There is an evident increase in the level of sophistication and acceleration in the pace of implementation of digital transformation programs in the airline industry. A growing number of airlines are investing in modern IT systems and partnering with global technology integrators and niche solution suppliers.
It is estimated that the incremental value of a digital transformation program could reach up to $5-$10 per passenger annually, mainly generated from improved productivity, cost savings, and new ancillary revenue streams. This wide-reaching digital transformation is mainly driven by airline corporate strategy departments, with business requirements and IT projects now aligned to incorporate strategic objectives.
Digital transformation is taking place across every airline function and can be separated into 5 key workstreams: Business Intelligence, Digital Marketing, Core Airline Services, Corporate Services, and Infrastructure.
- Business Intelligence: Leveraging internal/external data and analytic capabilities to fuel long-term airline growth
- Digital Marketing: Enhancing customer interactions and improving the overall customer experience through the use of intuitive digital tools
- Core Airline Services: Modernizing the IT systems responsible for core airline functions, ranging from revenue management to network planning and flight operations
- Corporate Services: Streamlining back-office operations, including finance, supply chain management, resource, and asset management
- Infrastructure: Enabling digital transformation with the right mix of hardware and cloud-based operations
Research Scope
This study looks at the current status of airline digital transformation programs and highlights the key airline objectives across core and non-core functions. It provides an overview of the required IT architecture and assesses the competitiveness of key IT suppliers in meeting airline objectives. Companies mentioned in this study include IBM, Adobe, Sabre, and Oracle.
Key Questions This Study Will Answer
- What are the components of an airline digital transformation program?
- What are the key trends and structure of business intelligence, marketing, and core digital workstreams?
- Who are the main competitors and what is their positioning to meet airline requirements?
- Which key growth opportunities do IT suppliers take advantage of to succeed in this market?
Key Findings
2. The Digital Transformation Program
- Digital Transformation Driven by Digitization, Connectivity, and Big Data Applications
- Airline Digital Transformation Requirements Driven by Corporate Strategic Objectives and Supported by the IT Function
- Airline Digital Transformation Program Divided into Five Key Workstreams
- Airlines Linking Digital Transformation Workstreams and Related IT Projects to Strategic Objectives and KPIs
- Business Intelligence Leveraging Data to Fuel Business Growth
- Airline Data Sourced from Different Business Functions Categorized by Type and their Business Value Measured
- Airline Business Intelligence Blueprint Designed to Enable Real-time Reports for Different Users
- Specific Requirements of Airlines from their BI Technology Partners
- Market Trends that Necessitate a Digital Marketing Strategy
- Digital Passenger Journey Mirrors the Physical Journey
- Digital Marketing Most Visible of DT Workstreams
- Airlines Assessing TCO and Prefer Platforms Over Solutions
- Development of Essential Digital Marketing Capabilities Required by Airlines to Grow and Succeed
- Focus Areas and Projects Making up the Digital Marketing Workstream
- Digital Marketing Competitive Landscape Fragmented, with Vendors Competing Across Industry Verticals
- Key Digital Marketing Projects-Passenger Segmentation
- Key Digital Marketing Projects-Distribution
- Airline Distribution Market Ready for Disruption
- Key Digital Marketing Projects-Call Centre Automation
- Case Study-Call Centre Virtualization
- Key Digital Marketing Projects-Loyalty Programs
- Core Systems Assume the Largest Share of Airline IT Budgets
- Architecture of Core Airline Systems and Need for Efficient Integration Driving IT Vendor Collaboration
- Competitive Landscape in Core Airline Systems Crowded, but Dominated by Few Global Contenders
- Passenger Service System (PSS)-Backbone of Core Airline Systems
- PSS Implementation Impacting 5 Key Airline Domains
- PSS Implementation the Most Costly and Long-term IT Project
- Core Airline Services Projects-Flight Operations
- Core Airline Services Projects-Pricing Management
- Core Airline Services Projects-Cargo Management
- Core Airline Services Projects-Baggage Management
- Core Airline Services Projects-MRO 4.0
- Core Airline Services Projects-MRO Flight Data Management
- Core Airline Services Projects-MRO Management
- Transformation in the Aviation Industry Ecosystem-2016
- Emergence and Growth of Innovation Labs
- Growth Opportunity 1-Disruption Management
- Growth Opportunity 2-Blockchain Technology
- Growth Opportunity 3-Multi-Model Search
- Airlines-Changing their Technology Vision Setting and Procurement Processes
- The Last Word-3 Big Predictions
- Legal Disclaimer
- Major Airline Digital Transformation Projects
- Major Industry Partnerships
- Emergence and Growth of Innovation Labs
- Emergence and Growth of Technology Accelerators
A selection of companies mentioned in this report includes:
- Adobe
- IBM
- Oracle
- Sabre
