Page 26 - AAA JANUARY - FEBRUARY 2018 Online Magazine

DIGITALLY

CHARGED

Working out to apply Big Data
and Predictive Analytics to an
operational airline is not as
straightforward as it seems.

Aprajita Anil

he aviation industry is changing every day. And
that one factor which could have the greatest
impact on the ongoing change is digital technol-
Togies. The results of which are only beginning
to take shape. The real impact is still years away. Most
of the airlines across the globe have boarded the dig-
ital platform through one channel or another. During a
recent media conversation, when the Air Asia Group Chief
Executive, Tony Fernandes, was asked about the upcom-
ing plans for the airline in the year 2018, he was quick to
sum it up in a single word – “digital”.

But this is not an exclusive Air Asia story. Digitalisation is transforming commercial aviation as we know it today.
But going digital is not an end in itself. The journey, which began a few decades ago, has been a success story for
many and at the same time, a not-so-impressive account for others.

Segment-of-One
A “The entire travel The evolution of the industry from
one fare to Segment-of-One has
recent survey conducted by
taken several years. Starting
the Boston Consulting Group
industry is being
from de-regulation of the airlines
found that 81 per cent compa-
affected by
nies invested in digitalisation to
digitalisation. That
government required airlines to
improve operations, while 49 per cent did dream of essentially in 1970’s, before which the US
so to increase revenue and 52 per cent to addressing the charge the same fare to all pas-
innovate. The question is, which of these Segment-of-One has sengers in a city pair, to a time
investments makes an airline a frontrunner come true,” which brought considerable
and not a follower? The answer, however, pricing flexibility. Soon came the
is not very straightforward. Although most says Dr. Jochen Kruss, an Super Saver fares, which was
of the airlines across the world are digitally economist, pricing expert then followed by other variants
ready, the factor that will help strategise an and Managing Partner of of fare rules. The industry fairly
edge for themselves, lies not in what they Simon-Kucher & Partners, quickly evolved from one fare
invest in, but in how they invest. It is import- adding to 26 fares per flight. About a
ant for digital innovation to touch every “There are, of decade ago, airlines embraced a
aspect of the airline business, changing course, massive new dimension of segmentation
the airline’s digital strategy into a business opportunities. which continues to be explored
strategy. However, these even today. It was no longer about
opportunities segmenting customers based on
To be successful, the airline must ensure their willingness to pay. Instead
that its digital investments address cus- come with several new ancillary fees represented
tomer needs, primarily, followed by other limitations too.” variations on the product being
key business objectives. offered – check-in baggage or

26 | January/February 2018 www.GBP.com.sg/AAA