The Biggest "Technology Disruption" in The Travel Industry
The Biggest "Technology Disruption" in The Travel Industry
The Biggest "Technology Disruption" in The Travel Industry
2 The always-connected traveller: How mobile will transform the future of air travel
Table of contents
Foreword 1 Executive summary Airline mobile functionality Airport operational use of mobile Developing an airline mobile strategy 2 Market overview Global trends Traveller requirements Pre-trip At the airport On-board At the destination Post-trip 3 Airline mobile standard functionality today or within 12 months Defining standard functionality Common trends across markets Unique market trends Review of common mobile functionality Mobile reporting and tracking 4 Emerging capabilities 1-2 Years Ancillary services Promotions Social media Airport operational uses of mobile 5 Advanced functionality 3-5 Years Tablets Emerging mobile airline capabilities Emerging general mobile trends and applicability for airline mobile development 6 Developing a mobile strategy Development strategies Internal organisation (resources and management) Defining an ROI for mobile development 7 What is mobile innovation? Defining mobile innovation in an airline context 8 Summary Challenges Airline mobile travel timeline 9 About Travel Tech Consulting Inc. 8 About Amadeus 3 4 4 5 5 8 8 10 11 11 14 14 15 16 16 16 17 18 18 20 20 21 23 23 24 24 26 27 30 30 31 33 35 35 36 36 36 38 38
The always-connected traveller: How mobile will transform the future of air travel 3
Foreword
Mobile is an unstoppable force thats set to transform the traveller experience. In a mature industry such as aviation, it is crucial to combine a seamless customer experience and loyalty programme with the ability to differentiate. Mobile services give airlines new opportunities to achieve both. Furthermore, whilst mobile is not widely used for revenue generation today, the channel is undoubtedly the most intimate and flexible way to interact with a customer, offering the ability to deliver tailored offers at any stage of the travel process. This year we are seeing increasing numbers of our airline partners seeking to understand how they can innovate with mobile and many are planning a phased roll-out of new services to their customers. This whitepaper is focused on helping airlines to better make those strategic decisions, whilst providing insight into traveller wants and needs. Our industry has been experimenting with mobile services over the previous few years and a number of basic services are now industrialised delivering benefits to travellers today. But it is the next five years that offer the greatest opportunity. Increasing numbers of travellers are connected as the number of mobile phones has outstripped the worlds population. Travellers are now empowered with advanced smartphones able to deliver new functionality related to location, payments and realtime information flows. Whats for certain is that mobile will be used to enhance the travel experience. The question is who will be centre stage in the revolution? A plethora of players are seeking to supply services to consumers through mobile - from application developers to global internet giants. As owners of the customer relationship, airlines are in prime position to enhance their customers experience and drive greater revenue, but our industry must first understand the future landscape. With this whitepaper, we are providing an independent, expert perspective on how your airline peers are engaging with mobile for strategic advantage and the services that travellers demand. We are also seeking to demystify many of the new mobile technologies that will impact our industry in the immediate and medium term. It is clear that travellers see the value that mobile services and information can add to their travel experience. It is now the responsibility of us all to understand and navigate the rapidly changing world of mobile in order to differentiate, secure customer loyalty and quickly adapt to new business models. We look forward to participating in the debate we hope and anticipate this paper will generate.
Julia Sattel
VP Airline IT, Amadeus IT Group
4 The always-connected traveller: How mobile will transform the future of air travel
1 Executive summary
Airline mobile functionality
There is no longer any question that mobile technology is transforming the travel experience. A mobile phone has become a standard accessory for all travellers. Passengers rely on mobile technology for instant information and connections to their social network. Airlines continue to introduce mobile capabilities to improve passenger processing and information flow. Globally a set of standard functions have emerged for airline mobile applications. This paper looks at mobile airline capabilities today, what is planned over the next 1-2 years and what we can expect in 3-5 years.
The always-connected traveller: How mobile will transform the future of air travel 5
Mobile devices are increasingly becoming electronic wallets and sensors to the world around us. Two important advanced mobile device capabilities that will enable new services for airlines are: Mobile payments The adoption of universal mobile payment systems will allow the passenger to use their phone to pay for goods and services. NFC The integration of near field communication (NFC) technology into the handset. NFC involves two pieces of hardware. One is an NFC chip in a mobile phone and the other is an NFC reader at a merchant or transportation facility. NFC will allow the passenger to speed through the airport check-in and boarding process.
6 The always-connected traveller: How mobile will transform the future of air travel
Infrastructure
Mobile must be an extension of current systems. Most airlines tie their mobile logic and business rules to their e-commerce engine, but integration with the Departure Control System and Passenger Service System is equally important to optimise ancillary delivery and provide mobile services for disruption situations.
The always-connected traveller: How mobile will transform the future of air travel 7
Mobile technology promises to transform the travel experience. The always-connected traveller will expect and demand information and services that simplify the planning, booking and overall airport experience.
8 The always-connected traveller: How mobile will transform the future of air travel
2 Market overview
Global trends
According to market research firm iSuppli Corp., the number of worldwide subscriptions for wireless services reached 5 billion in September 2010, equalling 73.4 percent of the earths population.1 (Figure 1) Figure 1
7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 07 08 09 10 11 12 13 20 20 20 20 20 20 20 20 14
A smartphone is essentially a converged device bringing together telephone, personal data assistant and other functions such as music players into an integrated mobile computing platform. A smartphone differs from a full feature phone in that it has an independent operating system (OS). The smartphone revolution was triggered with the introduction of the Apple iPhone in 2008 and now represents a global battleground between three primary OS providers, Apple (IOS), Google Android and RIM Blackberry. Mobile manufacturing heavyweight Nokia, which still dominates handsets worldwide, was caught unprepared for the smartphone revolution and has recently aligned with Microsoft abandoning their Symbian OS in favor of Windows 7. The most surprising growth has been by Googles Android OS which is used by a variety of manufacturers including HTC, Motorola and Samsung. IDC predicts Google Android will dominate 39.5% of the global smartphone OS market for 2011.3 With this type of rapid growth it is no wonder that mobile technology has become an integral part of an airlines service offering. Services such as mobile check-in, 2D Bar Code Boarding Passes (BCBP) and itinerary management are available today for most carriers across multiple regions of the world. Mobile technology has impacted all phases of the travel life cycle. With advanced wireless networks, growing worldwide adoption of web-enabled full feature phones, smartphones and tablets; passengers are no longer tethered to a desktop PC, but now have instant access to information anywhere, anytime from multiple devices. Mobile technology provides airlines an opportunity for continuous engagement across the travel life cycle. (Figure 2)
With 5 billion mobile devices across the globe and the rapid adoption of smartphones in many markets, mobile connectivity has become a major fabric of our society. The worldwide smartphone market grew 79.7% year on year in the first quarter of 2011 , according to the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker.2
Figure 2
Pre-trip Post-trip
Figure 2
Mobiles impact across the travel cycle on a variety of devices
At airport
At destination
Explore, connect and share
On the road Smartphones & tablets In the hotel Wi-Fi & wired networks
On board
Plan, entertain, and explore
On the plane Wi-Fi Connectivity
Source: Travel Tech Consulting Inc. 1 Rebello, Jagdish PHD iSuppli Press Release September 17, 2010 http://www.isuppli.com/Mobile-and-Wireless-Communications/News/Pages/Global-Wireless-Subscriptions-Reach-5-Billion.aspx 2 IDC Press Release May 5, 2011 http://www.idc.com/getdoc.jsp?containerId=prUS22815911 3 IDC Press Release http://www.idc.com/getdoc.jsp?containerId=prUS22762811
The always-connected traveller: How mobile will transform the future of air travel 9
The always-connected passenger has an evolving set of requirements and expectations for information and services. This paper reviews how mobile technology is being used today by major carriers worldwide and what is coming in the near, mid and longer term future to improve passenger efficiency, increase loyalty and drive incremental revenue. This study contains research from two primary sources: 1. A customer survey conducted by JD Power and Associates in the fourth quarter of 2010. The study covers 2,978 customers across 5 regions: Asia, Europe, Latin America, Middle East and North America. 2. Nine detailed interviews with airlines based in Europe, Asia, the Middle East, Latin America, Australia and the United States conducted by Travel Tech Consulting, Inc during April-May 2011. This interview information was expanded with general observations and monitoring of airline mobile developments worldwide. Airlines are no longer limited to interacting with customers at the airport or onboard the aircraft. Mobile technology provides ubiquitous connectivity enabling airlines to continuously interact with their customers throughout the travel life cycle. Age and travel frequency also impact the use of mobile technology for planning and booking travel. A recent study by Amadeus on U.S. travellers mobile behaviour shows that one third of frequent flyers and one quarter of 18-34 year olds utilise smartphones and tablets for booking compared to 16% for total travellers. (Figure 3)
Figure 3
0%
20%
40%
60%
80%
100%
93%
PC/Laptop
Smartphone
Smartphone app
Tablet
15% 25% 8%
Total 18-34 8+ trips
Tablet app
13% 27%
Base: Total (n=1,000), Age 18-34 (359), 8+ trips (85) Source: Amadeus U.S. Air Travel Survey April 2011
10 The always-connected traveller: How mobile will transform the future of air travel
Traveller requirements
Clearly mobile technology is impacting every step of the travel process, but what types of services do travellers want today and tomorrow on their mobile device? The JD Power research provides some insight. (Figure 4) It is interesting to note that real time updates on flight status on mobile as well as baggage information are clearly innovative features desired by passengers. Passengers are also anxious to receive directions on mobile devices and are ready to embrace mobile check-in and self luggage tagging. Specific market segments are particularly important for mobile services. Frequent business travellers have long been early adopters of next generation technology and therefore are ideal for targeted apps that help them be more productive on their trip. Business trips are often subject to frequent changes and thus the ability for a mobile app to help a traveller rebook their flight mid-trip, is an essential capability. Business travellers also need to track and capture expenses, so allowing the easy purchase and recording of corporate approved ancillary services is an important tool airlines can provide to this segment. Other segments may also have unique mobile needs such as frequent leisure travellers, families and groups. Mobile marketing is an extension of an airlines overall marketing approach to these segments and thus products and services need to be tailored to each segments needs. Travellers also tend to act within different segments during different types of trips, so it is essential that services match the specific persona of that traveller. The needs of a business traveller on a trip with his family are often quite different to their needs during a business trip. Airlines need to work hard to deliver mobile services that not only reflect a travelling segments needs but also recognise the role the traveller is playing on a particular trip.
Figure 4
Innovative features / services Which of the following innovative features or services would you use?
0%
10%
20%
30%
40%
Real time update on flights status on mobile Calendar display Real time baggage arrival update on mobile Use mobile onboard Receive directions on mobile (gates, etc.) Use mobile for booking, check-in, etc. Self luggage tagging Airport kiosks to buy additional services Pay in advance for extra services Dynamic FFP profile
39.9%
39.3%
36.7%
36.3% 35.7% 31.7% 31.4% 31.1% 28.5% 26.6%
8.1%
Total - Global Sample
The always-connected traveller: How mobile will transform the future of air travel 11
Pre-trip
Research from JD Power asked consumers the relative importance of each step of the travel process. Passengers rated the pre-flight and in-flight experience as the most important part of the process. Passengers are looking for easy ways to plan, book and board the plane.
At the airport
Today the airport environment is still a crowded chaotic experience particularly if something goes wrong. The biggest concern from the passengers perspective is how airlines handle disruption management and checked luggage.
Figure 5
Overall airline experience: importance of every step W hen flying how important are the following 6 steps for your overall airline travel experience?
Figure 6
Aspects of travel for improvement Which of the following aspects of your airlines travel experience do you think could be improved?
0% 10% 20% 30% 40% 50%
Disruption management Check-in / Baggage process Seating Make changes to booking In-flight service In-flight Pre-travel arrangements Pre-departure Connecting Leaving the airport Post-travel
Sample: Total, 2,978, WTD.
42.4%
33.8% 32.5% 30.3% 28.7% 27.1% 26.2% 24.4% 19.6%
Please Note:
Baggage claim at destination Optional service fees Boarding / Deboarding Choosing & booking flight Flight crew experience Other
11.8% 3.2%
> Top 3 selections are combined > A multiple reponse set Total - Global Sample
Source: 2010 JD Powers Global Airline Traveller Survey commissioned by Amadeus Source: 2010 JD Powers Global Airline Traveller Survey commissioned by Amadeus
12 The always-connected traveller: How mobile will transform the future of air travel
With the severe winter weather experienced in certain parts of the world earlier this year combined with the volcanic eruption in 2010, it is clear why service disruption is a major focus of passenger dissatisfaction. New systems for self-service baggage drop and technology to track baggage carry the promise of improve baggage servicing. Mobile technology will also play a role with many airlines implementing systems to notify the passenger via their mobile device that their bag is on-board or to
help identify the location of a missing piece of luggage. Airlines will use mobile communication to ease disruption management offering alternate flights via mobile messaging as well as electronic vouchers to compensate the passenger for service delays. Mobile check-in is just beginning to take hold in many markets around the world, but it is expected to grow dramatically in the next 2-5 years. (Figure 7)
Figure 7
Preferred method
Asia Europe Latin America
45.4% 40.3% 8.4% 4.3% 1.6% 0.0%
Online with PC
50%
Middle East
59.7% 26.5% 5.5% 3.2% 4.8% 0.5%
North America
Check-in desk
59.4% (+9.4%)* 19.3% (-13.2%)* 13.7% (+1%)* 5.6% (+2.2%)* 1.8% (+1%)* 0.2% (-0.3%)*
Total - Global Sample
32.5%
62.7% 10.8% 20.2% 5.6% 0.3% 0.4% Other Mobile / Smartphone Self-serve kiosk
12.7%
3.4%
SMS / Text
0.8%
0.5%
Sample: Total, 2,978, WTD *Variance between Preferred and Actual Purchase Channel
Source: 2010 JD Powers Global Airline Traveller Survey commissioned by Amadeus
Preferred method
The always-connected traveller: How mobile will transform the future of air travel 13
Most carriers interviewed admitted that a portion of mobile check-in is shifting some of the activity from online, but also reported that a significant percentage of mobile check-in is replacing airport check-in queues. This reinforces the nature of the mobile device as trusted personal accessory. An important mobile selling opportunity for airlines is the sale of ancillary services at the airport. Globally, most airlines have recognised the value of selling ancillary services to passengers. These services are expanding and the opportunity to pre-sell meals, baggage fees, speedy boarding and lounge access on a mobile device will grow significantly over the next 1-2 years. (Figure 8)
Figure 8
Meal Excess baggage allowance Speedy / priority boarding Snacks Premium beverage Lounge access Wi-Fi service Headphones Media player Other None
8.1% 7.2% 7.1% 5.7% 5.0% 4.6% 4.1% 3.0% 2.7% 1.0% 76.3%
Please Note: A multiple response set Sample: Total, 2,978, WTD Source: 2010 JD Powers Global Airline Traveller Survey commissioned by Amadeus
Directly online Check-in desk Kiosk Travel agent Other Ticket office Mobile, smartphone
Total - Global Sample Source: 2010 JD Powers Global Airline Traveller Survey commissioned by Amadeus
14 The always-connected traveller: How mobile will transform the future of air travel
On-board
Over 2,000 aircraft are Wi-Fi-equipped globally. With major carriers such as Delta and US Airways investing in Wi-Fi, the always-connected traveller is fast becoming a reality. In some parts of the world, the use of 3G phones is also allowed on board. Given this new level of connectivity, airlines have a unique opportunity to provide enhanced services and expand their merchandising efforts on-board. The concept of a mall in the sky is truly becoming digitised providing a unique selling environment for the airlines.
At the destination
By its very nature, mobile technology is having the biggest impact at the destination. All types of travellers need to explore, connect and share their experiences. Airlines that are tied to specific tourist destinations (e.g. Hawaii, New York, Amsterdam) have a natural affinity to these locations and providing access to local content, activities and merchant offers helps to reinforce the view that the airline brand is an expert in that destination. Offering destination-based content which enhances the ability for the passenger to navigate the location provides the airline with a natural way to extend passenger interaction.
Given this new level of connectivity, airlines have a unique opportunity to provide enhanced services and expand their merchandising efforts on-board. The concept of a mall in the sky is truly becoming digitised providing a unique selling environment for the airlines.
The always-connected traveller: How mobile will transform the future of air travel 15
Post-trip
Social media is having a major impact on all parts of the travel life cycle. Feedback is instantaneous, causing airlines to respond to customers where and when an incident occurs. This is a worldwide phenomenon as reflected by the JD Power research. (Figure 9) With 250 million active mobile Facebook users, the influence and impact of mobile social media on travel purchases and behaviour is significant.
Figure 9
Social media total and country use social media for travel related purposes % of respondents using social media travel related sites
100% 90% 80% 70% 65% 60% 50% 40% 30% 20% 10% 0%
92% 85% 71% 60% 59% 53% 42% 46% 81% 71% 77% 78% 78% 72% 69% 59% 53% 54% 66% 59% Total Asia Europe LA ME NA
C Ho hin ng a Ko ng In di a Ja pa Si ng n ap or e Fr an Ge ce rm an y Ita ly Sp ai n Sw e/ De n
Ar UK ge nt in a Br az il Ch il M e ex ico Eg Sa ud ypt iA ra bi a UA Ca E na da
To ta l
Source: 2010 JD Powers Global Airline Traveller Survey commissioned by Amadeus Sample: Asia 700, Europe 574, Latin America 700, Middle East 403, North America 601 & Total, 2,978, WTD.
US
16 The always-connected traveller: How mobile will transform the future of air travel
The always-connected traveller: How mobile will transform the future of air travel 17
Middle East
In many Middle Eastern countries the population is dominated by people under 35 years of age where mobile technology is part of their everyday lives. In some of the more affluent Arab countries it is not unusual for passengers to own two mobile devices. The world has seen the impact of social media on the regions politics and airlines in the region are sensitive to this very connected youth centred culture and are deploying applications to take advantage of mobile/social trends.
North America
With smartphones having their roots with North American companies, the focus of North American airlines has been on the three market leaders: iPhone, Android and BlackBerry. The app store phenomenon which also began in the U.S. has prompted many U.S. carriers to develop their own mobile apps. In the U.S., smartphone ownership is expected to surpass full feature phone ownership this year and building apps for smartphone platforms has become a standard development strategy for most U.S. based carriers.
Latin America
Although smartphone penetration varies across the region, mobile technology is a common phenomenon across Latin America. Over the last 12 months many countries in Latin America have embraced smartphones and use the device as the preferred way to connect to the Internet. This shift to smartphones is impacting Latin American carriers who must now prioritise their e-commerce strategy for mobile as it becomes the preferred platform for web-based activity.
Europe
Europe has always benefited from a common GSM wireless standard, but traditionally mobile devices have been dominated by Nokia. With Nokia slow to react to the growing popularity of smartphones, Android and Apple have successfully captured significant smartphone market share. Mobile app development is now common among European carriers. A major issue for widespread adoption of mobile data technology is the relatively high roaming costs which are still charged by the European telecommunication companies. Rates are coming down and network speed is increasing, but cross boarder roaming still remains a problem for many European travellers.
Africa
Due to their price, smartphones have not penetrated Africa, but the impact of mobile on the region is dramatic. For many Africans, the first time they connect to the Internet is through their mobile device. Credit card penetration is low and thus the mobile phone has become a form of payment for many Africans who have micro-banking capabilities on their mobile device. African carriers have recognised this trend and have subsequently enabled their websites to accept mobile as a form of payment.
Japan
Japan has always been the model of mobile innovation. Integrated Circuit (IC) chips have been common in most mobile phones for nearly a decade. The IC chip enables advanced functions such as mobile check-in, mobile boarding and mobile payments by simply swiping the phone against a reader. The rest of the world is still trying to catch up to this efficient use of mobile technology. The ironic situation faced by Japanese Airlines is the fact that U.S. smartphones such as the Apple iPhone have penetrated a portion of the market, frequently as a fashion statement. This has caused Japanese airlines to retool many of their more advanced processes to accommodate global trends such as the 2D barcode boarding pass.
18 The always-connected traveller: How mobile will transform the future of air travel
Airport information
Airport information is a pretty common functionality available from most carriers, but detailed airport information is often contingent on the airports ability or willingness to make the data available. With the success of third party apps such as Gate Guru, providing basic airport information has now become a required airline app capability. (Figure 10) Like many things in the highly competitive airline business, unique functionality soon becomes standard and expected. This is similar to the process where one carrier adds a fully reclining business class seat and then all carriers who compete on that route need to provide a similar type of seat to remain competitive. Offering a passenger the ability to use their mobile phones for the standard functions listed above are no longer differentiating factors, but have become expected offerings from major carriers worldwide.
Booking, schedules, check-in, BCBP, itinerary management, seat selection, flight status
For the majority of interviews these basic functions were already available via a mobile web or smartphone application or will be deployed over the next 12 months.
Loyalty programs
The ability to access balances is a common feature across most geographies, but few airlines have enabled enrollment or loyalty bookings via mobile.
The always-connected traveller: How mobile will transform the future of air travel 19
AF Booking Schedules Check-in BCBP Itinerary management Disruption management Loyalty access Loyalty enroll Book loyalty Seats Flight status Airport info
APAC 1
APAC 2
EU
JP*
LA
ME
NA
SC
20 The always-connected traveller: How mobile will transform the future of air travel
AF Baggage Premium seating Premium boarding Pre-purchase meal Club access On board Wi-Fi Deals and offers Other Cars & hotels
APAC 1
APAC 2
EU
LA
JP
ME
NA
SC
Wheelchair
JP
Japan
The always-connected traveller: How mobile will transform the future of air travel 21
Promotions
How are promotions being used today?
Mobile promotions today are basically an extension of an airlines web promotions. When airlines launched websites in the mid1990s, offering promotions became part of the weekly email blasts. Today promotions have not changed as they still tend to be based on new routes, discounts for destinations with soft future bookings or joint promotions with hotel partners.
Targeted promotions
Mobile platforms have the potential to transform generic promotions into more specific tailor-made offers specifically tied to a users preferences and interests. The entire process of opt-in puts the passenger in control over what he is willing to see and the relevance of the offer will dictate whether the promotional messages will continue to be accepted. Mobile technology allows the promotions to be location sensitive and personalised.
Ancillary services represent a unique opportunity for airlines to allow passengers to customise their airport and in-flight experience.
22 The always-connected traveller: How mobile will transform the future of air travel
With the majority of phones now containing GPS, user location is often available. Equating location to airport based promotions is a logical extension of this theme.
Merchandising
The shopping experience is being transformed by mobile technology. In the retail market, applications such as Shopkick provide specific coupon offers to shoppers at Best Buy or Macys based on their location in the store. The airport is becoming a shopping mall and airlines are beginning to use similar techniques to promote airport shops and local merchants. Current efforts in this area are mostly tied to merchants that have a relationship with the carrier through the frequent flyer program. Extensive airline merchandising will not likely appear for another 12-24 months.
The always-connected traveller: How mobile will transform the future of air travel 23
Social media
No one can deny the importance of social media in todays travel industry. Airlines are extending their social media efforts to mobile platforms by using location to identify dissatisfied customers at the airport. For example: A major Latin American carrier has identified that a large volume of social media is coming from mobile devices so as part of their monitoring process, the carrier is targeting the passengers physical location and prioritising assistance to that individual based on the nature of their issue. Airlines in Asia, Scandinavia and the U.S. are using Facebook to send out information proactively to users facing specific operational issues. In the Middle East, a major full service carrier is recognising the importance of peer influence on ticket purchases and is working to deliver a system on the web and mobile platforms that integrates peer reviews into the ticket buying process.
Ground operations
The use of dedicated mobile devices for baggage tracking and to help manage airline ground operations is one area where mobile technology may improve ground handling. These systems need to be tightly integrated with an airlines departure control system (DCS) and an airport baggage reconciliation system to provide a complete solution. Although commercial mobile platforms such as tablets may be used for these operations, specific application development is required to integrate these devices with airline operational systems.
24 The always-connected traveller: How mobile will transform the future of air travel
Airlines need to pay attention to this growing tablet segment and ensure that their offering meets the needs of the tablet user, especially as frequent travellers are often early adopters of tablet computers.
The always-connected traveller: How mobile will transform the future of air travel 25
AF LBS Merchandising Advanced disruption Social media Movement tracking Push notifications Voice recognition Video Payments NFC Augmented reality
APAC 1
APAC 2
EU
LA
JP
ME
NA
SC
Today 6 months 12 months 12-24 months < 24 months or under consideration No plan
JP
Japan
26 The always-connected traveller: How mobile will transform the future of air travel
Movement tracking
Knowing where the passenger is at the airport can help airlines better manage loads and on time departures. In Japan where a majority of phones already have an IC chip, the customer is automatically checked-in as they pass through security. Automatically identifying a passengers location will be possible over the next 3-5 years as advanced near field communication (NFC) chips become a standard part of mobile phones and NFC readers are installed throughout airports worldwide. However, uptake will be dependent upon cultural and country specific legal restrictions.
The always-connected traveller: How mobile will transform the future of air travel 27
Emerging general mobile trends and applicability for airline mobile development
Smartphones represent a new converged computing platform and as a result new capabilities are now available through mobile technology. There is a fierce global battle between Apple, Google, RIM and Microsoft. Each company is trying to find ways to use mobile technology to edge out the competition with new features and capabilities. Unlike the PC world which has been fairly stagnant due to Microsoft desktop dominance or web search which continues to be controlled by Google, mobile competition is red hot and thus all developers of mobile technology will benefit. For example over the next few years, the smartphone will become a mobile wallet and an NFC chip will become a standard component of the platform. These trends will happen without any influence from airline specific initiatives, but airlines overall can benefit from these trends.
Mobile payments
The transformation of the mobile phone into a mobile wallet is progressing at a rapid pace with agreements between telecommunication companies, banks and credit card companies. In emerging markets such as Africa and India where mobile penetration is growing rapidly and leapfrogging landline technology, mobile wallets compete with cash rather than with credit cards. As a result mobile wallets have become commonplace in these markets. Security and safety are major issues in these countries, and in some ways, mobile wallets offer a safer alternative to cash, and are used to pay for goods and services essentially acting as a mobile bank, allowing a more secure storage of currency. This is the case with a major African Airline where mobile is the primary form of payment for electronic transactions. For mobile payments to become a reality overall security issues such as PCI-DCSS compliance will have to be resolved.
28 The always-connected traveller: How mobile will transform the future of air travel
NFC does require a significant infrastructure investment and a critical mass of NFC mobile phone penetration, and as a result, the move to NFC will be evolutionary. Pilot tests at airports around the world have begun, but full implementation of NFC at airports worldwide is likely to take between 4-7 years. However, this vision of NFC is already common practice in Japan where 90% of all mobile phones have IC chips installed and the Japanese airport infrastructure has been built to accommodate NFC.
5 Rubenstein, Roy. September 7, 2010. Near Field Communications Playing Tag, Total Telecom. http://www.totaltele.com/view.aspx?ID=458381
As mobile enabled NFC devices become more common and the reader infrastructure is installed at airports and merchants, the NFC process will change the travel experience at multiple customer touch points.
The always-connected traveller: How mobile will transform the future of air travel 29
Voice recognition
Little evidence was found that any airline is anticipating widespread use of voice recognition as part of their mobile offering. General mobile trends may alter this strategy as Apple and Google embrace voice enabled search. With Apples purchase of Siri in 20106 and recent news reports of a relationship with voice recognition leader Nuance7, the company is clearly looking at voice recognition as a major way to interact with mobile devices. Google is also investing heavily in voice interactive search. As these initiatives become mainstream, voice interaction for airline apps, may become a competitive necessity. A passenger may simply ask show me the location of the nearest club room and an interactive map will appear directing them to the nearest airport lounge.
Augmented reality
Some airlines view augmented reality as gimmicky and not applicable to airline applications whilst other airlines are investing in augmented reality as a way to help passengers navigate the airport. The acceptance of augmented reality by passengers will ultimately dictate which vision is correct. Passengers will embrace augmented reality if it helps their efficiency and provides added value. The overall acceptance of augmented reality by mobile users will also have an impact on the value of this technology for travel.
Boarding
Interactive ads Mobile coupons
Social networking
Mobile payments
Automated check-in
Airport entrance
Public transportation
6 Frommer, Dan Apple Buys Siri, A Mobile Assistant App, As War With Google Heats Up April 28, 2011 http://www.businessinsider.com/apple-buys-siri-a-mobile-assistant-app-as-war-with-google-heats-up-2010-4 7 Siegler, MG May 5, 2011 Tech Crunch http://techcrunch.com/2011/05/06/apple-nuance-ios-siri/
30 The always-connected traveller: How mobile will transform the future of air travel
What role do downloadable (native) apps play in the new mobile ecosystem compared to mobile web apps?
Some airlines do not have a targeted approach to deploying native apps versus the mobile web, whilst others view the native app as tool for the frequent traveller. Until HTML5 matures as a web authoring language, native apps will continue to function faster and provide more capabilities than the mobile web. It is more likely that the loyal frequent traveller will be the user of the native app and therefore the capabilities within that app need to reflect the needs of that customer segment. More importantly as airlines increase their merchandising efforts, native apps can provide a unique platform to create personalised offers to an airlines best customers. Figure 14 Native app development
APAC 1
APAC 2
EU
LA
JP
ME
NA
SC
Today 6 months 12 months < 24 months or under consideration > 24 months or no plan
JP
Japan
The always-connected traveller: How mobile will transform the future of air travel 31
Many airlines use small to midsized mobile generalists for their mobile web and app development. These companies are often based locally and therefore have specific market experience. Travel mobile specialists are less used by airlines whilst large system integrators often help airlines integrate their mobile applications with their existing internal infrastructure. Many airlines rely on PSS/DCS/GDS providers to develop mobile solutions that are tightly integrated with their internal systems. The most common response from the airlines interviewed was the use of three out of four of these types of third parties all performing different functions.
8 Snaptu Brings LinkedIn to Feature Phones LinkedIn Blog March 15, 2011 http://blog.linkedin.com/2011/03/15/linkedin-snaptu/ 9 The Facebook Blog A Better Mobile Experience for More People http://blog.facebook.com/blog.php?post=483824142130
AF Small - midsized mobile generalists Travel mobile specialists Large system integrators PSS/DCS/GDS providers In house
APAC 1
APAC 2
EU
LA
JP
ME
NA
SC
JP
Japan
32 The always-connected traveller: How mobile will transform the future of air travel
Full range of solutions covering all aspects of cycle To provide a comprehensive solution, all mobile applications should cover the full range of the travel life cycle. Allowing a passenger to only check-in via a mobile app or mobile web and not enabling a full reservation creates frustration. A more holistic approach to delivering full functionality to every device must be taken to allow passengers the ability to interact the way they wish with their chosen device. Integration with airline IT Mobile solutions must fully integrate with airline IT. As airlines begin to execute strategies that equate services to the value of a customer, a passengers past history, future travel plans and personal preferences must all be taken into account in order to deliver a truly unique experience. Consistency across channels Mobile native and web applications must provide a consistent user interface and set of functions similar to the online or kiosk experience. If the passenger user experience is different on a given device, their ability to easily perform the desired activity may be impaired. For example, the ability to check-in to a flight must have some consistent logic and process across mobile and native apps that mirrors the kiosk and online process. Common business logic Mobile applications must reflect a common set of business logic in order to accurately provide the right content to the right customer at the right time. Business logic drives customer value delivery and as airlines use the mobile platform to drive incremental revenue, common business logic must exist across all points of passenger interaction. Robust architecture Lastly, a mobile application must reside on a robust architecture. It is very likely that mobile commerce will exceed web bookings in the next five years. Therefore the underlying infrastructure must be in place to enable efficient and reliable transactions across multiple mobile platforms.
Infrastructure
Mobile airline applications cannot operate as standalone solutions. Even native apps connect to existing infrastructure to enable check-in and access reservation information. Therefore it is essential that mobile app development be integrated with airline systems. Most interviewees talked about mobile applications being part of their e-commerce platform, with much of the business logic residing in the web layer. It is important to note that even the most sophisticated airline websites still rely on core airline systems such as the Passenger Service System (PSS) or Departure Control System (DCS) for key reservation and check-in functions. Mobile airline implementations must embrace the entire airline eco-system and seamlessly exchange information between platforms ultimately delivering personalised services to the airline passenger on any device wherever they are connected.
The always-connected traveller: How mobile will transform the future of air travel 33
b. Reduction in kiosk hardware needed Ultimately the advent of increased use of mobile check-in results in less requirement for mobile kiosks. c.Moreefficientuseofstafftime All passenger needs are not the same. By initiating more mobile check-in and reducing kiosk deployment, airport staff should be able to focus on more complex check-in issues involving groups, disabled passengers or those customers who simply have an aversion to technology. More effective use of airport staff is a key benefit of greater use of mobile self-service. Mobile technology should also help reduce the need for informational questions about gates, departure times and airline policies.
Efficiencies
a.Reductioninstaffing There is no question that mobile applications lead to more selfservice activity. The challenge in using this as an ROI indicator is to accurately isolate the impact of mobile self-service from web or kiosk check-in as it relates to staffing levels. It is therefore important to use mobile reporting to measure check-in as a standalone benefit and compare it to pre-mobile check-in levels.
34 The always-connected traveller: How mobile will transform the future of air travel
10 eDigitalResearch Press Release May 10, 2011 http://www.edigitalresearch.com/news/item/nid/457336168 11 Limone, Jerry Priceline: Mobile app users are last-minute hotel bookers Travel Weekly September 7, 2010 http://www.travelweekly.com/Travel-News/Online-Travel/Priceline--Mobileapp-users-are-last-minute-hotel-bookers/
The always-connected traveller: How mobile will transform the future of air travel 35
If a third party vendor provides services to multiple airlines, how are airline apps differentiated?
Considering the fact that most airlines depend on third party providers to deliver mobile solutions, differentiation must come from core airline services and systems. Airlines are in a constant race to improve product delivery. The foundation of differentiation is not just unique services but the ability for the airline to match those services with customer needs based on their particular preferences, and situation. As loyalty programs move from passenger rewards to true customer insight, mobile platforms become the delivery mechanism for personalised offers and services matching specific customer requirements for a given trip. This level of mass customisation is a logical evolution of passenger marketing and mobile technology provides the ideal platform to deliver these services.
Personalised
Location based
Contextaware
36 The always-connected traveller: How mobile will transform the future of air travel
8 Summary
Challenges
All industries and companies face a common mobile challenge, how to deal with the increasing fragmentation of platforms and how to keep up with accelerating mobile innovation. Airlines are finding it challenging to not only keep up with these trends but finding ways to exploit mobile capabilities to drive new revenue and enhance customer loyalty.
The always-connected traveller: How mobile will transform the future of air travel 37
Widespread 1- 2 years
Widespread 3- 5 years
Flight status
Mobile functionality
Itinerary management
Interactive videos
Airport
Aiport information
Passenger tracking
Mobile payments
Ground operations
OFFERS
DEALS OFFERS
Extra baggage
OFFERS
Ancillary services
Source: Travel Tech Consulting, Inc.
38 The always-connected traveller: How mobile will transform the future of air travel
10 About Amadeus
Amadeus is a leading transaction processor and provider of advanced technology solutions for the global travel and tourism industry. Customer groups include travel providers (e.g. airlines, hotels, rail, ferries, etc.), travel sellers (travel agencies and websites), and travel buyers (corporations and individual travellers). The group operates a transaction-based business model and processed 850 million billable travel transactions in 2010. Amadeus has central sites in Madrid (corporate headquarters and marketing), Nice (development) and Erding (operations data processing centre) and regional offices in Miami, Buenos Aires, Bangkok and Dubai. At a market level, Amadeus maintains customer operations through 73 local Amadeus Commercial Organisations covering 195 countries. Amadeus is listed on the Madrid, Barcelona, Bilbao and Valencia stock exchanges and trades under the symbol AMS.MC. For the year ended December 31 2010, the company reported revenues of 2,683 million and EBITDA of 1,015 million. The Amadeus group employs over 10,270 people worldwide, with 123 nationalities represented at the central offices.
The always-connected traveller: How mobile will transform the future of air travel 39
www.amadeus.com/alwaysconnectedtraveller