Skyscanner’s Hugh Aitken recently delivered a keynote speech at CAPA’s Airline Leader Summit in Dublin. He explored the European aviation market and a mobile-first offering that meets the expectations of modern travellers. Read on for some key highlights from the presentation, and a brief summary of some of the main talking points at the event.
Skyscanner, the world's travel search engine, has announced its latest partnership with Swoop, the Canadian ultra low-cost carrier.
In 2019, it’s fair to say that personal assistants are more than just fun little gadgets; they are now a common household item and for some, part of everyday life. A study by NPR-Edison Research showed 100 million units have already been sold worldwide and ownership is projected to reach 225 million by 2020 – outpacing the adoption rate for smartphones a decade ago.
Today’s tech-savvy, mobile-first consumers are increasingly choosing the travel services that give them power and control over their trip – and ditching those that don’t. What’s more, they are also looking at digital platforms that allow them to research, plan and book their travel without having to navigate between numerous apps and websites.
Faical Allou is a former Skyscanner employee with more than 10 years’ experience in the airline industry. In this exclusive interview, he explains how this experience led to his first book, A Lifelong Flight, and why a frictionless experience for travellers is indeed the way forward in 2019.
His novel follows Sam, a professor in business strategy who finds himself on a mission to rescue a start-up airline in Bali while navigating an industry that is completely unknown to him.
It’s been a progressive and productive year for the travel industry. Headlines throughout 2018 highlighted the challenges from this ever-growing sector of the global economy as well as the positive impact. Whether it’s about enabling further travel through new routes or the latest innovations in aircraft and engine design, we watch these industry level changes with huge interest at Skyscanner. In the last 12 months, our experts have led and joined key discussions, focusing particularly on one key question: what themes will continue to disrupt the industry?
Hugh Aitken, Senior Director, Strategic Partnerships looks back at 2018 and shares his thoughts on three key areas that airlines need to focus on in 2019 and beyond.
1. A seamless mobile experience
According to Skyscanner’s data, mobile now accounts for 63% of all traffic which is why we are constantly investing in the technology to build a better mobile experience. This continual move to mobile brings with it the need for a new approach.
It is vital to think mobile-first. Mobile demands a different design and user philosophy, a different way to retail as well as the need for frictionless search and booking between platforms and device types.
At Skyscanner, we take a mobile-first approach. We orientate around our app and build for that platform. An important step to helping travellers has been our focus on growing Direct Booking.
In the last year, we partnered with IATA to launch a Guide to NDC as a future-proof roadmap. IATA predicts that by 2037, there will be as many as 8.2 billion air travellers. It is therefore essential that airlines create mobile platforms that consider each step of the user journey.
We have successfully partnered with airlines like Singapore Airlines and Aeroflot to create a more agile, connected and efficient customer experience with Direct Booking. Through this connection, customers are able to book flights more conveniently through the Skyscanner site. NDC has been adopted more widely by airlines in the last 12 months and even more now understand its benefits, such as ancillary upsell.
2. A simple transactional marketplace
In the last 24 years, Amazon has evolved from an online store for books to a one-stop platform for all your retail needs. For some reason, the travel industry hasn’t quite figured out how to replicate this winning formula. There is still room for movement and Skyscanner plans to close this gap as we further transition to a marketplace, showing our partners more strongly by matching data and search behaviour. By optimising our products as a marketplace with multiple capabilities, we can provide our 80m monthly active users with options most tailored to their needs.
The future of travel and distribution are dependent on this yet even today, the majority of online sales opportunities rely on too many dependencies. Skyscanner believes that this is where we can offer the most value for airlines. As a marketplace, we provide the platform for partners to control their brand while we enable the connection between customer and brand, regardless of the context of purchase.
3. Look to the East for inspiration
As a global travel leader, Skyscanner knows first-hand which regions and markets are disrupting the industry. When it comes to travel technology and innovation, airlines should look East. In a 2017 whitepaper, our experts shed a light on China and the opportunities this market continues to present.
Let’s look at Tmall. Introduced in 2008, this Chinese marketplace, operated by Alibaba, offers brands the space to run their shops on the site. However, the competition element for airlines doesn’t go away. If anything, marketplaces encourage brands to up the ante, particularly when it comes to differentiating the shopping experience for travellers.
Alongside this, there are two particular trends to highlight:
The speed of adoption: the pace of development in Asia is phenomenal. Whether you look at the growth of adoption (it took 1.5 years for WeChat to reach 100m people vs 15 years for feature phones) or the potential of markets, less than 50% of the population across Asia have access to the internet vs more than 80% in Europe. This huge growth potential will drive innovation especially as user demand for this technology grows exponentially
The variance in payment methods: QR codes and mobile payment methods continue to grow at a pace across Asia. Between 2012 and 2016, QR codes, as a method of payment, grew from $0.01trillion to more than $5trillion. Finnair are a great example of an airline that embraced this new landscape for payments. As a result, they became the first airline to team up with Alipay for in-flight shopping and payment.
While trends emerging from Silicon Valley will continue to be important, ‘Look East’ should be the new mantra for airline management teams who are grappling with technology and change.
As 2018 comes to a close, there is a great deal to reflect on and if airlines can prioritise the three key areas above, the industry is sure to see even more advancement and movement next year. As a global brand, Skyscanner has an important role to play within the industry, particularly with 80m monthly active users. Our ongoing objective is to put the traveller first and this will continue into 2019.
For even more insight into the 2019 travel landscape, check out our trends piece here.
Last week CAPA – Centre for Aviation hosted its World Aviation Outlook Summit in Berlin. With presentations from 20 of the airline industry’s key C-suite leaders, key topics addressed at the summit included:
Changes in distribution and how the push by IATA for airlines to implement the NDC standard has encouraged the industry to adopt a retail focused approach to distribution
The digital economy – how will airlines differentiate their product offering and deliver a personalised and seamless experience for customers
Environmental sustainability - how the industry is working to safeguard the environment, from today’s new generation fuel-efficient to tomorrow’s electric aeroplanes
Hugh Aitken, Commercial Director at Skyscanner, joined other leading industry experts for a discussion around the need to speed up the transformation of the industry.
Other pannelists included:
William Owen, Founder at Made by Many
Kevin Clark, CEO at Bluebox Aviation Systems
Kristian Gjerding, CEO at CellPoint Mobile
Christian Langer, Vice President at Lufthansa Group
The discussion highlighted how airlines now operate more as digital companies rather than just transportation companies.
Other questions that arose during the panel discussion:
Outside competition – is it required to fire up internal creativity?
Are big organisations simply unable to cope with the speed of change in technology and customer behaviour?
How to identify the winning ideas?
Putting the framework in place first - deciding on an airline’s digital strategy
How global alliances are using technology to facilitate multilateral connectivity and deliver benefits to customers of member airlines
Additionally, many airlines now lean on creative technology start-ups to identify solutions for their technology, operations and customer service problems.
Hugh Aitken shared his thoughts on what airlines need to do in the continually evolving mobile travel marketplace. He said that the digitalisation of airlines would be an “absolute benefit” for travellers and the customer experience.
“We need more help from airlines to do the right thing for travellers”, he said, adding “there is a huge difference between different airlines in terms of digital capacities”.
NDC was a central theme at the summit with discussions focussing on how the adoption by airlines will continue to accelerate into next year. Finnair chief commercial officer Juha Jarvinen endorsed NDC adoption saying “NDC will distribute ancillary elements much better than the carrier can through GDS”.
50% of passengers buying on finnair.com buy ancillary items, Mr Jarvinen said, adding the carrier has improved GDS channels to sell ancillary, with one in 10 purchasing ancillaries compared with one in 100 passengers three years ago. There is still a “huge difference” compared to what can be done with NDC, Mr Jarvinen concluded.
Skyscanner, the world's leading travel distribution platform, today announced a partnership with Aeroflot on its Direct Booking platform. Skyscanner began working with Aeroflot on direct bookings in July 2017 and is now fully live across all markets, web and mobile channels. Customers searching for and choosing to purchase Aeroflot flights on Skyscanner are now able to complete their booking directly on Skyscanner without having to be re-directed to Aeroflot’s website.
The move to Skyscanner’s Direct Booking Platform means that Aeroflot, which is in the top 20 aviation holdings in the world by the number of passengers carried, will become the first Russian airline to sell airline tickets directly through Skyscanner’s web and mobile channels.
Mikhail Safarov, Director, Product Quality Management Department, PJSC Aeroflot comments: “Technological development is a key priority for Aeroflot, and with that in mind we are integrating direct distribution of flight tickets protocol as well as the New Distribution Capability (NDC) standard developed by airline association IATA. This technology makes it possible to not only sell tickets and other services through our own website, but seamlessly through metasearch engines such as Skyscanner as well. Aeroflot places great importance on maintaining its position as a leader in technological innovation and has received Level 3 status under the NDC programme, the highest certification status.”
Hugh Aitken, Senior Director of Strategic Partnerships at Skyscanner said:
“We are delighted that Aeroflot has joined the ever increasing number of airlines adopting our Direct Booking Platform. We want to bring airline products on our site as close to the direct experience as possible, with carriers controlling their products and brand while benefiting from our global traffic and audience, across a range of devices. We are extremely confident that both Aeroflot and its customers will benefit from this new integration.”
Skyscanner has already partnered with a number of other airlines from major carriers to low-cost airlines to offer a Direct Booking service, including Pobeda Airlines, Cathay Pacific, Finnair, Iberia, Singapore Airlines, British Airways, Vueling Airlines and Scoot.
 This fact was recorded in the “World Airlines Report - 2018” published by the American magazine Air Transport World, as well as in the “Leading Aviation Groups” rating compiled by the British publication “Flight Airline Business”.
In this latest blog, we take a look back at last week’s CAPA Aviation summit in Singapore and review the highlights of the panel discussion on NDC – Distribution Game Changers – Adopt or Perish? Gavin Harris, Commercial Director at Skyscanner within our Airline Partnerships division was joined on the panel by Cyril Tetaz, Executive Vice President, Airlines, APAC, Amadeus, Chris Ramm, Vice President Asia Pacific, Air Partners at Travelport and Campbell Wilson, SVP Sales and Marketing at Singapore Airlines.
Legacy distribution systems have for decades presented airlines with the twin problems of high costs and product commoditisation. In efforts to address these issues, a handful of carriers in Europe, and now Asia Pacific, have invested heavily into establishing their own API channels with agents, while the concurrent push by IATA for airlines to implement the NDC standard has encouraged the industry to adopt a retail focused approach to distribution. The GDS will also need to evolve in order to remain relevant and to compete effectively against other intermediaries and aggregators such as metasearch companies (some of which now have direct booking capabilities), as well as digital behemoths such as Amazon, Google, and Facebook - to gain a slice of the pie.
But as airlines work on enhancing their retail offering and improving their merchandising capability via both direct and indirect channels, a resounding message from industry players is that airlines need to consider the importance of mobile and messaging platforms, which are slowly replacing the desktop as the preferred interface for researching and booking travel.
Is this increasingly fragmented and complex commercial and technological distribution landscape sustainable? How will business models evolve in response? Is there a need for a direct connect aggregator?
Should airlines build lots of direct connects or revert back to lean, centralised distribution channels?
Who is going to be offering services to bridge the gap between airlines/aggregators that are NDC compliant and those that aren’t? Will it be the GDS and IT providers, other airlines or speciality providers?
How are newer intermediaries adding value to airline distribution?
How do airlines enhance their digital shopfront? Are airlines over-emphasising the importance of airline.com over mobile messaging platforms and bot technologies?
Speaking on the issue of NDC and Customisation, Gavin commented on Skyscanner’s future NDC strategy and predictions, stating:
Our pipeline of partners with NDC is getting healthier, we're trying to scale the type of ancillaries that airlines can have. We realise you can't go to heavy on customisation.
Further issues explored during the panel discussion included:
NDC - Metasearch - Direct booking capability - How Skyscanner is accelerating new channel adaptation for Airlines
What will the crystalball for Metasearch looks like in 2 years time (Airline , Travel distribution - NDC)
Experiences of BA, Avianca, Singapore Airlines in NDC direct connect - lessons for other Airlines
Retailing, dynamic fare, speed to market, - Good Quality Traffic, High yield - what are marketing opportunity for Airlines - large & small - Can they afford it?
Mobile, messaging- Metasearch - Plans for an integrated solution for airlines?
In a bid to provide more of a consistent product offering across the entire travel distribution ecosystem, Skyscanner announced last month that it had joined NDC Exchange, a platform that enables content interoperability across the airline distribution ecosystem and is a trusted bridge between the International Air Transport Association’s (IATA) New Distribution Capability (NDC) and traditional distribution methods. The addition of Skyscanner’s impressive reach to NDC Exchange adds value for all on the platform through a growing network effect. Each month, 80 million people use the Skyscanner website or its highly-rated mobile app, which has been downloaded over 70 million times. Skyscanner’s global reach can also be seen through its products that are offered in over 30 languages and 70 currencies.
Hugh Aitken, Senior Director, Strategic Partnerships, Skyscanner will be speaking next at World Aviation Outlook Summit, Berlin on 27-28 November.
At 50, the 747 is nearing retirement, but the ‘Queen of the Skies’ was never expected to be around this long and is still destined for greatness by fulfilling the second career her designers had originally planned. Here are seven reasons to love the 747.
In the 50 years that passed from the 747’s first flight, aviation has seen a dramatic shift. Over ten times more people (3.97 billion) travelled by air in 2017 than when the 747 entered service in 1970 (310 million). There are a lot of planes of all shapes and sizes serving those passengers today, but the 747 was responsible for making flights more affordable and encouraging more people to fly.
Before the 747, airfares were too high for most people to dream of traveling by air. While the deregulation and privatization of airlines led to the most significant reductions in air fares, the 747 helped things along as the first aircraft able to fly large numbers of passengers.The first model was designed to fit up more than 360 passengers, and later versions could accommodate nearly 500.
Its fuel efficiency may be less than newer aircraft built today, but the 747 was designed to dramatically reduce fuel consumption (the 747-100 used 33% less fuel than its predecessor Boeing 707-320C). This made the 747 cheaper for airlines to operate on long-haul routes.
For all of its size, the 747 is the fastest passenger plane in the skies, capable of flying near the speed of sound (Mach .92). It also had significantly more range than its predecessor, able to fly 5,300 nautical miles (over 9,800 kilometers). This allowed airlines to introduce more direct flights on longer routes.
The 747 changed things on the ground as well. Just to build the plane, Boeing had to build first build what was at the time the largest building by volume in the world—the 747 manufacturing plant. Airports had to adjust, introducing twin jet bridges that could get passengers high enough to board the aircraft and ground equipment had to be re-designed. Catering trucks were first put on lifts to serve the Queen’s meals.
Of course, the 747 changed everything about air travel on the inside. It was the first wide-body plane with a unique architecture for the main cabin and upper deck. Airlines began to experiment with the space and the seat classes and services available, including piano bars and lounges on the upper deck. The 747 required more flight crew onboard and new service procedures, including new ways to prepare, stack and serve hundreds of meals. All of those improvements and experiments trickled down to the design of smaller jets that fly today—and modern large ones too.
Because the 747 was a large financial risk for Boeing, its designer Joe Sutter, made a back-up plan right at the front. The nose of the aircraft lifts up to reveal considerable cargo capacity which can be loaded easily. Cargo plays an important role in airline profitability—even making passenger planes more profitable. Sutter had plans early on for the 747 to serve as a freighter when its useful life as a passenger plane ended. Frankly, Sutter never expected it would last this long. That freight capacity still makes the 747 attractive to airlines and will keep the plane in the skies longer, even if the only passengers remaining onboard are the crew. The most remarkable cargo the 747 ever flew was the space shuttle, which was mounted on the back of the aircraft.
While all U.S. airlines have retired their 747s, Air China, British Airways, KLM, Korean Air and Lufthansa will keep theirs in passenger service a little longer so there will still be an opportunity for 747-lovers to fly this history-making plane. New Air Force 1 aircraft being built to serve the President of the United States, are still planned as 747 models.
Juan Trippe, the bold and visionary CEO of Pan American airlines, can be credited with giving life to the 747 program in the first place by insisting on a plane twice the size of the 707. He wanted a plane that would change the world; in his words, “a great weapon for peace, competing with intercontinental ballistic missiles for mankind's destiny.” Joe Sutter and Boeing certainly delivered.