How airlines are gearing up for the digital shift

With air traffic expected to increase at a compound annual growth rate of 3.7% over the next two decades, full-service airlines have been under pressure to boost service standards and drive down costs in a bid to better compete with low-cost carriers.

Across the Asia-Pacific (APAC) region, the primary driver of global passenger demand, national carriers from Australia’s Qantas Airways to Singapore Airlines have been pulling all stops to improve their customer experience in efforts to build customer loyalty.

Qantas, for example, has worked with IT services giant Tata Consultancy Services (TCS) to build a “customer value engine” that enables it to be proactive in solving customer-related issues, such as offering to put a passenger who is stuck in traffic on a later flight, according to Girish Ramachandran, president and head of TCS in Asia-Pacific.

By getting contextual knowledge about a passenger, Ramachandran said airlines can improve the customer experience for all their customers, not just for those travelling in premium cabins. “Qantas has done a phenomenal job of turning around the airline, and they’re very keen to looking at serving the needs of all their frequent flyers,” he said.

With Singapore Airlines, which is facing stiff competition from Qantas on the so-called kangaroo routes between the UK and Australia, TCS has built an application – with intellectual property shared with the carrier – that digitises the work processes of cabin crew and delivers contextual information on passengers.

“For example, if I’m a frequent flyer to Sydney, the cabin crew will know my tastes and preferences, so they can tailor their conversations with me,” he said, adding that TCS is now selling the application to other airlines.

Airlines have also been extending their service touchpoints, such as partnering retailers to offer discounts to passengers in destination cities. Those same travellers could even obtain loyalty points from credit card loyalty schemes or friends in the same frequent flyer programme – if TCS gets its way.

Ramachandran revealed that TCS is testing a blockchain-based loyalty management application in Singapore that will let airlines do just that. “So if I am at a Singapore Airlines counter and I only have 9,000 points, is there a way I can reach out to my friend for an additional 1,000 points to upgrade my seat?”

Singapore Airlines has been experimenting with blockchain through a blockchain-based airline loyalty digital wallet app that will unlock the value of miles accumulated by customers in its KrisFlyer frequent flyer programme.

When ready, the digital wallet, which has been tested in a proof-of-concept exercise with KPMG and Microsoft, would enable KrisFlyer members to spend their miles at participating merchants. The app will ride on a Singapore Airlines-owned private blockchain involving only merchants and partners.

Hailing the digital wallet as ground-breaking, Singapore Airlines’ CEO Goh Choon Phong said the initiative is a “demonstration of the investment we are making to significantly enhance the digital side of our business for the benefit of our customers”.