The sky’s the limit when it comes to the opportunities that the IoT offers airlines – but ensuring a smooth take-off for these technologies is going to rely on airline executives identifying those areas that offer the best chances for increased profitability.
For Anthony Bartolo, chief product officer for collaboration, mobility and IoT at networking and cloud company Tata Communications, these opportunities principally lie in two areas: better passenger experiences and smoother behind-the-scenes operations.
“We’re talking here about a hugely competitive industry,” he told Internet of Business. “Airlines don’t invest in digital unless they fundamentally feel they can derive very material benefits, either on the operations side or on the customer side. But we see very high levels of confidence in IoT, with the majority of airlines believing it will provide these clear benefits for them in 2018,” he says.
Air New Zealand, for example, has significantly increased its investment in digital in its corporate mission to “transform travel”, and in 2015, appointed former Google executive Avi Golan as its chief digital officer. The airline already provides young unaccompanied travellers with a digital bracelet, the Airband, so that their parents or guardians can track their journeys. Virgin Atlantic Airways has also experimented with wearables. Emirates has work underway on augmented reality and motion sensors.
In pursuit of profits
Running an airline as a money-making venture is, after all, a notoriously tricky business. Aircraft are expensive, jet fuel prices fluctuate. Bad weather can have a major impact on profits, as can industrial action at airports. Many costs are non-negotiable, in the form of fixed tariffs for access to airports and air traffic control charges.
In fact, when the International Air Transport Association (IATA) predicted “record profits” for airlines in 2017, for the third year in succession, the organization’s director and general and CEO Alexandre de Juniac simultaneously conceded that, in this respect, aviation is still the poor relation of other industries.
“Record profits for airlines means earning more than our cost of capital,” he stated. “For most other businesses, that would be considered a normal level of return to investors. But three years of sustainable profits is a first for the airline industry.”
That said, the potential benefits of IoT in aviation are far-reaching and profound, with huge implications for future profitability, Bartolo claims. “When you look at what IoT does, it fundamentally brings visibility to areas that might otherwise be in darkness and that, in many cases, remain in darkness today.”
In particular, Bartolo says, the IoT brings real-time data into situations where the norm has typically been reams and reams of paper: passenger lists, seating plans, flight operations manuals, flight despatch information, crew rosters. That has huge potential for making operations faster and less costly, such as flight turnarounds times.
Similarly, it can propel passengers into a state of near-on constant connectedness, enabling them to access inflight Wi-Fi, use their own mobile devices to access inflight entertainment and stay notified when it comes to the progress of their own journeys and those made by their luggage.
In IATA’s 2016 Global Passenger Survey, the three top areas that passengers would like to receive notifications on were 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 percent). They clearly 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.
“There will definitely be airlines providing apps by next year that show passengers exactly where their luggage is at any stage of the journey,” Bartolo predicts. “But to truly open up the Pandora’s Box of visibility, airlines will need to have a very reliable network infrastructure underpinning a huge range of IoT-enabled sensors and devices, from sensors on the aircraft itself to baggage tags and everything in between.”
These are the layers that that Tata Communications is working with airlines to add, he says. These companies are effectively supply chain businesses, he adds, moving passengers, luggage, cargo and crews from place to place – but they have much to learn from parcels companies, for example, about identifying the locations of individual entities and assets, understanding what condition they’re in and digging down into what they experience between Point A and Point B.
There is, in other words, much work still to do, not least of which will be the widespread replacement of legacy technology, aging and patchy network infrastructures and paper-based processes. But with firmer technology foundations in place, made easier and more affordable for airlines by cloud, mobile and IoT, says Bartolo, airlines will be much better equipped to provide a safe landing for new technology initiatives and digital services that deliver greater business value and, hopefully, more reliable profits.
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