Basic mobile handsets are becoming obsolete, replaced by smartphones and devices that are capable of much more than simply making a call. Mobile is a term often used generically, albeit with different definitions, to cover any device or channel that is not fixed to a point in space by its power lead, network cable or the fact that it comes with a cumbersome internal hard drive or bulky widescreen display
Airlines and their technology partners are starting to have a stronger sense of what mobile can offer, not only to the passenger, but also to the bottom line. Many airlines are now selling seats and ancillaries on mobile, while even the traditional itinerary management role of the mobile is becoming more sophisticated and profitable. New devices, widely adopted, are opening up new opportunities and challenges.
Every day, new statistics are released that prove, as if we needed telling, that mobile is growing. However, even the statistics industry is starting to talk about tablets and smartphones as separate tools. IAB/ComScore stats from February this year show that tablets now account for 8% of internet traffic, with combined tablet and mobile traffic now at just under one-third of the total. The net result is that the web will soon have a legacy system, called a fixed desktop.
Airlines are addressing this change from desktops to devices via mobile, as the findings from the latest SITA/Airline Business Airline IT Trends Survey, reported in the July edition of Airline Business, show.
Technology giant Amadeus is relatively active in terms of its mobile business. Currently, a dozen airlines use Amadeus for mobile bookings, bringing in more than 10,300 transactions a day on average. By the end of this year, another nine carriers will have this ability.
Amadeus is also handling more than 5,000+ mobile check-ins a day, from the 16 airlines it works with. Another 10 carriers are expected to be added to the list by the end of the year.
The statistics were revealed at Amadeus's recent Airline e-Commerce Conference in Madrid. The event signalled the demise, in the Amadeus lexicon at least, of silos such as mobile, e-commerce and web. Amadeus now uses the term "digital" to cover all devices and channels, employed in the past, present and future.
RETHINKING THE BRAND
Philippe der Arslanian, Amadeus's director responsible for mobile and airline IT, explains the concept of "digital" by saying that it is "more than just the web" . He says that "e-commerce was the catalyst, but now we're looking at digital as the way in which business is done. The flow from e-commerce practices into digital is interesting".
Airlines, he notes, are also thinking differently about their overall "digital" presence, rather than discrete web/mobile/tablet platforms. "An airline's digital brand is not defined by the airline product as such," der Aslanian says. "It's about how the brand performs across the devices and platforms, the consistency, the user experience. And it's mobile which will dictate how the digital brand is perceived."
Vinit Doshi, vice-president for SabreSonic customer sales and service solutions, is aware of the role of mobile in developing a digital brand, although he does not actually use that specific term. He opts for differentiation.
"Conversations with our airline customers are changing," he says, "with many airlines fully understanding how the effective use of mobile can help with brand loyalty. Itinerary management functions on a mobile device should be a given for airlines, but mobile can offer a level of sophistication."
"We should not be thinking about simple gate-change notifications; airlines can use rules-driven personalisation to really differentiate." He also insists that handling disruption management in real time, through a passenger's mobile device, is a winner in terms of customer loyalty.
SabreSonic's other areas of interest include operational benefits to the airline through improved efficiency and cost control. "We are also looking at how mobile-enabling operational staff - from ground handlers to cabin crew - can reduce costs and increase efficiency by monitoring performance and KPIs quicker and easier."
The last area of interest is more philosophical. "We have a huge focus on redefining our business to incorporate the design needs of mobile and tablets," says Doshi. "We are currently rewriting our self-service check-in systems for tablets, which will then work on smartphones and on the web. Mobile first is a significant part of our thinking and we are already prioritising it for some functions."
Another philosophical point is made by Amadeus's Der Arslanian, who notes the difference between international and global perspectives. Consumer adoption, infrastructure, payments and socio-economics were among the variables creating significantly different business climates internationally, he argues, rendering global observations and strategy meaningless.
A widely accepted international generalisation is that Scandinavians are early adopters of technology, particularly in travel. Eight years ago mainstream tour operators in the region were seeing adoption, conversion and profits from traditional web bookings at levels the UK is only just approaching. The emergence of mobile has enhanced the region's early adopter status.
Christina Ericsson, vice-president of global digital sales at SAS, explains how the specifics of the company's home market is driving its digital strategy. "One in five of our customers fly more than five times a year," she says. "We refer to them as the 'travel class', and we think that if we can meet their needs, the rest will follow."
She believes that digital is now "an eco-system where consumers are constantly moving between devices". This eco-system is evolving as new devices are released, but also includes someone using their work laptop to check emails at the airport. "Is that mobile?" she asks. "I'd say it is."
Her "travel class" customers want speed and security when booking from their smartphone. Ericsson explains that the core desktop functions are transitioned onto the apps, which then require a highly secure, one-off sign-in process. "If you've already keyed in your details and signed in, you can book a seat in four taps of the screen," she says. The minute or so spent upfront repays itself almost instantly for the frequent fliers. The apps also feature a function where seats can be paid for with miles.
While this approach has been devised for smartphones, SAS is taking a different approach for the iPad, launching an app this summer called "Explore", which the company says will be an inspirational companion for leisure travellers.
Nearly one in four searches on SAS.com comes from smartphones or tablets. During 2012, travel-related searches on Google in Sweden increased by over 350% on tablets and more than doubled on mobiles, while desktop searches decreased by 2%. Google in the UK reports a similar trend from its analysis of UK travel searches: tablet searches are up more than mobile, with those from desktop flat to negative.
Scandinavia and the UK are mature mobile environments. China's market is still growing, but at a much quicker pace. Its booming aviation industry similarly reflects the strong economic conditions. China Eastern is the fifth largest airline in the world, profitably operating 2,000 flights a day.
Kevin Cai is its chief information officer and his interest in mobile is a numbers game - he refers to Nielsen stats that predict there will be 750 million mobile internet users in China by the end of the year. That's a whopping 143 million more than the figure at the end of 2012.
He suggests that China's mobile market is not only growing but maturing, spreading from the Chinese middle class to the mass market. "Not everyone needs a tablet but everyone will need a phone," he says. "But tablet use will become widespread because they are manufactured locally, they are designed specifically for domestic use and costs are deliberately kept low."
The availability of cheap, locally produced and adapted tablets could explain why Cai's is concerned that airlines are losing out to other travel suppliers in the battle of the apps. Of China's top 20 most downloaded apps, not one is from an airline. There are OTAs, hotel booking sites, familiar names such as TripAdvisor and Skyscanner, and even something clever from Travelsky that connects the GDS/PSS functions. But no airlines.
The executive, who sits on the boards of IBM, SITA and Travelsky, is brave enough to admit that he does not know the answer as to why airlines are lagging behind. He suggests that apps could offer more functionality because they could focus more. He also notes that apps benefit from bigger marketing budgets.
However, one suspects it will not be long before Cai works it out. At the time of writing, the airline's website home page says that Android and iPhone apps are coming soon.
Different markets are moving at a different pace, in terms of both aviation growth and mobile take-up. The multi-speed economy is allowing new entrants to come in, benefiting from the experience of others.
Airlines in Africa are rapidly embracing mobile payments as option for air tickets , mirroring the rise in popularity of mobile money on a ciontinent where many citizens have neither bank accounts or credit cards.
Carriers such as Air Uganda and Fastjet are among those offering the service, partnering with mobile phone companies to allow customers to pay cashlessly through their phones for tickets usually sold at a slight discount.
Vayama's executive vice president Ted Jansen, outlines his company's aggressive growth over the last two years, highlighted by launches in Brazil, Russia, India and China.
Vayama's parent company is Dutch-based travel giant BCD Holdings, and it sits as part of the Travix International OTA unit, whose six brands sell around 2.5 million air tickets a year.
Jansen says "sometimes it might pay to be counter-intuitive" and introduced its "less is more" approach, currently in beta. It offers curated results for air searches, listing only the cheapest, the most appropriate departure date, the most popular and a sponsored slot. He also says that on smartphones, four results is appropriate for the size of the screen.
"We think that fewer but more powerful and relevant results are better," he says, "but it is still necessary to excel in the current model," referring to traditional desktop-based search.
Jansen admits that being late to the mobile game "gives us an understanding, if only as consumers ourselves of travel and non-travel apps". Vayama started out as a traditional online travel agency in 2007, the same year that Dublin-based Mobile Travel Technologies took its first ever mobile booking. The carrier was Silverjet, one of the short-lived business-class-only carriers from before the 2008 crash.
"There was one day we all got quite excited when we got seven mobile bookings in one day," says Gerry Samuels, MTT's co-founder and chief executive. Now, he thinks that "it's a really important time for airlines. The numbers coming through have taken mobile from being an adjunct to the heart. It's difficult to quantify but my instinct is that we have moved away from mobile having a tick-box role within an airline. There is a need to re-engineer business processes to put mobile at the heart.
"Some airlines get it; some don't," Samuels says. "There are those with a very clear strategic view that they need the best-in-class app and a personalised multi-function proposition. It becomes a virtuous circle of more use, leading to wider adoption, leading to more use.
JOINING THE GAME
"Mobile is used differently from the regular web, which means there are more touchpoint opportunities for airlines. The appropriate use of mobile can help develop deeper relationships between an airline and traveller," he noted, describing once again the "digital brand" concept referred to by Amadeus and Sabre.
One airline that clearly gets it is SAS. Ericsson also says that the interest in digital went high up the corporate tree. "We're lucky in that we've got a CEO who is very digital-minded," she says. Ericsson was very much looking forward to presenting her digital strategy at the next board meeting. "Digital will be there with the network, fleet, and cargo. It's taken very seriously at the highest level in the company."
SAS has identified and delivered specific tools for specific devices, a sign of where it is on the digital learning curve. Amadeus shares a statistic from Egyptair, which is very much in the early stages of its move into mobile. Egyptair went from having no mobile bookings to 7% within seven months of mobile-enabling its website. Apparently, it did not do anything to promote or market this feature - things just happened.
Mobile, however it is defined, is mature in some markets, developing in others and only starting out elsewhere. It is a dynamic and evolving ecosystem that is increasingly seen in terms of the industry as a source of profit as well as a customer service tool. The joy is that there is still time for airlines to enter and adapt from the current environment, and prosper.