People today are connected – at home, on the go and even in flight. A recent study found that 25% of adults couldn't remember their phone having been out of earshot. Mobile applications like WhatsApp have more than a billion monthly active users. There are more than two billion photos shared on Facebook's apps each day. While the preferences for platforms may differ between regions, the use of mobile applications is growing at breakneck pace. And this impacts traveller behaviour too.
Today, 97% of travellers carry a personal device. Over 55% of business travellers take an Uber ride, rather than a taxi, when on a business trip. This means apps like Uber are setting travellers' expectations. If an airline wants to be ahead of the competition, its app needs work as seamlessly as Uber, even to meet expectations. However, few airlines come close.
For example, it takes two taps to call a ride on Uber. It takes anywhere from five to 20 taps to make an airline booking on a mobile phone. Apps like Uber have changed the way we book.
Travellers today care about how many clicks or taps it takes to make a booking. They care about how much information they need to enter each time they make a transaction, especially on mobile devices. For example, users of Uber never need to enter their credit information manually in the app. They just have to take a picture of their credit card and all the information is permanently and securely stored. Isn't that a clever idea?
Recently, EasyJet sought inspiration from Uber and applied the same technology to its mobile app. It partnered with the same firm that powers Uber's scanning technology to allow passengers to scan their passport and store their details so they need never enter them again when flying with the airline. EasyJet didn't reinvent the wheel – it just sought to replicate the market leader, essentially, making life easier for its customers.
American Airlines has forged a partnership with Uber itself, where the airline's smartphone app can guide passengers to specific Uber airport pick-up locations while frequent flyers can earn miles when using the airline's co-branded credit card to pay for Uber rides.
TRUST ISSUES
Another popular app among travellers is Airbnb – enabling users to choose to stay with a local in a new city. While it might seem odd to be staying with a stranger, Airbnb works well as a result of its trust-based system. Every host is rated and so is every guest. Travellers pick hosts who are hospitable, and hosts can reject guests with bad ratings.
Airbnb does a very good job of building trust between host and traveller. In addition to the public reviews and ratings, it makes it very easy for both parties to communicate.
Airlines are learning too. KLM is partnering with Facebook to offer customer service and booking capabilities via the Messenger platform. That means people can be texting a way to a rebooking, or reporting lost baggage, while on the go. Airlines like KLM are good at adapting to the latest trends and usually leave the competition behind.
While apps like Airbnb are built on trust, it was really TripAdvisor that started the trend in the travel vertical. Few book hotels without reading a TripAdvisor review, with 93% of travelers saying their hotel booking decisions are influenced by a review. Over the years, TripAdvisor has become the de facto source for checking out what others say about an hotel before booking. There are 90 reviews submitted on TripAdvisor per minute. But booking airline tickets, people sort by price or schedule. This will soon no longer be the case.
TripAdvisor recently launched reviews for airlines. The website is encouraging travellers to add airline reviews once they have completed trips, in addition adding hotel reviews. Launched in January, the site already has more than a thousand reviews for some major airlines. Like hotels, airlines should be replying to selected reviews, and certainly monitoring them. Reviews are a good indication of service levels.
CHANGING THE WAY PEOPLE SHOP
The author recently saw a duty-free passenger use the Amazon app and scan a barcode to identify that the price of a camera was cheaper back home. So he ordered it using the app and as an Amazon Prime subscriber, the camera would be delivered a few hours after he returned home.
There are more than 80 real-time price comparison apps in Apple's app store alone. These emulate the function pioneered by Amazon. Most allow anyone to scan a barcode and give the related price in online channels and stores nearby. Amazon has changed the way people shop.
Travellers today are much better informed when making a buying decision. Google says a traveller will visit an average of 21 websites, in seven sessions, on three different devices, before clicking "book". That means the traveller is already well educated about the options before landing on the airline website. If an airline only optimises its own website, it is missing out on the 20 different opportunities to connect with and attract a potential customer.
Apps have changed the way travellers behave, and airlines need to adapt. Fast.
THE INNOVATION GAME
How can airlines catch up? Some, like Japan Airlines, launch lots of apps and then focus efforts on what works best. Back in 2013, they had launched 10 apps in eight months.
But few airlines can follow in their footsteps. How can they be less like a supertanker and become more agile? There are two options: setting up a lab and running hackathons.
To be able to innovate in a sustainable manner, some airlines have set up innovation labs – autonomous teams often separated from headquarters. Lufthansa has launched an Innovation Hub in Berlin led by its chief strategy officer, who has been given a €10 million ($11 million) fund to invest in projects. Half the space in the hub is taken by up-and-coming Berlin start-ups, and the other half by the Lufthansa team. This allows cross-pollination of ideas. The hub's first major project is to launch a drone-management company.
Ryanair wants to become the "Amazon of the airline world" within a year. A separate digital lab has been set up with 40 full-time staff in Dublin, called Ryanair Labs. It has launched a new website, which is not as tacky as the last. Ryanair Labs aims to launch up to 10 apps in 2016. One of them allows users to browse destinations just as they would look for a date on Tinder, with a swipe right or left.
In the aircraft-manufacturing world, Airbus Silicon Valley has been launched, with the inventor of Google's modular phone at its helm. Its mission is to invest in Silicon Valley start-ups to add to, and diversify, Airbus's business units. Its first investment is in a start-up that wants to build open source aircraft and cars. JetBlue Airways has followed in Airbus's footsteps with its Technology Ventures start-up fund based in Silicon Valley.
Meanwhile, there is another option for airlines that want to keep up with changing travel habits.
Some airlines have found organising hackathons a constant source of inspiration for staff, and they don't require as many resources as a lab. A hackathon usually involves "locking" about 50 coders in a room for a couple of days and tinkering with airline data and APIs to create new products and apps. The output are apps that can be used by the airline, incubated externally, or completed by hiring some of the developers.
American Airlines was one of the first to launch a hackathon, when it gathered developers in Silicon Valley to figure out innovative uses for wearable devices in the travel lifecycle. The hackathon produced a number of creative ideas for the airline, some of which are being implemented.
Emirates has launched hackathons over the last 18 months. Neetan Chopra, senior vice-president for IT services, leads the efforts and says the aim is to "get sunshine from the external ecosystem" for the airline's teams.
Neetan ensures key members of his IT team and senior executives attend these events, as it opens up their eyes to possibilities. Emirates has taken this initiative further by collaborating with Oxford and Carnegie Mellon universities to jointly come up with innovations.
The reality today is that traveller habits are changing constantly. Airlines will find it difficult to keep pace with the rate of change in their traditional structures. Those that want to speed ahead of competition will need to think about setting up innovation labs, or bringing in outside ideas with hackathons.
Shashank Nigam is chief executive of airline marketing strategy firm SimpliFlying, which has worked with more than 60 airlines and airports
Source: Airline Business
