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SimpliFlying Featured - Airlines look to mobile technology

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MEED, Oct 2012 - The boom in smartphone availability and use means more people are con- nected more of the time. Consumer- focused industries, from media to banking, must adapt to cope with the resulting closeness of their customers. A key sector under pressure to connect through mobile plat- forms is aviation.

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SimpliFlying Featured - Airlines look to mobile technology

  1. 1. Special Report Technology MOBILE COMMUNICATIONS Airlines look to mobile technology Gulf carriers are targeting smartphone users and their demand for device-friendly applications by using mobile platforms to boost customer engagement TOM LYDON T he boom in smartphone availability KEY FACT Currently, Jazeera Airways is the only and use means more people are con- regional airline to offer full-function mobile nected more of the time. Consumer- Nine out of 10 apps, putting it well ahead of the region’s big- focused industries, from media to airlines worldwide gest players. Etihad Airways offers an app, banking, must adapt to cope with the resulting are planning to launched in January 2010, for its frequent-flyer- closeness of their customers. A key sector sell tickets programme members, but this does not offer under pressure to connect through mobile plat- through mobile booking or travel management functionality. forms is aviation. phones by 2015 Although mobile revenue is currently low Mobile development is at the top of airlines’ for most carriers, the potential of mobile plat- priority lists. Some 70 per cent of carriers forms lies in allowing airlines to engage much Source: Sita believe smartphones will be a top-two sales more comprehensively with their customers, channel (along with websites) by 2015, accord- offering improved service and functionality. ing to a recent global survey on airline IT “Airlines’ customers This would create deeper customer loyalty and trends by Switzerland-based Sita, a major avia- tion technology and infrastructure provider. will want to see mobile potentially more repeat bookings. “A successful mobile project is one that gets “[Ticket] sales via smartphones represent applications that its travellers hooked, or [that] they become reli- the largest proportion of all emerging chan- nels, with 2 per cent of sales today rising to have a wide range of ant on throughout the ‘connected traveller life- cycle’, and one that customers or users are over 7 per cent by 2015 [more than all emerg- relevant functionalities” incentivised to share with their networks to ing channels combined],” says Sita market Gerry Samuels, Mobile Travel Technologies virally expand the project’s reach,” says analyst Thomas Knierim. Shashank Nigam, CEO of Singapore-based avi- “Sales are already quite high, considering ation consultancy SimpliFlying, which has that today only half of airlines offer tickets via has] projected [it will] reach $160m in revenue advised airlines and airports in the Middle mobile apps [applications]. Nine out of 10 air- through its mobile channel within 12 months.” East and globally on customer engagement. lines are planning to sell tickets through Middle East airlines have yet to embrace mobile phones by 2015, establishing mobile as mobile as fully as their Western counterparts, Improving connectivity a mainstream distribution channel for airline but success stories are emerging. After launch- The traveller lifecycle concept is not new, but tickets,” he adds. ing mobile apps for Apple’s iPhone and Goog- the emergence of the internet and, more recently, le’s Android platform, Kuwait-based Jazeera connected mobile devices, has disrupted it sub- Revenue growth Airways recorded 8.5 per cent of its total book- stantially. SimpliFlying’s connected traveller While mobile may not be a significant sales ings for June 2012 through its apps, compared lifecycle is the firm’s codification of how a con- channel in percentage terms, it accounted for with about 60 per cent through its main website. sumer interacts with an airline through mobile. about $2.6bn in annual worldwide ticket sales “We are now at a stage where anyone can Nigam says the customer goes through four in 2011, according to New York-based travel book with Jazeera Airways, whatever their stages. “He dreams of a trip while possibly on market research company PhoCusWright. For device is,” says Rafik Boghdady, vice-president Facebook on his mobile, plans the trip through an industry the Canada-headquartered Interna- of sales at the airline. “We are on iOS [Apple’s TripAdvisor and Kayak mobile apps, books the tional Air Transport Association (IATA) pre- operating system] and Android through our trip from an airline’s mobile app and finally dicts will make an overall profit of $4.1bn in own native apps, and on every other internet- shares multiple aspects of his travels using his 2012, this is critical revenue. connected mobile platform with our mobile- mobile devices.” Gerry Samuels, chief executive officer (CEO) optimised website. Now, travellers can remain connected of Mobile Travel Technologies (MTT), a devel- “The apps enable customers to browse throughout their journeys, sharing their experi- oper of mobile platforms based in Ireland, con- through flight schedules, book, choose their ences through social networks. Smart airlines firms the channel’s potential for revenue seats, pay and manage their bookings,” he will aim to help with this element of the journey growth. “One of MTT’s recently launched air- adds. “[They] also give customers access to our as well, beyond the normal airline functions of line mobile applications reported $1.6m in office locations and numbers, to a list of serv- booking and managing a flight. Jazeera Airways flight bookings and 400,000 downloads of the ices available for Business Class travellers and is again a regional first-mover, offering booking app just one month after launch. [The airline to more information about Jazeera Airways.” through social media site Facebook – a booking 46 | MEED | 12-18 October 2012 www.meed.com46-47 TQ Mobile.indd 46 11/10/2012 16:49
  2. 2. channel pioneered by US-based Delta in 2010, sions need to be created for various platforms JAZEERA AIRWAYS BOOKING CHANNELS and followed by others airlines, including the and it can be expensive,” says Nigam. “Hence, Netherland’s KLM and Malaysia Airlines. Mobile applications a website optimised for the mobile experience “We are one of the few airlines in the world may be the way to go for companies looking to that enables customers to book and pay for 8.5 get into this space.” their seats through a native Facebook applica- tion,” says Jazeera’s Boghdady. Back-end integration % He adds that the airline is also working on A significant issue for the majority of airlines, 31.5 customer engagement through social media. whether developing a mobile app or mobile “We are very much invested in both mobile website, is integrating a new mobile platform 60 and social,” he says. “Whether they have an into their back-end IT systems. For carriers idea or need help with their booking, custom- with older systems, this presents a major tech- Other (including ers can now directly interact with Jazeera Air- travel agents nological hurdle. ways on [micro-blogging service] Twitter, Face- and call centres) “Over the past 15 years the vast majority of Website book and [photo-sharing app] Instagram.” airlines have been adding new channels with- Source: Jazeera Airways SimpliFlying’s Nigam says this is likely to out replacing their back-end legacy systems – give a return on investment. “Airlines that can and they wouldn’t be doing so if it wasn’t cost- marry the concept of social networking with CUSTOMER SERVICE BEYOND 2015 effective,” says Sita’s Knierim. “But the their products and services well can definitely Booking channels ranked by forecast dominance by continuing problem is that these integrations look forwards to significant revenues from global airline executives could work much better if they were on new- engagement through social media, which is 80 80 generation systems designed from the ground now even more accessible thanks to mobile.” 70 70 up to support these kinds of channels. For 60 60 example, business logic to manage merchan- Social functionality dising and respond in real time to customer 50 50 Dubai-based airline Emirates has also seen relationships would ideally be in the core sys- recent success on Facebook, gaining more than 40 40 tems and hence available to all channels seam- 700,000 Facebook fans less than six months 30 30 lessly, rather than being implemented sepa- after launching its page. “Emirates ensures that 20 rately on a channel-specific basis.” 20 its online initiatives are accessible and mobile- Legacy core systems are not easily replaced, 10 10 friendly by choosing already mobile-friendly because they are hugely complex and highly platforms, such as Facebook,” says Nigam. 0 f mission critical, he says. This is why they have sit e on e sk taf ia Kio ed Research by Sita reports that nine out of 10 We b rt ph en t/S ialm such a long life-cycle. The cost of developing ma Ag oc airlines are planning to invest in social media S S and launching a complete new-generation alter- Source: Sita – Airline IT Trends Survey 2012 over the next three years, with 39 per cent see- native to the legacy passenger services system ing it as a customer service tool beyond its (PSS) core suitable for a full-service carrier more traditional role as a marketing channel. an e-commerce site, with a range “from a few would be measured in hundreds of millions of The research suggests Middle East airlines also thousand dollars to hundreds of thousands of dollars. Suppliers, including Sita, are looking at follow these global trends. dollars”. This range covers mobile websites up ways to upgrade outdated back-end systems. MTT’s Samuels says social functionality is to and including dedicated mobile apps. The A recent report by Madrid-based aviation IT becoming a requirement of mobile apps rather more complex an app is, and the more integra- vendor Amadeus on the “always-connected than an add-on. “Airlines’ customers will want tion required, the higher the cost. traveller” found the same. to see mobile applications that have a wide Of the big three regional airlines – Emirates, “Even the most sophisticated airline web- range of relevant functionalities, that provide Etihad and Qatar Airways – Etihad is currently sites still rely on core airline systems, such as personalised, contextualised services, that the only carrier with an app in the marketplace. the PSS or Departure Control System, for key offer a full end-to-end service for their journey, Other airlines remain tight-lipped about their reservation and check-in functions. Mobile air- that demonstrate regular improvements to the mobile application plans, but sources close to line implementations must embrace the entire mobile service, and that enable integration Emirates confirm it is working on a range of airline eco-system and seamlessly exchange with other channels such as web and social applications, with one for the iPad likely to be information between platforms, ultimately media,” he says. the first to launch later this financial year. delivering personalised services to the airline For mobile, the most effective way to do this “Most Middle East airlines are evaluating passenger on any device wherever they are is through a native app – software written spe- plans to launch mobile apps in the next 12 connected,” the report said. cifically for a platform. Each native app can be months,” says SimpliFlying’s Nigam. This transition from having a few thousand a development project in itself, and with four Ahead of app development, more regional air- specialist users access these systems to expos- major mobile platforms – Apple iOS, Google lines have chosen to roll out mobile-optimised ing their functionality to hundreds of thou- Android, Windows Phone and BlackBerry OS websites, which can offer core functionality to sands of travellers internationally every day, – dominating the market, app development mobile users across multiple platforms, without means airlines may be forced to upgrade their demands high investment by airlines. having to take on complex app development. core systems to offer the flexible mobile serv- Samuels says the cost of developing the “While the mobile app gives branded pres- ices consumers around the world, and in the mobile channel is comparable to developing ence in the customer’s device, multiple ver- Middle East, are now demanding. www.meed.com 12-18 October 2012 | MEED | 4746-47 TQ Mobile.indd 47 11/10/2012 16:49