Talking tech with AWS – part one: digital transformation is helping airlines
The recent CAPA Airline Leader Summit - 'Airlines in Transition 2022' brought together industry leaders to discuss strategic topics and key megatrends, including decarbonisation, point-to-point travel, business travel, low cost aviation, new entrants, and digital transformation.
The overall mood was positive, with the expectation that the industry would reach 2019 pre-pandemic traffic levels by late 2023 to mid-2024. Nevertheless, there is no lack of challenges ahead, with increased costs due to jet fuel prices, war at the doors of Europe causing traveller uncertainty, and sustainability concerns that are rapidly becoming an existential threat to the industry.
Among the various topics, digital transformation and what it all means to travellers was front and centre, and during the summit Amazon Web Services (AWS) worldwide head, travel & hospitality solutions Massimo Morin sat down with CAPA for a deep conversation on the status of industry transformation, the role of the cloud, and how AWS is supporting airlines in optimising operations and improving customer engagement.
- The recent CAPA Airline Leader Summit discussed key megatrends in the aviation industry, including decarbonisation, point-to-point travel, business travel, low-cost aviation, new entrants, and digital transformation.
- Industry leaders are optimistic about reaching pre-pandemic traffic levels by late 2023 to mid-2024, despite challenges such as rising jet fuel prices, geopolitical uncertainties, and sustainability concerns.
- Digital transformation was a central theme at the summit, with a focus on how airlines are leveraging technology, cloud services, and partnerships to enhance operations and customer engagement.
- Airlines like Finnair and Travelport have embraced cloud technology, partnering with AWS to modernize their IT infrastructure, reduce costs, and accelerate digital transformation.
- Airlines are using AWS services such as machine learning, IoT, and cloud analytics to optimize flight operations, reduce fuel costs, improve sustainability, and enhance customer experiences.
- AWS is playing a crucial role in helping airlines improve operational efficiency, automate processes, and drive innovation through data-driven decision-making and industry-specific solutions.
In the first of a two-part report we initially discuss how airline investments in modern technology are improving how they manage operations.
How did airlines react to the COVID-19 pandemic, and how are they preparing for recovery?
The COVID-19 pandemic is two years in.
After the initial shock, travel and hospitality companies, specifically airlines, considered freezing their operations and reducing their costs.
They quickly realised that although grounding planes was easy, cutting other costs was not. Customer service and the technology that they were using was not designed to scale up and down based on demand.
As such, we have seen a desire to transform the way that airlines are operating across IT, airline operations, and customer engagement. They want to be more agile, scalable, and flexible to handle waves of operational needs and spikes in customer support.
For example, in Aug-2020 Finnair decided to move out of its data centre and went all in on AWS.
Working with Nordcloud, an AWS partner, Finnair migrated a mix of 450 servers and 20 applications that needed rearchitecting and replatforming to deliver on the business case in just seven months. After the first phase of the migration, it reduced IT infrastructure costs by 45%.
In the fall of 2021 Finnair took the next step in its migration, which included exiting two data centre applications hosted on approximately 400 servers, which were vital to Finnair's daily operations.
The estate was a mixture of Windows, SAP, VMware, legacy Windows 2008, Windows 2003, and even Windows 2000, Oracle, and IBM AIX software. Some of the technology, such as ticketing booths, had not been touched for 20 years and required updating before the migration was even possible.
Even traditional and institutional technology providers invested in new technology.
Travelport, for example, not only committed to move out of its data centres and decommission its mainframes but also signed a strategic, long term agreement to use the advanced cloud technology of AWS to accelerate the digital transformation of retailing in the travel industry.
The agreement, which unites expertise in travel technology, cloud technology, and hyperpersonalised retailing, is focused on "powering a simple, smarter, and better future for travel retailing", according to its announcement.
What is the status of digital transformation in the industry from the technology and cloud adoption perspective?
Airline industry leaders, like United Airlines, Delta Air Lines, Air Canada, Ryanair, Qantas, and TUI, took this opportunity to modernise their operations and move away from legacy systems, and, where possible, to reinvent processes, initiating innovation.
There are many cases where airlines started looking at hardcore problems beyond digital assets - for example, websites and mobile apps - and focused on their core business needs, like improving revenue management, flight planning, and ground and flight operations.
For example, United, an all-in AWS customer, partnered to install over 20,000 Internet of Things (IoT) devices and cameras to monitor equipment locations at Newark Liberty International Airport (EWR).
This included tow trucks, catering, cleaning, fuelling, and planes, as well as on-the-ground equipment such as wheelchairs, personnel, and passengers. United saved more than USD120 million in ground equipment purchases and over 1.3 million hours of personnel search time.
Demand is rising, but so are fuel and food prices...how do airlines partner with AWS to reduce spending?
Several airlines have partnered with AWS to use machine learning (ML), IoT, and other cloud services to significantly reduce costs and waste to improve their sustainability posture.
Qantas cut fuel costs significantly using cloud flight analytics, called Constellation, to plot optimal flight plans that avoid headwinds in favour of time-saving tailwinds to go from origin to destination.
Constellation is helping Qantas not only to plan routes and save fuel but also to improve its sustainability posture. "That's going to save us USD40 million in costs each year by a 1-2 per cent improvement on these flight plans", said Rob James, chief technology officer at Qantas, in a recent article. "We're going to reduce our carbon emissions because of that system by around 50 million kilograms each year."
In another example, Ryanair is forecasting to save substantial fuel costs by dynamically planning where aircraft should be flying and allocating the right plane to the right route by using a cloud-based flight simulator.
The idea behind it is quite simple: given that the most fuel consumption and engine stress occur during take off, when climbing to a cruising altitude, Ryanair is placing the most efficient plane-engine combination on the routes that have most take offs. This is also helping in its maintenance planning.
Ryanair's 'Panini Predictor' uses ML to predict how much fresh food is needed on each flight, reducing food waste and improving selection, so that each passenger can choose a preferred sandwich onboard.
This is not a simple feat, considering that the company has nearly 500 aircraft and runs about 2,000 flights a day, with a single plane traversing multiple routes across multiple countries. Each plane has limited space and can be restocked only once every 24 hours.
This solution helped the company to boost its revenue and cut waste by more than half. That is true innovation.
How is AWS helping travel companies and airlines improve operational efficiency?
Travel companies, and airlines specifically, are resuming operations, but they want to do it right. They have labour shortages, so they are investing in automation and self-service tools. They also want to improve their sustainability posture and reinvent their decades-old processes with modern technology.
To do all this, data is the glue to make it all happen. They are moving toward a data-driven culture: making data accessible across their organisations to drive timely insights and make decisions faster.
For example, Ryanair digitised its aircraft maintenance history, or logbooks, usually collected and stored away in a warehouse. This helps them to do real-time reports on aircraft health and feeds the information into the company's predictive maintenance system to identify anomalies. Digitisation has cut down data collection from two weeks to near-instant, removed the approximately eight hours a day of maintenance data categorisation, and made maintenance reports available in near real time. As a by-product, Ryanair does not need to store the paper anymore, saving trips to an off-premises 415 square metre warehouse that is now decommissioned.
AWS is not only helping these reinventions and bringing to light these innovations, but is also promoting reference architecture like the Airline Data Platform, the Airline Schedule Engine, Aircraft Predictive Maintenance, and the Aircraft Turn Tracking that show best-in-class architectures. It is also partnering with industry leaders, like Datalex, Elenium Automation, Flyht, IBS Software, OpenJaw, and other ISVs to make their solutions run smoothly and natively on AWS, to be scalable to their customers' needs, and to be more cost effective.
AWS is going a step further: where there are gaps in the market, it is developing industry-specific solutions, promoting standards, and helping applications' interoperability. (You can find more about the solution areas and the specific use cases that AWS is investing in on the AWS website and solution library.)
Look for part two of this report to learn how AWS is supporting airlines in transforming their customer experience with the cloud.
You can also view a CAPA TV interview with Massimo Morin from the sidelines of the CAPA Airline Leader Summit - 'Airlines in Transition 2022' where he speaks about latest industry trends and the growing digital transformation of airlines, airports and travel. The executive also spoke about how airlines have adopted advanced digital transformation strategies during the COVID-19 pandemic as businesses adjusted and as customer behaviours changed.
About Massimo Morin...
Massimo Morin brings 20+ years of experience in the airline and hospitality industry as a developer, analyst, product designer, and business development.
His core expertise is in airline pricing, distribution, revenue management, and ecommerce. Based in Boston, MA, he is now responsible for AWS engagements globally in the travel/airlines space for AWS.
He graduated in Software Engineering from the University of Venice and acquired a MS of Transportation / Airline Business and Management from MIT. He is Italian by birth, with a passion for cooking, and has travelled the world extensively.
About AWS Travel and Hospitality…
AWS Travel and Hospitality is the global industry practice for Amazon Web Services (AWS), with a charter to support customers as they accelerate cloud adoption.
Companies around the world, across every segment of the travel and hospitality industry - and of every size - run on AWS.
This includes industry leaders like Airbnb, Avis Budget Group, Best Western, Booking.com, Choice Hotels, DoorDash, Dunkin' Brands, Expedia Group, Korean Air, McDonald's, Ryanair, SiteMinder, Sysco, Toast, United Airlines and Wyndham Hotels. These companies and many others are transforming their businesses by leveraging technology to enhance customer experiences and increase operational efficiency.
For more information visit: AWS Travel and Hospitality