenue management system. In this reality this model will need to change constantly and airlines will need rely on those third-party data providers to achieve this.
Collaboration in the industry has been a challenge in the past in terms of airlines working with governments and other parts of the industry. Does the current situation force more collaboration so that we can get to this new normal?
We’re already seeing a lot of organizations trying to collaborate. One of the main hazards for countries are their airports, it’s one of biggest potential channels for new infections.
At the same time for a lot of countries, the airport is one of the biggest revenue streams, so in order to enable air transport to the continue but avoid infection stimulators, airlines need to collaborate with governments to try and detect infected passengers. For example, when you see an infected passenger, where they were on flight, who they were sitting with and monitor that in real time.
Airlines will need to collaborate with competitors, governments and startups. The industry should rise up together from this crisis, it’s the only way to recover as quickly as possible.
Do you see other digital technologies accelerating in the aviation industry?
I think conversational technology and self-service technology. The virus has accelerated significantly the need for airlines to communicate with passengers automatically and in a more human-like manner.
Airlines need to rely more on automation and at the same time circumvent the fact that they are losing their point of contact with customers, replacing human point of contact with a machine point of contact.
When an airline can't rely on its regular communication channels with their passengers, technology will become the face of the brand, so they will need to rely on more sophisticated communication channels.
Project forward five years, how do you think what we do today will change or will have changed…when we go to airport or get on on a flight?
That’s the one million dollar question. If I look at just one point in the security process today and you need to remove shoes because 10 years ago one suicide bomber tried to hide a bomb in their shoes - 10 years later, it's still a regular part of the airport experience. So, for those that say everything will return to normal, I think not.
I believe the new normal will be that you need to show you are coronavirus free through some kind of documentation. Airports will also be hazard so will a lot of contactless robotics. I don't buy the belief that there be a vaccine that will cure the whole world.
I think it will be lot longer to vaccinate the whole world. Airports could remain a dangerous place for virus transmission so in five years, we will need to come to the airport four or five hours earlier, we will need to go through more extensive security measures in terms of epidemiological measures. And, I believe you will see almost no personnel at the airport.