top of page
  • Andrea Rader

Airline Alliances: Catching Up Bringing Airline Alliances Back to the Future

2022 was a pretty messy year for the U.S. airlines, even before the end-of-year Southwest Airlines meltdown. Pilot and other staffing shortages, coupled with a roaring demand for travel post-COVID, tested even the most reliable of the U.S. airlines’ customer service operations. The majors have responded with capacity reductions and schedule changes – well into 2023 – just to bring some semblance of certainty back to their systems, just in the United States.


Most carriers are optimistically predicting better times ahead for their domestic products in 2023. As they tweak their operations to achieve that goal, they also should take a closer look at the experience offered to international customers through the airlines’ global alliances.


Airline Alliances Drive a Significant Share of Travel


Almost 50 percent of airline travel today is booked on alliances such as American’s OneWorld, Delta’s SkyTeam and United’s Star Alliance. These global alliances, launched in the 1990s, promised ease of travel on international itineraries, along with perks such as interchangeable loyalty programs and access to lounges worldwide.


The day-to-day realities show there is some room for improvement, and we see plenty of potential in technologies such as artificial intelligence (AI), machine learning (ML), data sharing, and plain vanilla communications systems that can help improve the alliance travel customer experience and smooth out customer service issues. With staffing constraints and higher than normal passenger loads, even the simplest of customer service transactions can become mired in boggling complexity on alliance bookings, adding to customer frustration and every airline’s costs.


Our own employees experienced this conundrum, on recent codeshare flights, while attempting what are ordinarily very simple customer service transactions.


Employee A, arriving early at the departing flight’s airport, tried to book an earlier departure: "I stood at the customer service desk for close to 30 minutes while the agent made some phone calls, clicked away on their screen for a while, and then asked me if I had booked this at a travel agency. When I clarified that it was a codeshare flight marketed by an alliance carrier, I was redirected to the carrier that booked the ticket. That carrier had no personnel in my terminal, meaning I would have had to leave security and take a bus to another terminal, just to talk to someone who could help."


Employee B was the victim of a delayed inbound flight, which resulted in a missed connection. "The airport agent told me I would need to contact the first carrier (an alliance partner) to get rebooked on another flight, because THAT carrier caused me to miss my U.S. bound flight. After arguing that I booked and paid her airline for the full itinerary, she made an exception and rebooked me on a later flight. However, she told me that I would need to contact the carrier that caused the delay if this happens in the future."


The transactions above are among the most routine that airline personnel deal with daily. Why are agents spending an hour or more of their time to sort them up, adding to their frustration and upsetting customers in the process)? A significant amount has to do with the systems they’re forced to work with.


https://www.statista.com/statistics/539239/number-of-customer-complaints-in-the-us-airline-industry-by-type/

  1. Legacy systems weren’t designed for atypical scenarios: A core issue is that airlines are being asked to do more with systems that weren’t designed with today’s travel demands in mind. “When these alliances started a few decades back, we did not have security like we do today, or web-based bookings, self-service, merchandising, a wide range of ancillary products or any of the valuable and consumer-friendly options we have today,” said Brad Beakley, CEO of Dallas-based Hospitio Consulting & Services. “This means we've layered on a significant level of complexity which makes it difficult, and sometimes impossible, to recover easily from disruption.”

  2. With limited access to information, and their own infrastructure to deal with, airlines will likely prioritize their customers, leaving alliance customers further down their priority lists.

  3. A 2019 study noted the impact of airline infrastructure on customer service. One airline’s infrastructure may be fine for serving its customer base, but not the increased burden of global service. The result: airline employees will focus on serving their customers, sending alliance customers down their priority lists.

  4. Better tools can help airlines serve ALL customers

Staff at one airline often do not have access to information available to the home airline, and simply can’t help a customer standing in front of them, especially during a disruption. Referrals to call centers add to the frustration: These days, it’s almost impossible to get a hold of a call center representative. And that representative may be a newbie, given the staffing challenges that U.S. airlines are facing today. The systems simply must be updated to help employees solve problems.


Today’s Technology Can Optimize Operations and Target Customers


Airlines today need to capitalize on the tools available to them right now, such as Big Data, artificial intelligence, cloud capabilities and process improvement. By leveraging digitalization in a broad sense, processes can be accelerated, reducing manual operations and consequences of those. Furthermore, usage of Big Data, AI and cloud will help cater to individual customers in a more personalized way.


According to Max Zhdanov, VP of Travel, Transportation and Hospitality practice at DataArt, these technologies today can cover the majority of cases. For example, the airline can use Big Data and Artificial Intelligence to predict which passengers will be most likely to miss their flights and then proactively offer them the option of changing their reservation. Whereas cloud capabilities make organizations more flexible and lets them scale up or down dynamically.


Brad Beakley adds whether it's NDC, standardized messaging, or microservices modern technologies are proven to offer speed and can be deployed quickly too. "That's not the case with most current PSS systems. If you want to change one bit of functionality, for example, the seat map, you often have to regression test a large portion of the total code base. Contemporary solutions provide plug and play capabilities that leverage structured data and standardized processes to make new features easier to deploy."


This is a huge win for both parties because it reduces costs for airlines while decreasing customer frustration and improving customer retention rates.


Another relevant example is how technology leverages personalized offers in e-commerce. According to Apurva Mathur, VP of Strategic Accounts at DataArt's Travel, Transportation and Hospitality practice, the travel journey can be divided into 6 phases: before booking, booking, after purchase, airport check-in, in-flight, and post-journey. The flight optimization capabilities of AI and ML can help airlines perform quickly, with real-time information, to make targeted offers in real time on every phase, based on a customer’s travel history, purchasing patterns, whether it's a business trip or a leisure trip, etc. “


Today's AI systems can change the entire experience, as their responses are not only immediate but increasingly in-depth and accurate over time. Rather than following rules and templates like chatbots, AI systems can assimilate data and formulate individualized responses that are more likely to resolve an issue quickly. This also goes for issues that human representatives are handling. Even if a passenger chooses to call in, AI can work simultaneously as the agent talks on the phone, bringing up helpful information such as customer history. It is valid even for more complicated cases, such as applying miles to book cars, hotels or other ancillaries.


How Tech Vendors and Consultancies Can Help Airlines and Alliances


The larger and more globally focused an alliance is, the more complex the web of legal and regulatory issues will be for its service supplier. Resources and capabilities must be scaled to match the airline's needs.


1. Set the Proper Focus Based on Industry and Technology Experience


Beakley suggests that third-party technology providers can help airlines focus on core activities by allowing third-party technology to cover areas such as passenger reservations systems, revenue accounting and revenue optimization systems, operational systems (flight operations, crew scheduling, gate operations, ground handling and catering), fleet maintenance, office systems and functions.


Premium services also can be redefined using cutting-edge technology. "At the Contact Centre, using natural language processing (NLP), an organization can easily mine phone call details to identify pervasive issues,” Beakley says. “The call flow with a Platinum Member requesting a mileage upgrade often requires a call to an agent, who then puts you on hold to make an internal call to the rate desk to price the transaction. Deploying machine learning to automate this type of repetitive transaction, or hundreds of other frequent transactions, would significantly reduce costs and provide a much-needed boost to the customer experience.


Mike King, Director of Strategic Relationships at DataArt's Travel, Transportation and Hospitality practice, notes that some of the industry players are already early adopters of the AI/ML capabilities: "Some contact center tools such as Uniphore, offer AI/ML capabilities, as well as hand-guided entries to help agents solve complex GDS transactions such as interline or codeshare ticket exchanges. This is already a good start for the industry, but it doesn't address the core problem of not having everything fully automated” AI/ML can also be employed to anticipate missed connections and proactively text or email clients with alternative flight options with booking links, or nearby hotels if required for next day flights.


2. Visualize the Outcome


IT consultancies can support airlines by helping quantify the return on investment in comparison to a legacy approach. “If an inquiry takes 30 or 45 minutes of an airport agent’s time, versus seconds with AI / ML systems, the ROI is pretty clear,” Beakley said. “Quantifying the value in deploying these technologies can help commercial and operational leadership work efficiently with their finance teams to approve high impact projects.


IT vendors and consultancies can offer an outside-in perspective and bring broad global experience to help an airline deploy these technologies optimally for their specific, unique business model and target markets.


Bottom line:


Upgrading customer experience, reducing cost and improving profitability in today’s complex distribution and operational environments requires ongoing investment in the latest technologies. From alliance partner coordination to loyalty transaction simplification, to any number of the thousands of daily customer transactions conducted by a typical airline, deploying the contemporary, well designed, dependable technology and processes are critical to profitability. Contact Hospitio and DataArt to learn how our expertise and structured approach can accelerate your airline’s path to a better customer journey and an enhanced bottom line.


To learn more, contact Beakley at brad.beakley@hospitio.com or Mike King at DataArt.com.

ABOUT HOSPITIO

Hospitio is a global consulting firm with offices in the U.S., Europe, Latin America, and Asia offering consulting services in aviation, transportation, hospitality, cargo and logistics, travel technology, and tour and cruise industries. The Dallas-based firm specializes in strategic commercial consulting, operations consulting, as well as with organizational staffing and development. You can learn more about Hospitio at www.hospitio.com.


ABOUT DATAART

With over 25 years of experience, teams of highly-trained engineers around the world, deep industry sector knowledge, and ongoing technology research, we help clients create custom software that improves their operations and opens new markets. Learn more about DataArt at www.dataart.com.

71 views0 comments
bottom of page