Could the BT in the flat-world offer help to the business of air travel?

The announcer said they were truly sorry for the inconvenience caused as the flight I was to take had been delayed.

I was not too perturbed as I love hanging around airports – especially the international ones. I believe they are truly melting pots of humanity!

The variety of people, nationalities, and luggage – yes bags the variety of bags that one gets to see at an airport is mind boggling! Every one heading somewhere – holiday, business meetings, relocation, family reunions, event etc. it always reminds me of a beehive – everyone doing something towards the greater cause, OK may in this case I am stretching it a bit too far but still the cause here is travelling!

I always wondered if airlines business was profitable to be in then I came across this famous quote:

“If you want to be a Millionaire, start with a billion dollars and launch a new airline” – Sir Richard Branson (founder of Virgin Atlantic)

Despite all the downside of the business many intrepid entrepreneurs are still having a go at starting a new airline. Airlines business oozes of glamor and probably hence the attraction is simply irresistible.

Back home in India, we recently witnessed demise of Kingfisher Airlines – what was once a flamboyant airline found by probably the only flamboyant businessman in India.

Running airline business is tough – especially when no airline has any control of that one thing that impacts them most i.e price of turbine fuel. They do however keep tweaking other aspects of the business to stay afloat. Given the state of the economy impacting business travellers airlines are scrambling to survive.

Areas where the airlines do have some control that impacts costs are:

  1. Self-help (Transfer some of the work to passengers like e.g. check-in)
  2. Reduce consumables
  3. Reduce the turnaround time leading to increase in on-time departures

Tweaking these have to be done carefully keeping in mind customer experience. There have been quite few bizarre sounding suggestions that have made rounds. Charging customer based on their weight and the most bizarre one being charging customers for using the bathroom!

Here are few areas involving Business Technology options smartly used I believe could result in real savings:

  1. Check-in: Low cost or budget airlines have got this right. May be they could push it even further with most passengers using smart mobile phones with capabilities like Near Field Communication (NFC) why not allow downloading of the boarding pass on to the handset which could communicate with the computer at the boarding. An image of the boarding pass should suffice for the security. Having check-in counters costs money which can be reduced or in some cases even done away with! On-line check-in too could recommend seats based on history of selections as most frequent travellers have their own preferences.
  2. Baggage handling– It is said 25 million bags are lost every year and airlines spend almost US$ 100 per lost bag – huge money indeed. Technology used is still good old paper with barcode. Barcode readers have to be brought close to the tags to read. Also the tags sometimes tear during processing hence making identification of the luggage difficult. It is said most of the luggage gets misplaced in the point of origin due to torn tags. Why not use stickers with Radio Frequency ID (RFID) tags? With RFID technology costs coming down and with the volumes required it may be worth considering. Given that most travellers reuse the same bags the tags are reusable reducing the amount of paper consumed!

     

I am sure there are several more opportunities where BT could help this industry that is going thru very challenging times; I could think of the two listed I would like to hear from you.

4 thoughts on “Could the BT in the flat-world offer help to the business of air travel?

  1. Very interesting insights, indeed! Thanks! Airline CIO’s really need to be an integral part of airline business operations planning from day one!

    1. Thanks a bunch Mario!

      I fully agree. CIO or equivalent has to be brought on board from the beginning not as an afterthought!

      Having said that one still gets to see many still struggling mostly due to ineffective BT. I recently had a harrowing experience trying web check-in of an airline with nationwide presence. I finally had to call their call center (costing them more) leaving me with a memory of poor experience.

  2. Investment in airline stocks provides same % losses anywhere in world so is Sir Branson right… Birds of steel are technologies of recent past… BT, NFC, Wireless can only optimise operation cost n not change % of losses on airline biz. Root cause can be fuel or mileage or new generation planes… I think hamara bajaj or Tata manufacturers launch an airline… Our Dr’s KF was obvious bad case study for B schools operation issues… As similar to Korean air had with cultural issues…

    1. Many thanks Murali.

      When one is in a tough business with very limited control over levers every little bit helps. In the case of KF Airlines, IMHO the very idea of merging of “Kingfisher experience” with “Simplyfly” (Air Deccan) was the beginning of the end!

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