Covid-19 has brought the aviation industry in Asia-Pacific to a near standstill, with IATA’s latest figures predicting that demand for air travel is unlikely to reach 2019 levels again until at least 2024.
The pandemic has also fundamentally changed what passengers in the region need and want from the flying experience, and with the ongoing threat of ‘second waves’, the mid-term future remains uncertain.
Nevertheless, there are still opportunities for carriers that can adapt their operations. But to navigate the ongoing uncertainty, flexibility will need to become the new industry watchword.
Against this backdrop, Tetaz outlines four areas where flexibility will be critical to Asia-Pacific’s airlines surviving and thriving in the era of Covid:
1. Disruption management
With policies changing constantly, flexible and effective disruption management should be a top priority as it allows airlines to maintain a high quality of customer service and build customer confidence.
The dynamic situation means that airlines need to ensure that their disruption management systems are informed by the very latest data, are agile enough to respond seamlessly in real time, and enable them to immediately communicate with passengers and offer alternative flight and short-term accommodation options if necessary, through mobile apps and wearables, for example.
Technology will be critical to airlines achieving this at scale, with the latest breed of sophisticated inventory management systems – like Amadeus’ Altéa Passenger Service System – underpinned by big data analytics, machine learning algorithms and cloud computing to allow real-time customisation for individual passengers in response to disruptions.
2. Cabin configurations
Many airlines have refocused some of their fleets to support repatriation flights, transport of cargo and medical supply shipments. In fact, Korean Air and Asiana even reported profits in Q2 by focusing on their cargo businesses.
To do this, they have repurposed their aircraft by adding additional cargo space to flight cabins and extra space around passengers for safety. This is enabled by the seamless integration between airline systems from inventory to reservation, departure control, and offer management.
Fully integrated systems also mean that even if unforeseen events like last-minute aircraft changes occur during operational windows, airlines can immediately and automatically reseat passengers and adjust weight and load balance – thus avoiding expensive and inefficient manual intervention.
3. Increased choice through interlining and codeshares
The reduction in flight routes has prompted increased airline consolidation and collaboration; and we expect interlining and codeshare agreements to become a mainstay.
As well as choosing the right partners to collaborate with, success will come down to airlines having the right technology infrastructure. Dynamic customer identification and sophisticated airline policy controls to automate flight schedules and codeshare agreements will be key; as will the ability for carriers to easily work together with each other third parties.
For this reason, we’ve made ‘collaboration’ a founding principle of our airline solutions. Our Altéa suite, for example, is designed to deliver a common core functionality to a community of airlines as an alternative to high cost, ongoing IT development within each airline. We’ve also made our Amadeus Airline Platform an open system to allow third parties to develop on top of Amadeus technology. Crucially, this helps to fast-track development from concept to market.
4. Flexible cancellation, rebooking and revenue management
Finally, a seamless cancellation and rebooking process – underpinned by a smart inventory management system – will be critical to reassuring travellers, and tempting them back to frequent flying.
This includes using advanced availability management techniques, dynamic customer identification and sophisticated airline policy controls to automate flight schedules, codeshare agreements, re-accommodation and seating. This helps maximise airline network yield, increasing revenues and improving efficiency.
Carriers could also consider turning any under-capacity issues into a positive by making it easier for their customers to redeem existing reward points.
Flexible revenue management will also be critical for airlines looking to respond quickly to fast-changing consumer behaviour and shorter booking lead times, by shifting away from models that use historical data in favour of real-time demand analysis and use of merchandising techniques to shape hyper-relevant offers.
For this reason, we have incorporated artificial intelligence and machine learning algorithms into our revenue management solutions. This allows an airline to build models where there is no precedent upon which to rely and quickly identify patterns of recovery, permitting airline partners to seize new opportunities.
Ultimately, despite the challenges faced by aviation, airlines can still use this time to prepare for the future. And as some airlines in our region have recently demonstrated, there are still opportunities for those that can adapt to the new operating environment, too.
Flexibility should be the cornerstone of all carriers’ mid-term plans – building in a greater level of agility than ever before so that technology, systems and staff can respond quickly as the situation inevitably continues to change.
Singapore Airlines (SIA) Group will cut around 4,300 positions across its three airlines – SIA, SilkAir and Scoot – as coronavirus continues to batter the global aviation industry.
However, the potential number of job cuts may be reduced to about 2,400 in Singapore and across overseas stations, due to a number of measures that the airline has taken since March, including a recruitment freeze, natural attrition, and a voluntary release scheme for cabin crew.
“This decision was taken in light of the long road to recovery for the global airline industry due to the debilitating impact of the Covid-19 pandemic, and the urgent need for the group’s airlines to adapt to an uncertain future,” it said.
The group reiterated that it expects to operate at less than 50 per cent of its capacity at the end of the financial year as compared to pre-Covid levels. Industry groups have also forecast that passenger traffic will not return to previous levels until around 2024, it added.
“Relative to most major airlines in the world, the SIA Group is in an even more vulnerable position as it does not have a domestic market that will be the first to see a recovery,” it said. “In order to remain viable in this uncertain landscape, the group’s airlines will operate a smaller fleet for a reduced network compared to their pre-Covid operations in the coming years.”
SIA said that it is working with Singapore-based unions to finalise the arrangements for those affected, and will try to minimise their stress and anxiety.
In a memo to staff, SIA CEO Goh Choon Phong said that no one could have predicted the pandemic’s devastating impact on the global aviation industry at its onset early this year.
“Having to let go of our valuable and dedicated people is the hardest and most agonising decision that I have had to make in my 30 years with SIA,” he wrote.
“For our impacted colleagues, please know that this is not a reflection of your individual strengths and capabilities. It is the result of an unprecedented travel paralysis brought about by a global pandemic.
“Please also be assured that we will conduct the process in a fair and respectful manner, and do our best to ensure that you receive all the necessary support during this very trying time.”