EVERYTHING YOU NEED

TO KNOW
NEED ABOUT
TO KNOW ABOUT

AIRLINE
DIGITAL
TRANSFORMATION
A FREE EBOOK

A FREE EBOOK
Contents
Contents ..................................................................................................................................................................... 1

Everything You Need to Know About Airline Digital Transformation ............................................. 2

#1. Passenger personalisation and customization. ............................................................................. 3

#2. Increase ancillary sales............................................................................................................................. 4

#3. Customer lifetime value. ......................................................................................................................... 5

#4. Improved customer support. ................................................................................................................ 6

#5. Crisis / disruption management. ......................................................................................................... 7

#6. Partner / channel integration ............................................................................................................... 8

#7. Insightful business analytics. ................................................................................................................. 9

#8. Protecting brand value. ......................................................................................................................... 10

#9. The path to innovation .......................................................................................................................... 11

#10. Protection against market disruption and profit erosion. ................................................... 12

FAQ. What are the barriers for airlines to achieving digital transformation? ............................ 14

How can Conztanz help airlines plan and implement their digital transformation? .............. 16

Digital transformation: consulting services for airlines. .................................................................. 16

Digital transformation: software services for airlines. ...................................................................... 18

Ready to start your airline’s digital transformation? ........................................................................ 19

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Everything You Need to Know About Airline Digital
Transformation
Airline Digital Transformation is something in which every airline in the world
must engage. From flag carriers thru LCCs and the new breed of regional
airlines and low-cost long-haul airlines, digital transformation defines every
aspect of how airlines will function in this transforming aviation marketplace.

But what is ‘digital transformation’? Moreover, what are the implications for airline
managers?

As it touches on every area of the airline, digital transformation means different things to
different people. Here are ten critical, actionable outcomes that the airline board and
management team can expect from embracing the digital transformation of their airline:

Customer-facing benefits

1. Customer personalisation and customisation.

2. Increasing ancillary sales.
3. Addressing customer lifetime value.
4. Improved customer support.
5. Efficient crisis and disruption management.

Business-facing benefits.

6. Integrating with partners.

7. Insightful business analytics.
8. Protecting brand value.
9. The path towards tomorrow’s innovations.
10. Protection against market disruptive forces.
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In this article, Conztanz will outline how digital transformation enables all of these
outcomes.

We’ll also highlight some of the key challenges to implementing a digital transformation
program and moreover, how to overcome them by overlaying an agile IT solution onto
your current IT assets.

Implementing agile platforms for airlines is Conztanz’s speciality.

#1. Passenger personalisation and customization.

7.5% of recipients booked a flight within a month of receiving a personalised

marketing campaign.

Our blog post on using data to improve airline personalisation reported on a survey by
Sabre and Forbes. Covering 100 airline executives, the results showed that:

61% say customer experience is the primary brand promise.

72% say operations have a significant impact on the customer experience.
52% say lack of technology stops them improving the customer experience.
41% say building customer loyalty is a top priority.

A digital transformation underpins the ability to create compelling personalisation

strategies. According to experts, the three critical stages of airline personalisation are to:

1) Use multi-channel analytics to analyse behavioural data and provide

personalised experiences for travellers
2) Identify meaningful personalisation touchpoints. However, bear in mind
that too much personalisation can seem intrusive.
3) Make sure customization extends to channels like check-in at an airport
kiosk, so the passenger enjoys an integrated experience.

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As an example of the potential benefits, one UK low-cost airline created a personalised
marketing campaign which was a resounding success.

Through its personalised approach, the airline made its customers feel ‘valued’ by
bringing their past travels to life. And the customers loved it.

It generated 1.1 million impressions and 78 percent favourable sentiments on social

media. Moreover, nearly 7.5 percent customers made bookings within a month of the
campaign’s launch. This is the power of personalisation.

#2. Increase ancillary sales

Airlines who ‘get’ ancillary marketing earn over $1 billion a year each in extra
revenue.

We recently wrote about how airlines can

use data to increase ancillary
sales – turning their islands of data into a
continent of instantly available market
intelligence. As part of the digital
transformation and using behavioural
insights and personalisation, airlines will
be able to get their share of a market
estimated at $67.4 billion in 2016.

Cross-selling and upselling are integral components of any robust commercial strategy
and airlines are no different. Passenger loyalty is arguably limited, and nowadays carriers
are reduced to quasi-commodity status. Therefore, the need to grow average passenger
revenues is imperative.

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Ancillary sales will be a crucial outcome of digital transformation. Giving passengers the
power of choice is also a differentiator.

Beyond the low hanging fruit of checked bags and pre-ordered seats, airlines are becoming
increasingly creative in generating revenues beyond ticket sales. Just look at the annual
statistics from IdeaWorks, to get a sense of the relentless rise of ancillary sales by key major
airlines that totalled $67.4 billion in 2016, a 9% increase on the previous year.

Indeed, several airlines make over a billion dollars in ancillaries. Irish carrier Ryanair made
£1.3 billion in ancillary revenue, followed by United (£4.8bn), American (£3.6bn), Delta
(£2.9bn), Air France/KLM (£1.66bn) and Southwest (£1.63bn).

Triometric. Airline Digital Transformation based on NDC and Real-Time Data

#3. Customer lifetime value.

Global air travel passenger numbers are set to double to 7.2 billion by 2035

Airlines who are in for the long haul with their customer relationships can use the insights
from digital transformation to generate new ways of segmenting customers and of
interacting with them.

Treating passengers as individuals is an increasingly data-centric and tough challenge.

IATA reckons that the 3.8 billion airline passengers in 2016 will double to around 7.2
billion flyers by 2035.

The investment that airlines make in digital transformation today will be the foundation of
the vast amount of data insights required in tomorrow’s market. By analysing the lifetime
value of passengers, airlines will be able to make more strategic marketing and
customised support plans.

Source: Decision Point. Leveraging customer analytics in airline industry.

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#4. Improved customer support.

Digital transformation will create $305bn value for airlines.

The behavioural insights from digitising the airline will enable marketers to create truly
one-to-one conversations with customers. In the past carriers might have had three
customer personas: VIPs, frequent flyers and everyone else. However, with real-time
processing of customer data from a number of silos, the airline can have smarter, more
meaningful segmentation and communications.

Automated processes will also give passengers notifications and updates which are
relevant to their context, current flight and flight history.

For example, the business class flyer will

receive an SMS update before the flight
asking if she wants a vegetarian meal
again… and the family travelling with a
baby will receive tips on keeping the
infant happy.

The scale of this potential improvement is

vast. A report by Accenture estimates that
digitalisation in aviation will create an
additional $305bn of value for the industry over the next decade. Benefits to customers
are valued at $700bn, as well as reducing the environmental impact of travel and
improving safety, security and cost.

ClickZ. The next generation of digitised airlines: Three brands on transformation in travel.

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#5. Crisis / disruption management.

SMS is the most popular notifications channel for flyers.

Automated communications can also improve customer service and, importantly, take the
strain off the airline’s human frontline staff when there is a disruption.

In our blog post on how Real-time Event Detection & SMS Automation Eases The Pain For
Airline Passengers, we highlight how the ConztanzONE agile platform can power an
automated response to flight delays or cancellations.

These programmable rule-based responses can range from offering a mobile hotel
booking – thanks to our partner solution Switchfly – through to automatically booking an
alternative flight, simply by replying to an SMS or any other relevant actions.
Airlines will always find themselves reacting to situations like bad weather or industrial
action, but automated responses can be an opportunity for airlines to differentiate
themselves by reducing the impact on
passengers.

While other airlines have angry

passengers rioting at their information
desks, passengers on the digitised airline
will at least have a swift resolution to
their problems.

In IATA’s 2016 Global Passenger Survey, the three top areas that passengers would like to
receive notifications on their flight status and changes (cited by 85 percent); baggage status
and waiting times for delivery (60 percent) and waiting times at security/border control (58

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percent). They want to receive that information via their mobile devices – 53 percent by SMS
text messages; 22 percent via a mobile app; and 21 percent by email..

Internet of business: Airlines on digital transformation journey as IoT takes flight

#6. Partner / channel integration

APIs enable airlines to leverage their flight portfolio.

Thanks to data-driven startups, passengers increasingly expect to be able to book their entire
journey from within a single transaction. Flights, car hire, excursions, accommodation, the goal is
to enable the whole trip to be arranged by visiting a single website on a smartphone.

Airlines can also leverage other companies’ APIs to extend their offer. In our blog post ‘Airlines.
Monetize Your Relationships With APIs’, we highlighted how Saudia had fast-tracked the
launch of an entire holiday package by using Expedia’s affiliate API. This enabled Saudia to offer
their customers a database of some 11.5 million property photos and 6.5 room photos from
within Saudia’s branded environment.
Once again, taking full advantage of the API revolution requires the digitised airline to have real-
time access to multiple customer and flight databases. The ConztanzONE agility platform is an
elegant way to overlay those capabilities onto an airline’s’ current IT infrastructure.

With virtual interlining, the aim is to present travellers with simple and accessible flight options
across different airlines when booking multiple flights to get to their destination – without the
need for a formal partnership between those carriers. What we’re seeing here is increased
‘virtual’ collaboration, enabled by technology…

Amadeus. Low-cost long haul & digital transformation.

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#7. Insightful business analytics.

59% of airlines plan to invest in advanced analytics.

Digitized airlines can use sophisticated analytics in a number of ways to improve service
and cut costs.

Predictive analytics. Customer insights enable the airline to predict sales propensity at an
individual level, and likely income at a corporate level.

Multichannel analytics track customers through its entire experience through multiple
touch points, including call centre, in-app, partners and website.

Advanced customer analytics identify patterns in individual or group behaviour to add rich
insight and sophisticated segmentation to your customer database.

Big data analytics (as offered by Milanamos) enable airlines to predict potential traffic and
revenue from new routes instantly.

Weather analytics enable airlines to proactively re-route aircraft to, for example, avoid
flight turbulence.

The reason that digitised airlines can

leverage more out of analytics is that
they can enjoy actionable insights
because all parts of the business are
running integrated data systems with
real-time data. At the end of this article,
you’ll see how the ConztanzONE agile
platform is the enabler for ubiquitous,
real-time data management.

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A recent report by Unisys that surveyed 29 senior airport executives at an Airports Council
International Conference revealed that as much as 59% of those surveyed were looking to invest
in advanced analytics solutions in the short-term, while 31% percent were already using them.
Most wanted to make use of analytics in passenger flow (27 %); airport operations and asset
tracking (22%); geolocation and wayfinding (22%); passenger shopping and retail habits
(15%).

ET Tech. Aviation industry too is betting on analytics to enhance customer experience.

#8. Protecting brand value.

Digital innovations like NDC enable airlines to control their brand.

A major worry for airlines is that risk

becoming commoditised. With third-party
apps offering instant price-comparisons or
bundling the flight into a ‘total travel
experience’, passengers can pay little
attention to an airline’s brand.

However, a digital transformation can give

airlines the means to recapture control of
their brand. A prime example of this is IATA’s NDC initiative. In our blog post ‘How Airlines
Can Implement NDC Quickly’, we show how airlines can promote their brand, even in re-
seller channels.

The digitised airline can also use integrated data to promote its brand more effectively to
customers and encourage repeat business. Many carriers also view ‘social amplification’ as
a significant brand opportunity. The next section covers this in more detail.

Airlines want to embrace digital retailing and take back ownership of their customer relations
overhauling their from beginning to end, but to do this, they need to transform how they sell to
their customers, primarily via the agency channel. This means current merchandising and
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ticket-distribution strategies and systems to meet the needs of the various channels available
for connecting with their customers.

Triometric. Airline Digital Transformation based on NDC and Real-Time Data.

#9. The path to innovation

Digitized airlines will experience non-stop innovation.

Imagine that your customers became ambassadors for your airline, sharing their
experience with hundreds of friends and family on Facebook and Twitter. That’s just one
of the countless innovations that digitised carriers can enable.

In fact, in our blog post about airline innovation, we cover how Iceland’s WOW airline has
suggested that people with a broad social following could travel free in exchange for
social reviews. That’s how valuable ‘influencer marketing’ is.

By joining up all the touch points around the business, airlines can introduce exciting
innovations such as the AirBand tracker for unaccompanied minors.

And with the Internet of Things (think copy machines through to light bulbs) and
Bluetooth beacons in airports, airlines can gather more insights about customer behaviour
and deliver increasingly personalised services. Combine those insights with sophisticated
analytics, and digitised carriers can put their marketing into overdrive.

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Air New Zealand’s AirBand trackswhen
unaccompanied
at their destination.
minors from airport check-in through to

The AirBand wearable, which is offered at check-in on domestic and international routes,
contains a chip that is scanned “at key stages of the journey to trigger text notifications to up to
five nominated contacts”. The wearable is compulsory for children travelling alone aged
between 5 and 11, but optional for those up to 16 years of age.

Internet of Business. This airline is using IoT wearables to track young flyers.

#10. Protection against market disruption and profit erosion.

Agile data enables the C-Suite to change direction fast.

Apart from regulatory changes, the competitive environment can change rapidly. In the
first half of 2017, no less than 21 airlines commenced operations whilst 12 carriers ceased
operations permanently. New competitors or resellers can force airlines to come up with
a rapid response in order to either protect their business or leverage new opportunities.
And there’s the changing nature of data itself. Who would have thought even two years
ago that Artificial Intelligence chatbots would be answering consumer questions and
booking their flights? Our blog post ‘Tomorrow’s Travelers Aren’t Interested In Your

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Website’ gives an insight into how airlines are going to have to re-think their marketing
platform in the near future.

Of course, the basis of meeting these challenges is having real-time access to agile data.
It’s the enabler of digital transformation for airlines.

“Quite often, the human brain produces unstructured questions, such as ‘I’ve got a break some
time between June and July, and I can spend £1000, where should I fly to?’” says Professor
Dimitrios Buhalis, Director of the eTourism Lab at the School of Tourism at Bournemouth
University. “But most of our current technology systems don’t deal with unstructured questions;
they deal with very structured, data-driven enquiries like, ‘I need to book a flight to Miami next
Friday’”.

4Hoteliers. Embracing airline digital transformation: A spotlight on what travellers value.

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FAQ. What are the barriers for airlines to achieving
digital transformation?
Digital transformation is the strategically correct route for airlines to evolve,
and unlock their full commercial potential, but it is highly complex and
presents enormous challenges to airline management teams.

Here are the answers to some of the most frequently asked questions about
implementing a digital transformation.

What are the risks of doing nothing?

The significant risk is becoming irrelevant and uncompetitive. Airlines who want to be in
business in ten years have to start planning for digital transformation now. Conztanz
provides a digital transformation consulting service so that carriers can create a custom
roadmap.

Will this threaten our current IT investment?

Airlines are large and complex operations, and their systems are normally entrenched in
an IT architecture that is significantly outdated. Data sits in silos across the organisation
and therefore severely limits an airline’s ability to adopt a best-of-breed commercial
strategy. On the other hand, upgrading the IT infrastructure represents an enormous and
prohibitive investment. The good news is that carriers don’t have to throw out the baby
with the bathwater. It doesn’t have to. The ConztanzONE agile data platform plugs into
your existing IT resources, joining data silos together to enable real-time insights.

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ConztanzONE also has a growing portfolio of ready-made features, such as disruption
management solution or customer analytics.

Read on to find out about our software and consulting services for your digital
transformation.

Which airlines are doing digital transformation best?

That’s a tough question to answer. As this article has highlighted, there are at least ten
areas where digital
transformation can change
the airline. In the area of
chatbots, KLM is ahead of
the curve. When it comes to
the Internet of Things, Air
New Zealand has made an
impression with their
AirBand technology. In terms
of social leverage, Iceland’s WOW is a trendsetter.

Can your airline do this? KLM is ahead of the curve with their Messenger chatbot.

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How can Conztanz help airlines plan and
implement their digital transformation?
By definition, data and IT resources are at the foundation of a digital
transformation. Around that foundation are business processes, employee
programs and marketing programs. Conztanz is the engine that powers the
implementation of an agile, robust IT platform for an airline’s digital
transformation journey.

Digital transformation: consulting services for airlines.

Airline industry publication Tnooz (see panel below) wrote about our airline survey to see
how available airline data is, and in how many silos it is stored. Of the 20+ airlines we
interviewed, 46% had their customer data held in between 5 and 10 separate databases.

Enabling real-time access to data from multiple silos to have a consolidated view of each
passenger experience is a core skill for Conztanz, and a fundamental requirement for
airlines who are embarking on a digital transformation.

Before spending a cent on solutions or new processes, Conztanz can fast-track your
digital transformation initiative with four critical consulting skills:

• Provide support to succeed in your CRM and digital initiatives around data, from
scoping to implementation.
• Define & implement your strategy CRM, Ancillaries, Personalization, e-services, IBE.
• Understand your stakes and launch a pilot for your NDC project.
• Audit your E-commerce architecture.

We also have a strong experience and offer consulting services and other data-related
topics for PSS Migration and PNR security projects.

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The Conztanz survey confirms this point for airlines, as it uncovers that 46% of respondents
maintain between five and 10 traveller data repositories – a key issue as multiple data sources
often prevent airline executives from relying on consistent, real-time, end-to-end data with a
single, actionable view.
The data is there somewhere, but pulling it out at the right place and the right time is still a
major issue – not to mention a constant synchronization challenge across all repositories.
More importantly, this survey revealed which areas have the starkest contrast between what is
business-critical for an airline – and – their perceived current state of data access.
On the above chart, the biggest disconnect discovered is ‘End-to-end data’, with a whopping 71
percent. (Note: 96% saw end-to-end data as business critical, but only 25% of airlines
interviewed said they achieved it, thus a 71 point gap.

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Digital transformation: software services for airlines.

Put simply, the ConztanzONE agility platform connects all your existing data silos into
a single framework and provide the fast and stable foundation for a digital
transformation.

• No need to change your current IT.

• Real-time access to consolidated data
• Enable orchestration of back-end systems, new applications and partnerships to be
developed.
• Feed your front-end applications with meaningful, personalised information
• The fast and stable foundation for a digital transformation.

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 “Designed specifically for the airline industry, ConztanzONE allows a carrier to unchain itself
from the shackles of its legacy IT systems and adopt the modern digital way of taking care of
their customers. Whether your IT has grown organically or been inherited as a result of
mergers, ConztanzONE is the solution.”

Raphael Bejar
Chief Commercial Officer

VIDEO: ConztanzONE, the First Independent Data Agility Platform for Airlines & Airports from Conztanz on
Vimeo.

Ready to start your airline’s digital transformation?

Yes. We’re ready to talk about digital transformation.

I’m interested in

• Consulting services, to build our project roadmap.

• ConztanzONE, to enable our digital transformation.

• Answer our “Airline Customer Intimacy Data” survey, to highlight gaps in your
data.

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