The air travel industry has suffered dramatic losses since the start of the COVID-19 pandemic. According to Forbes, the industry has fallen by over $400 million in value since 2019. But today, an influx of demand for both domestic and international flights has put new pressure on airlines to bounce back in a dynamic, digital, and sustainable way.
The challenges associated with this increase in demand were on public display in the summer of 2022, when delays, cancellations, and passenger frustrations plagued the industry. But while these struggles are often attributed to the industry’s labor shortages at the time, technology issues were also at play.
“Airports need to address critical challenges such as optimizing the passenger experience, improving forecasting to minimize delays and disruptions, and ensuring privacy and data security” through cloud technologies, according to Forbes. But the airline industry is particularly complex due to the orchestration required between multiple parties and the legacy systems engrained across these parties. This complexity makes digital transformation of any kind difficult.
Fortunately, cloud-native technologies that can directly address issues in the air travel industry are more approachable and streamlined than ever before. In this article, we address the key challenges facing the air travel industry, with recommendations on how airlines and their partners can leverage cloud-native tools to improve operations, passenger experiences, and business outcomes.
01Business Goals for Airlines Are Changing
It’s estimated that international travel spending among U.S. travelers soared by 228% year over year in 2022, according to Forbes. This represents an opportunity for airlines but also introduces new challenges. That’s why airlines are looking to cloud services—”Cloud computing is transforming the airline industry across the business spectrum by improving financial performance, operational reliability, and the passenger experience,” as Deloitte describes.
Existing systems function based on static analyses based on historical precedent, which no longer makes sense given the industry’s proclivity for market disruptions. However, airlines struggle with inherent systems and processes that make cloud-native technologies difficult to implement. According to McKinsey, “Airline systems and most of operations—including crew planning, maintenance planning, and ground staffing—run on static assumptions…. Assumptions about how people fly may have outlived their usefulness.”
02New Challenges for Airlines in Key Lines of Business
Overcoming these barriers begins with a deeper understanding of the business challenges facing modern airlines and how technology plays a role in each of those areas. For example:
- Operational inefficiencies. Airlines must streamline operations to meet increased demand and offer new services, such as more automated check-in and boarding processes. But “the fact remains that most airline online platforms are only capable of a small percentage of all possible transactions, leading to increased demand during times of disruption,” as McKinsey describes.
- Evolving consumer expectations. Consumers expect more streamlined experiences from the point of engaging an airline brand online during a search for tickets to post-arrival services. “Cloud computing can enable safer, seamless experiences for commuters… using mobile devices and Wi-Fi technology” along with other capabilities, according to Forbes.
- Difficulties securely sharing data with partners. Airlines must collaborate with airports, supply chain organizations, baggage handlers, retail partners, and others on a global scale, but struggle to retain their “ownership, control, and privacy” of their data as they share with these organizations out of necessity; “Cloud computing enables access to the data they require” while supporting these capabilities, according to Forbes.
In other words, airlines must move on from legacy technologies that are reliable and familiar but no longer sufficient in terms of their scalability, longevity, and performance.
03Opportunities and Scalability with Cloud Capabilities
Cloud-native technologies such as digital twins, advanced analytics, and platforms that streamline collaboration between industry partners can help airlines address these challenges. Here is a closer look at some of the technologies and how they can transform digital operations in air travel today.
04Digital Twins: Improving Maintenance and Capacity Planning
Airlines are under tremendous pressure to get their planes back in the air and operating at peak performance. One cloud-native technology particularly well-suited to this challenge is digital twins, which simulate airlines’ physical logistics and even aircraft’s physical processes in a virtual environment.
05Advanced Analytics: Supporting Intelligent Operations and Services
Airlines capture large quantities and different types of data, but they need more sophisticated analytics tools to properly interpret and utilize that data. Cloud-native advanced analytics can help airlines gain insights into customer behavior, market trends, and operational performance to inform better decisions.
06Cloud-Based Digital Platforms: Streamlining Collaboration Across Partners
The cloud also supports platforms that allow airlines to securely share data with partners while retaining their ownership, their control, and the privacy of their data. This makes it easier for airlines to collaborate with airports, suppliers, retail partners, and other stakeholders on a global scale.
07Digital Enablement Yields Real Results in Key Lines of Business
Experts anticipate advancements in these areas will yield real results in terms of operational, logistics, and supply chain improvements, as well as better outcomes in terms of passenger loyalty, experiences, and revenue. “Through digital enablement, we believe that airlines could reduce controllable delays… by between 10 and 20 percent,” says McKinsey. These and other improvements driven by digital enablement can help airlines “save millions of dollars annually, and more importantly, improve the customer experience.”
Here is a closer look at some of those improvement areas:
- Finance. Improving data visibility, analytics, and exchanges between airlines and customers leads to more accurate forecasting and better financial outcomes. “Previously hidden insights are enabling airline leaders to better plan and manage their business in the face of rapidly changing market conditions,” as Deloitte describes.
- Operations. Cloud solutions can create a “single source of truth” for operational data. Airlines can use cloud-native analytics to detect trends, identify bottlenecks, and allocate resources more strategically. Prescriptive analytics can help airlines optimize workforce management and eliminate staffing shortages as well.
- Customer Experience. Cloud-native platforms enable airlines to deliver personalized experiences that are tailored to individual needs in terms of travel services, loyalty programs, promotions, and more. Mobile apps also make it easier for passengers to book flights and access services.
- Partnerships. Streamlined data exchanges between airlines and their partners can lead to more efficient inventory management, improved delivery times, and better customer service. Improving closeness with partners allows for new business opportunities, such as new rewards for loyal passengers.
08Scaling Cloud Capabilities with Emerging Needs
Just as global markets and consumer expectations evolve, airlines must also modernize their technologies to meet new demands. Cloud-native technologies hold the key to supporting airlines with the agility and scalability they need to stay ahead of the curve. As Deloitte describes for airline executives: “From optimizing strategic planning, empowering talent, streamlining the supply chain, reducing flight delays, to creating a frictionless travel journey, cloud helps make your possible a reality.”
09Partner with Semifly for Your Cloud-Native Solutions
Semifly can help you capitalize on cloud advancements and make your cloud transformation a guided and seamless process. Contact us today for a free consultation and begin taking advantage of cloud-native technologies for your business.
← Back to Insights