Eric Leopold

Eric Leopold, IATA director of Transformation. Image: Marisa Garcia

APEX Insight: The Silicon Valley adage “fail fast” doesn’t necessarily sit well in the conservative aviation industry, where the main objective is to eliminate system failures. That said, the principle behind this term is catching on, with airlines embracing a more rapid pace of change and recognizing that they must be disruptors if they are to improve the passenger experience.

Speaking at the IATA World Passenger Symposium in Barcelona today, Eric Leopold, IATA’s director of Transformation, Financial and Distribution Services, updated attendees on the state of industry advancement towards the goal of a simplified, more agile operating model which would benefit both passengers and airline operations. “I don’t think that we can prevent any disruption, but at least we do what we can to be part of that disruption,” he said.

The “Simplifying the Business” (StB) program is an ideation hub, responsible for proposing and following through on IATA initiatives to improve both back-end and front-end processes. Its target is to improve customer service while saving the industry at least $6.5 billion in annual costs. Projects launched from StB which have already changed the way we travel include include e-ticketing, common-use self-service (CUSS) terminals, bar-coded boarding passes (BCBP), IATA e-freight and radio frequency identification (RFID), which has been used to keep inventory on airline parts and is now aiding the deployment of the Resolution 753 baggage tracking initiative.

“It started in 2012, where we had the StB steering group where we defined the vision of the ideal passenger experience,” Leopold said. “Setting this customer-centric vision, seeing the future in 2020; what would we like to be the ideal passenger experience and how we can work together to build it?” More recent developments include New Distribution Capability (NDC), ONE Order, ONE ID, and Open API.

The three focus areas announced today for StB (payment, autonomy, personalization) take their inspiration, at least in part, from ground transportation disruption. Airlines aren’t planning to operate taxi flights – at least for now – but they do see benefits in the transactional model of the ride-hailing service Uber.

“Payments are a big cost to the industry – larger than distribution right now.” – Eric Leopold, IATA

“How can you solve the equation of having safe, fast, cheap payment methods for passenger payments around the world?” asked Leopold. “Payments are a big cost to the industry – larger than distribution right now. But if we look at the Uber experience, payment has disappeared. You don’t even realize that you’ve paid when you leave the car. For now, we are working on mobile payment, maybe one day the payment will even disappear, hidden in the transaction.”

Autonomous vehicles also serve as a source of inspiration to the aviation industry, with advancements in programming allowing TESLA cars to be updated remotely for new applications, like automatically heating up the car on a cold morning before leaving for work, and even travelling with little intervention from the driver. A greater focus on autonomy on the part of both airlines and airports would improve customer service, safety, security and operational efficiency. It could relieve airfield congestion and optimize energy consumption.

As IATA explains in its 2017 StB White Paper, published during IATA WPS, “Going autonomous will commence the capture of a wealth of new data. Analytics of this data with information captured from other sources, such as high-resolution surveillance cameras, will provide currently untapped insights which will drive continual improvement and even greater efficiencies.”

The third focus for StB 2017 is personalization. Airlines are already taking steps to apply customer data to improve service and boost ancillary sales. The aim is to make that personalization more sophisticated and universally adopted, to ensure a seamless journey.

“In the decade that we’ve been leading change in the industry, we’ve learned two big things,” said Leopold. “The first one is that we need to focus on the customer. We’re rethinking everything we do in a customer-centric approach. The second one – and it’s important – is to engage our entire value chain. We’re trying to bring the customer, the airline, the airport, the technology providers – everyone – to engage together.”