Business Aviation
Article | January 7, 2022
The unprecedented wave of Covid 19 created significant turbulence in the aviation industry that made the industry face daunting new challenges. However, as airlines continue to respond to the challenges, the marketers remain focused on paving the way for quick recovery.
Whereas, aviation experts admitted that this black swan event impacted the airline industry roughly. The impact of COVID-19 on airlines was forced to face bankruptcy, destruction of financial packages, and complete changes in the airline industry in terms of security. Therefore, while keeping the fact that COVID-19 will have longer-term repercussions, it’s imperative the airline industry would quickly reduce the impact on its stakeholders and operations. And for this, airlines need to go beyond conventional thinking and come forward in using technology to dig in for the long haul.
Airline Industry: Riddled with Challenges Amid COVID-19
Given the airline market behavior during the Covid-19 crisis, it has many opportunities to target different marketing segments through direct and indirect channels. However, some complexities that challenged building an effective marketing strategy were:
Drop-in Revenues
According to KPMG, commercial revenue has been a rich source of income in airline businesses; it contributed more than 50% of inclusive revenues in the airline industry. However, a large share of revenue is generated by marketing which has completely dried up with minimum footfalls. Reduced economic growth, absence of remote work arrangements, and loss of operational models have been some of the fallen parts of the airline industry to deal with this new reality.
IATA, at first, stated that airline revenues could fall by $314 billion in 2020 owing to COVID-19, which is a fall of 55% compared to 2019. However, further analysis revealed that it fell $419 billion more in the same year. Also, the second quarter of 2020 saw a nearby decline to $43.5 billion in revenues compared to the projected baseline, a reduction of more than 1%.
Impact on Future Investments
The impact of COVID-19 on airlines was much on the plan for future investments and asset building. These areas posed significant challenges for airline businesses and investors to monetize assets or repurpose them to create shareholder value. In other ways, competition from newer asset-light businesses also posed an additional challenge on asset building and profitability.
How has Airline Industry Retorted to the Pandemic?
Most businesses have reduced all new investments, freezing shares, maintenance, and partnership costs. These have been the extreme response expected in the war—COVID-19, which is even gimmer than war.
But, despite all the impact of COVID-19 on airlines, airlines have responded with alacrity. The crisis made them stand by quickly developing new business processes and operations, research models. In a longer time, changes in the airline industry weren’t so significant. Airlines are also witnessing a radical shift in their development priorities and unique opportunities to conduct research. The desire to provide additional pressure on revenue management systems to predict demand more accurately has also been the core force of development. Let’s understand more under the following points:
Technology Makeover
In a progressively evolving digital-only landscape, the technology carries more value if used well. Investing in the right tools and technology can help monetize assets better and significantly improve operating efficiency and customer experience.
Refocus on Cost-line
Innovations in marketing strategies, technology can suggestively change the cost of providing services for both airlines and airports. It can help give more pressure on both affordability and profitability. This area of transformation can stimulate significant savings in operating costs and could become the norm for the best performance of marketing.
Innovate
COVID-19 has spawned the best inventions and innovations. The value of data and technology that you have access to today cannot be overstated. Yet, the aviation industry has shown the resilience to come back stronger and smarter. Therefore, there is a necessity for a thoughtful, analytical, and consistent approach to reforms to help the industry function at a newer and higher altitude and redefine its new normal. The changing geopolitical marketing scenario and impending operational shifts globally demand a swift and nimble approach. Advantageous changes in airline industrial policy in COVID-19 will be required to feat the opportunity, with accrete marketing strategic gains and create a better future.
In a nutshell, airlines had to reinvent how they looked at bookings, employee management, and revenue management, as the previous curves were no longer relevant, and the training data used for machine learning algorithms were no longer valid. Now, airline businesses are exploring novel ways to shorten the old methods used in forecasting, pick up on trends more quickly, and incorporate demand adjustments made by manual revenue management users.
Finally, the writing is evident on the wall—as airline stocks continue to falter (by 16 to 20%), the industry needs to go beyond conventional thinking and use technology to dig in for the long haul.
Airline Marketing: Path to Recovery with 3 Important Tech-Strategies
Inclusion of Advanced Analytics
In the next five years, airline businesses will proceed to develop their ability to install advanced analytics. Although the industry has been using advanced data and analytics, there are expectations that marketing leaders will expand the entire value chain of analytics more progressively. Data-backed analytics will render insights to pinpoint geo-specific interventions for maximum ROI.
While traditional sources of competitive advantage for airlines such as products, networks, technology will continue to gain importance, it is believed that increased usage of data science and advanced analytics will help the industry to augment these sources to deliver notable performance improvement.
Rapid Adoption of Data Science
The aviation industry is part of the change, too, in terms of technology development. Airline Technologies in Covid is radically varying the way businesses connect with their customers. The data required is allowing businesses to take informed steps towards operational efficiency. While embracing new technologies, changes in the airline industry are witnessing the addition of artificial intelligence (AI) to the maximum so that businesses can operate in the post-COVID-19 scenario.
Control of Digital Solutions
As airline market behavior during the Covid-19 crisis has incurred changes in the airline industry, the control of digital solutions has come to the rescue. The solutions are in need to shift resources and efficiently scale to maintain operations. Digital tools can help with a wide range of business efficiency, sales and revenue management, marketing, and network planning.
Opportunities to Reimagine in Post COVID-19 Era
Here are the significant ways in which it could be done.
Operating Model
Airlines today need a data-driven operating model with a mindset that pushes accountability across each touchpoint in the business journey. Marketing teams should be organized around journey stages keeping technological aspects on board. The operating model should be accompanied by KPIs that should be measured across the customer journey and regularly shared with every team member.
Digital Transformation
The airline industry could consider stepping up IT, digital, and automation investment now. The crucial strategies for digital transformation are driving data-driven platforms and personalization. Tracking business interaction at every touchpoint with the brands and their products enables better predictive analytics. This means integrating digital solutions with enterprise systems and making the data available at the point-of-sale for sales associates to view, interpret and recommend products accordingly will enhance the convenience of operations. In the case of point, airlines businesses can respond to the faster recovery of short-haul flights by investing in direct sales, owning the customer relationship.
Also, relationships with IT and its providers could be re-considered and explore from a technologically perspective. Beyond this, other initiatives which involve efforts like using data in smarter ways to enhance decision making, requiring some investment to yield significant payoffs, are in the line of digital investments.
Virtual Reality
Gone are the days with COVID-19, when customers were physically involved in the airline business and running it successfully. Unfortunately, the panic of the pandemic is here to stay as a part of our life. So, companies will need to think out of the box. Several tools are available in the market today to avoid physical interactions. Brands have introduced their own ‘Virtual test and try’ tools for marketing and sales purposes.
For instance, Guerlain invested in gamification and launched a mobile game called ‘WeChat’ to promote its sales deck. Similarly, to enhance the operational desk, Lancôme introduced ‘Virtual Mirror’ - an augmented reality virtual makeover app.12 ‘Modiface’- a Canadian AR and AI company, was purchased. Its product performs virtual try-on simulations and is enabled to support live video for all airline operations.
So, the crisis and issues the airline industry facing in the Covid‑19 on revenue generation will still be intensely felt in 2021-2022, as it was earlier. But it is expected that the coming quarter of 2021 will show improvements compared to the previous. This means the industry, which was moving from a decline of 7% in the first quarter of 2021, will see a decline of 35.2% in the fourth quarter compared to the projected baseline.
How to Plan a Marketing Strategy for your Airline Company?
Being in the market already, you can understand where the roots of a marketing campaign come from. Nearly all the airline businesses arise their marketing activities from their vital target group or according to the demand to promote a new product.
There is no solitary way to create a marketing campaign because it involves many company-specific details. Here, you will need to understand how you can stay ahead of your competitors in the marketing field to yield revenue.
Here is a brief sum-up of some valuable points that can help you.
Stick with your Customer Segment: Business or corporate travelers differ in their travel behavior and priorities. So, while you run a marketing campaign, it should highlight this factor as a prime concern.
Focus on the Product you will Market: This point covers that you need to consider that all the product dimensions (digital, physical, service) to market should consider on parameters like how do you want it to market, what are your secondary aims, and how can you benefit from customer actions.
Foster Interaction: So, try to keep as much interaction with your customers as possible. It does help to build loyalty, establish relations with your brand, and source valuable data about your customers. By doing this, you will be able to create a personalized experience for them in the future.
Be loyal: As long as you are not an ultra-low-cost airline operator, you will perhaps have to reward the loyalty your frequent customers give you. Special offers, discounts, and loyalty programs make your brand a company to stick with forever.
Keep an Eye on Competitors: As the airline market has high competition and competitors, your team creating a marketing strategy must include two key elements: your market position and your competitors.
And the last, you must maintain a balance between competition and customer loyalty at any cost.
Frequently Asked Questions
What are the top three issues the airline industry is facing in the Covid‑19?
Although the airline industry faced several challenges, the worse challenges were:
Sluggishness in travel/travel bans
Loss of revenue
Data loss
Which airlines have been most affected by coronavirus?
The list of airlines worst affected by covid-19 goes as:
China Southern
Hainan Airlines
Singapore airlines
Japan airlines
Korean Air & Asiana
Middle Asia
British Airways
United Airlines
What is the future of the aviation industry after covid-19?
From the perspective of the COVID-19 scenario, the aviation industry needs to pick itself up and begin rebuilding. From hygiene and health standards to aircraft data management to monitor an aircraft’s components and onboard equipment can transform airline operations.
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Defense and Space
Article | June 8, 2022
Flying is changing, and so is the future of piloting. With technological advancements across the aviation industry, one can only anticipate what’s in store for the future of piloting. The battle between automation and learning skills that automation can easily take over is coming to a head. As airplane engineering matures, the aviation industry isn’t far from seeing a day when pilots who have undergone training on electric trainers require a license endorsement to fly a piston-powered aircraft.
Goodbye, Manual Flying
Airplanes are becoming downright easier to fly. Consider how most pilots today would never be able to fly the aircraft that their seniors trained in. According to experts, piloting skills will put more emphasis on the efficient use of airspace systems instead of directing and maneuvering the aircraft.
Decoding Airplane Information
Traditionally, a pilot’s primary task was to gather and decode the information he received through the aircraft’s systems. This information was then used to give the pilot an “air picture” which allowed him to get a sense of the air traffic, airspace, and weather. As aircraft technology improves, pilots will no longer need to know how to do this. Instead, the "air picture" will be shown on a screen in front of them.
Final Word
From augmented reality to 3D spatial audio cues, augmentation is happening to aircraft as well as the pilot’s ability to fly them. The evolution of aviation technology will only help transform the mechanics of airplanes, and pilots will no longer need to handle flight control. As augmented reality takes over, future cockpits might not even need to be at the front of the aircraft or have windows. That would be the true test of the future of piloting.
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Aviation Technology
Article | July 26, 2022
NASA is known for developing and launching spacecraft that have a significant environmental impact. However, the space agency is fully on board with the net-zero movement. NASA supports the White House's Aviation Climate Action Plan. It is helping fund several aviation projects that aim to reduce the aviation industry’s damage to the environment.
NASA’s Sustainable Flight Demonstrator Program
NASA focuses on technologies for single-aisle aircraft, which are the powerhouses of many airline fleets and account for nearly half of global aviation emissions. NASA's Sustainable Flight Demonstrator (SFD) project aims to reduce carbon emissions and keep the US competitive in the design of single-aisle commercial airliners, which are in high demand.
"Since its creation, NASA has worked with industry to develop and implement innovative aeronautics technology and has shared it with the world," said NASA Administrator Bill Nelson. "Now, with this ambitious new project, we're again joining with US industry to usher in a new era of cutting-edge improvements that will make the global aviation industry cleaner, quieter, and more sustainable."
NASA Wants to Reduce the Environmental Impact of Commercial Aircraft
The program’s goal is to build, test, and fly a large-scale demonstrator. NASA hopes to find a business partner for a Funded Space Act Agreement with its Armstrong Flight Research Center in Edwards, California, by the beginning of 2023.
The agreement would draw on private-industry knowledge and experience, with an awardee developing a suggested technical plan and committing considerable cash to the project. Under this agreement, NASA would not purchase an aircraft or any other hardware for its missions. The mission of NASA is to develop new and innovative technologies and capabilities.
NASA will collect data on the ground and in the air. Agency and industry teams can use it to test the airframe configuration and related technologies.
Moving Away From Space
NASA's technologies are typically cutting-edge. However, as with many high-end items, the benefits and applications frequently filter down to the masses. NASA's specialized technology and research frequently has civil aviation applications. It's interesting to see how NASA seems to be moving away from space and going after planes that fly closer to Earth.
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Aviation Technology
Article | September 3, 2021
The global airline industry is currently going through unprecedented financial damage. A few factors contributing are high operational costs, increased security costs, low customer satisfaction, low revenue, and frequent dynamic shifts in air travel.
Hence, it’s a high time for airlines businesses to resolve their multitude of issues for its economy to recover. To leverage this goal, the industry should leverage its most high-volume asset—analytics. Analytics will help drive the airline industry's growth rate in the coming years.
It’s because, Developing new data applications will bring a handful of digital marketing opportunities in the next five years. And these applications will bridge the gap in the industry.
Welcome to the New Age of Analytics
This topic of discussion is not new. But the new thing about analytics is that it is changing the airline industry data collection process. Analytics has become an essential part because the pandemic has forced countless non-digital airline businesses to shift to online operations.
Advanced analytics with innovative data technologies is becoming popular due to its numerous applications. To name a few, it provides smart management abilities and a proper decision-making system. So, to get a hand over this, marketers should have a razor-sharp focus to upgrade their analytics.
With advanced analytics, airlines can deliver the right information to the right audience at the right time. And when customers access the right information efficiently, they turn into prospective clients. In addition, by using analytics as part of online operations, airlines can survive without a dedicated offline presence.
With the digital transformation happening in the aviation industry, it at a turning point. The situation now is an “adapt or die” one. This policy is generating opportunities for airlines that are making significant changes to their current old business model. However, such a transformation is only possible when analytical technologies are fully adapted. This way, marketers can easily capitalize on operating online by being agile and have adaptable tools.
How can Marketers Adapt Analytics?
As a marketer in the digital era, you need to organize data with the help of technology. By organizing data, you can easily collect data from channels such as social media, loyalty programs, and other online forums. Here are some to use Analytics to empower digital transformation:
Power of Personalization
Digital technologies offer marketing and sales opportunities in direct and indirect channels. For supplies and buyers, this means they can establish greater contact with consumers. It will result in a significant way to sell and buy more products. However, you can take customer interaction a step further by offering personalized offers and discounts with analytics.
Investing in Loyal Customer Base
The most important digital opportunity comes from loyalty programs. Offering it can provide marketers with substantial amounts of customer information. Additionally, there are three other focus areas where you can use analytics:
Partnership with leading technology providers
Enhancing content
Cost maintenance
Investing in these customer-centric areas using analytics will gradually deliver proven results.
Empowering Strategies using Analytics
The next step is to develop a comprehensive data platform strategy by including a data integration layer. By combining traditional and new data sources, this layer will make a flexible and more accessible data architecture to scale airline industry data. This will allow marketers to gain insights into their changing customer behavior.
Hence, adding a data integration layer will also need considerable effort and investment to deploy a cloud platform, an analytic-data-warehouse layer, and a team that maintains the data platform.
So, what are the Exact Ways Analytics is Going to Help Marketers?
Cost reduction:
The advanced airline industry analysis will help in making cost reductions. Whether it is from fuel consumption, deploying technology, or smart manufacturing, analytics can solve cost-related issues at once. For this, airline businesses must deploy AI systems with machine algorithms, which will help marketers to collect the exact data. Then they can easily analyze the estimations and can reduce them as per the requirements.
Customer Satisfaction
The addition to cost reduction, predictive analysis can help by keeping customers up-to-date in real-time. You can enhance Customer satisfaction by promoting offers based on their demand. Once you can have genuine insights and information about your customers and understand their behavior beforehand, you can approach them with the right message, solutions, and services by giving the right reason to invest.
Most importantly, predictive analytics will help speed up the response rate to customers' queries and solve them in no time. Today the response speed matters because airline customers are constantly shifting their travel behaviors. As a result, they now seek customized approaches compared to the traditional approach.
For example, Delta Airlines deployed advanced predictive analytics with AI. They optimized their operations through innovative customer services. Delta Airlines invested a whopping $600,000 for automation software installation. The investment was successful as they were able to access their data effortlessly and were able to connect with their customers by offering them multitude of offers.
Performance Attributes
Today, airline companies need prompt and accurate performance measurements to take critical, appropriate, and timely actions. Big data analytics can automate certain daily activities. The activities such as prospects' queries, website visitors, landing page hits, and more can be watched daily or weekly. With big data being so effective it will also help you understand the core ingredients for revenue generation. In the end, such advancement will stimulate airline industry data growth.
Risk Protection
This is of utmost importance for the airline industry's growth rate. You can develop various innovative models and strategies and avoid risks while implementing them using Advanced Data Analytics.
The risks could be like a data breach, technical factors, organizational operations, customer data, and more. To counter back these risks, you should have proper strategic or annual safety objectives. Advanced analytics have higher levels of excellence that alleviate performance drifts. It will also help you to achieve and maintain through a proper monitoring and testing system.
For example, British easyJet has diminished its operational challenges using AI. With the help of IT, it used data science to improve its pricing strategy, manage inventory, and lowered risk factors. As a result, the company observed an increase in profits of almost 20% in 2021.
What’s Next for You with Analytics?
Marketers should be astute and apprehensive about Analytics. Understanding the upcoming trends of analytics are vital. In addition, the current situation also demands a holistic approach that supports technology (digitalization). Having appropriate approaches will lead you to stand out in this competitive industry.
Taking advantage of data for your existing or potential customers can help you to recognize more information about their activities. So that you can include more innovative techniques and can attract potential leads before they are gone. With technically sound data analytics you can experiment with different customer-centric strategies like:
Building responsive landing pages that get fit in every screen
Being more flexible with your prospects and enhancing interactions either through social media or a website.
Creating platform-specific content to improve customer interaction.
The strategies mentioned above will help you in collecting more data and curating on-demand content/information. By adopting these strategies, you can provide a data-backed open online platform in which you can easily connect with your customers.
Once you have grabbed the technique for your digital marketing needs, tapping big data solutions will be a much better way than before. Therefore, it is crucial to keep legacy thinking aside and welcome innovation onboard.
Frequently Asked Questions
What is the importance of analytics in the airlines business?
Analytics play a vital role in airline businesses. It helps in cost reductions, which could result in investing in better ways. Also, data helps to avoid breaches, provide safety measures, collect huge amounts of information, and enhances operational functionalities.
Does analytics require proper strategies to function in an airline business?
Yes! To implement analytics in your airline business, you need a strategic approach. Analytics provides statistical analysis. Using it, you can investigate and analyze business performance and give insights about improvement as well.
What are the different types of analytics used in the aviation industry?
There are three types of analytics that airline businesses use:
Descriptive analytics: It tells the current business operation
Predictive analytics: It shows what could happen in real-time
Prescriptive analytics: It shows what should happen in the future.
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