Notes from the IATA AGM 2017: Key takeaways and a missing link
Last month, the beaches of Cancun, Mexico hosted a large group of airline CEOs, analysts and associated business leaders for the IATA AGM 2017. The present and the future of the aviation business were dissected and debated at the event, uncovering some very interesting potential for innovative technologies. IBS being a key strategic partner of IATA, I was accorded an invitation to the event along with Bratati Ghosh, Chief Marketing Officer. In addition to several direct meetings with our key customer base, the event gave us priceless inputs regarding the enhanced role we need to play in this heavily interconnected ecosystem.
What caught my attention
As a technology company our stated objective is to "partner for transformation" with our customers. From that viewpoint, I could see three clear takeaways from this edition of the IATA AGM:
- Aviation continues to be a robust industry and it is strengthening further in its position as a facilitator for the world economy. It is therefore a good strategy to invest in this ecosystem, especially in enablers like technology which will help realize its full potential.
- Data focus is essential, but currently inadequate in the aviation industry. Change may be driven by multiple factors – geopolitical, economic or environmental. The only way to mitigate such unpredictability is through actively managing intelligence to foresee the future.
- 'Security versus convenience' is a key challenge, manifesting in issues such as the controversial 'laptop ban' for Middle Eastern carriers or the region-specific immigration controls. The aviation industry recognizes the void in its strategic approach and needs technology innovators such as ourselves to come up with creative solutions.
For quality and cost
It is heartening to see industry leaders recognize that legacy systems are a real hurdle to their operations and seek to invest in modernization. Costs continue to be a prime concern for all types of carriers, but predictably more so for LCCs. Failure of IT not only slows down, but completely paralyzes a business in today's landscape. Outsourcing isn't a full transfer of accountability; airlines therefore need a recovery plan in case the worst happens on account of obsolete systems or irresponsible service providers. Reliability and efficiency are clearly measurable parameters for success, as is cost savings – probably the best incentive for an airline CEO today, as was confirmed in my conversation with the CEO of a large Asian carrier!
A missing link – Customer focus
Customer focus conspicuously seems to be missing from the list of priorities for most airlines, and it is probably the only industry of this scale where that is the case. I can imagine customer engagement as a viable byproduct of operational efficiency, but its real impact on the bottom line is probably not sufficiently clear to most airline CEOs. The technology industry is built around the principle of customer focus, which probably means the onus falls on companies like ours to make it part of our partnership goals to deliver value to the end customer. Most of the underlying problems – like imperfect markets (due to heavy demand), incentive models disconnected from customer satisfaction, and the lack of visibility into the long term impacts of unhappy customers – can and must be solved though technology anyway. The key lies in understanding the customer base and segmenting them in a way that doesn't cause service quality compromises. Levels of service may vary, but quality cannot.
Discard legacy, embrace agility
There was also much discussion on the need for better communication for crisis management. Recent incidents that led to horrendous customer experiences were interpreted to be miscommunication issues to some extent, rather than purely customer service issues. But the important thing is, such incidents are taken note of, and diligently avoided in future. Oscar Munoz (CEO of United Airlines) pointed out that policy is built on a foundation of safety and security, with hardly any cushion when it comes to implementing customer service. I also strongly agree with Enrique Beltranena, CEO of LCC Volaris, that customers cannot be treated in a mechanized manner. Ironically, it may be the very fear of the PR fallout that clouds judgement and lead to actions that cause a PR disaster such as the one we came across recently. To me, it all boils down to a lack of flexibility. Humans can make decisions but the inputs, as well as the implementation, essentially depends on a system that is built on technology. Once the bigger airlines get their legacy systems out of the way, they can embrace the agility and nimble operations of a new generation airliner. We already have the software in place for such a system!
A nagging question
The next edition of the event is scheduled to be held in Sydney, and I believe IBS will continue to have great stories to tell the attending CEO community there, as well as bigger opportunities for collaboration. Just one question nags me about my flight there – will it be with laptop, or without? Well, the picture looks a lot better these days!
Jitendra Sindhwani is the President & Head of Aviation Business Services and leads all aviation verticals - Airline Passenger Services, Airline Cargo Services, Airline Flight Operations Services, Aircraft Maintenance & Engineering Services and Airport Operations Services.
He is a veteran professional who has made a mark in the global technology arena with over 19 years of diverse experience in management consulting and IT services for different verticals – Communications, Media and Entertainment. Prior to joining IBS, Jitendra was with technology services giant Infosys for 16 years and has contributed significantly to the company's growth across different regions, clients and verticals. He has led several strategic projects including M&A initiatives, penetrating into the emerging digital and SMAC space.