How technology can help airlines meet traveler expectations

As 2024 gets underway, it's clear that the aviation industry will continue to grapple with huge macro-level challenges: from fluctuating travel demand and inflation to rising cost of living and oil prices, workforce shortages, political turmoil and climate change.

At the heart of these challenges are constantly evolving customer demands. Travelers today demand not just a flight, but an experience tailored to their preference – a seamless journey from booking to landing. The modern consumer is more digitally savvy than ever before, with over half always or frequently relying on mobile devices, so it’s no surprise they demand seamless and user-friendly digital experiences – made possible by the modernization and digitization of retailing.

It’s not just about increased customer expectations; travel trends themselves look completely different. From the flight times travelers want to the booking process for businesses, the in-flight add-ons, pre-flight and in-flight amenities have seen a significant shift. As post-pandemic travel trends continue to shift and evolve, it’s the job of airlines to keep pace with these changes, making booking flights and enjoying the journey as easy as possible for travelers.

With the aviation industry continuing to chart its course to recovery – currently operating at approximately 84% of pre-pandemic global traffic levels – technology can make the difference between pulling ahead and falling behind. It's critical airlines adopt cutting-edge technology solutions to ensure their competitiveness in this evolving landscape.

So how can airlines align with these revised traveler expectations through technology and innovation? Here are some of the key themes we’re talking about with industry leaders.

Unlocking the value of new distribution capability

New distribution capability (NDC) has emerged as a mainstay for unlocking new avenues of profitable growth and unleashing commercial efficiencies to drive revenue gains. In a nutshell, NDC grants airlines greater control over their distribution strategies, enabling rapid innovation and reducing time-to-market for new products. It allows airlines to create dynamic, customized offers for travelers, featuring rich, real-time content to travel agents without legacy constraints.

To realize the value of NDC, it is essential that airlines invest in the necessary technology infrastructure, including compatible booking engines and system integrations, working closely with providers to ensure seamless implementation. As with any emerging tech, adoption is a journey – however, with the right collaborative partners,
any challenges can be addressed and overcome.

For example, when adopting NDC, American Airlines initially faced challenges. The company chose to make its best content available to third-party travel sellers only via NDC connections. However, travel agencies and travel management companies could not convert legacy GDS (EDIFACT) bookings into NDC-compliant tickets.

Through our partnership, American Airlines created and introduced a solution that solved this issue in less than three months, with an expectation that 80% of its sales would be conducted directly or via NDC by the end of 2023.

The power of ONE Order

While NDC is the first step in digitizing airline retail, modernizing the retail stack with ONE Order should follow. ONE Order enables airlines to put customers first by phasing out different record types in favor of a real-time "single source of truth" documenting the passengers’ purchases. For airlines, the approach enables information to flow freely across the airline business from offer to settlement and enhances the customer experience from inspiration and booking, to servicing and fulfillment.

For airlines, however, embracing ONE Order does involve a fundamental shift in how they manage customer reservations and service. It requires a departure from traditional, document-intensive processes – an undertaking for any business. However, it is well worth the journey and is essential for airlines to providing a smoother, more enjoyable travel experience from start to finish, while meeting the expectations of customers for a seamless and unified travel experience.

Data and insights: Informed decision-making

Data and insights have always played an essential role in shaping how technology is used within the airline industry. However, in my experience, most insights are inaccessible, lost in multiple disorganized files. Bringing these insights together in a unified platform equips airlines with a fuller picture for superior decision-making. By harnessing real-time data analytics, airlines can identify trends in passenger behavior, discover the most popular destinations during specific seasons and understand which ancillary services resonate with travelers. These insights will not only help airlines to offer a better experience, but also adjust their pricing strategies to optimize revenue on these routes, ensuring competitive fares for last-minute bookings.

The role of artificial intelligence

Of course, there is significant hype around artificial intelligence, and for good reason. AI within the aviation market is expected to grow at a compound annual growth rate of 43% between 2023 and 2027; forecast to increase by $3.6 million. Specifically relating to customer preferences, AI holds the potential to offer recommendations based on a traveler’s past choices, making tailored pre-flight and in-flight suggestions, for example, automatic favorite seat selection and offering exclusive deals.

Furthermore, AI's dynamic pricing capabilities can enable airlines to offer custom fares based on a traveler’s historical interactions and real-time market demand. If airlines aren’t already, they should be carefully adopting strategies to leverage AI where it will add the most value to the customer and benefit business operations.

Embracing technological flexibility

What’s clear here is that with rapidly changing customer expectations come rapidly changing technology needs. However, not all technology offers the flexibility and agility required to evolve rapidly. To avoid being locked into rigid technology platforms and packages, airlines should explore open modular solutions from their partners.

The best solutions are comprised of individual modules designed to cater to distinct functions within airline operations, affording airlines the flexibility to pick and seamlessly integrate the right technology aligned to specific needs. This modular strategy not only provides adaptability and scalability but also enables airlines to shape and adjust their technological framework without necessitating a comprehensive system overhaul.

With research showing by the end of 2023 88% of airline investment budgets will be committed to technology, it’s clearly a priority for many. The market has changed, and implementing technology that has the flexibility to adapt to an increasingly dynamic landscape is critical for growth. I strongly believe that the next five years will see airlines accelerating their technology transformation. As we navigate the ever-changing skies of the airline industry, technology is the bridge that leads us to a brighter, more connected and personalized future of travel.