With so many airlines chasing net-zero emissions targets, one of the easiest ways to achieve this is to fly less. However, that runs counter to the way most airlines do business, which is to encourage people to fly more to grow the business and revenues. But that is not a very environmentally friendly way of doing business. Artificial intelligence (AI) could potentially be a circuit breaker, encouraging people to fly less but spend more when they do fly.
“COVID-19 has presented the opportunity to reorganize how airlines do business so that it has a positive impact on the environment,” says Mike Sloan, Travel Retail Vice President at AI software firm PROs. “There’s an opportunity for airlines to use AI-driven insights to keep up with the trend of taking fewer, longer trips, to advise customers and make their booking experience feel more personal and responsible.”
COVID-19 put the brakes on passenger demand worldwide. Particular markets and market segments are bouncing back faster than others. Compared to February 2019, seat availability was down just 11.3% in North America last month but down 48.6% in the Southwest Pacific.
Travel restrictions and border rules have a lot to do with those numbers. But the human factor is also at play – many people are making a conscious decision to fly less. Health rather than economic reasons drive that. But that reluctance to fly is likely to erode over time. Airline trade group IATA expects airline passenger numbers to eclipse pre-pandemic levels by 2024.
What then? Airlines will be hungry for revenue after years of losses, and fuel-efficient aircraft can only do so much to help in net-zero goals. Mike Sloan says new traveler profiles are emerging, like the ‘bleisure traveler’ who adds personal time to business trips, or a ‘worker nomad traveler’ who travels and stays in destinations for longer.
PROs had identified new types of travelers and new, more environmentally friendly travel patterns which airline AI can harness. Photo: Getty Images
Airlines can tap into AI to sell more than flight tickets
Innovative airlines can harness AI to target these emerging types of travelers by interpreting data to see where these travelers stay, what they like to do there, and how they like to fly. A savvy airline can potentially offer more than a flight ticket, thereby boosting per traveler revenue to offset revenues lost from less flying – a quality over quantity scenario.
“Airlines could reward travelers with reduced prices for taking less flights,” Mr Sloan suggests. “If there are three days between your flights, the price would be higher than if you stayed two weeks between flights.”
While that seems counter-intuitive to the way most airlines currently operate, if the airline uses AI to sell accommodation, flight upgrades, or build in ticket flexibility, it’s potentially cost-neutral for the carrier or even cash positive.
AI can potentially change the way airlines interact with their passengers, what, and how much they sell. Photo: Ontario International Airport
A change in the way airlines approach passengers
It’s a nice idea, but it depends on airline AI getting a lot smarter and more intuitive. It also depends on the trend of people flying less continuing and airlines remodeling their way of doing business to accept this. There is no guarantee any of this will happen or is even likely to happen.
While Mike Sloan admits artificial intelligence isn’t fully there yet, especially at legacy airlines with clunky back systems, he does argue it is the way of the future for the airline industry. It will take some time, but he suggests AI will become critical to minimizing airline operating costs and maximizing revenues while sticking to environmental goals. Airline AI will become more subtle and better able to meet passenger requirements, slowly bringing passengers onboard.
“The majority of airlines using AI are just starting to scratch the surface, and they are mostly the largest airlines,” he adds. “The ability of airlines to offer digital retail and digital offers that provide customers with the flexible, modern booking they expect is critical. We’re seeing more and more airlines transition into this way of thinking.”
The US and UK’s civil aviation authorities will collaborate towards eVTOL certification.
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