Amazon Web Services Worldwide Head, Travel & Hospitality Solutions Massimo Morin at CAPA’s Airlines in Transition 2022 summit

Transcript

Massimo Morin:Digital transformation was always on the agenda. It was on the agenda before the pandemic. And what happened is that during the pandemic, the first few months, people were in a panic mode. They were stopping everything. They were trying to understand what this was going to pace out. And they realized that investing into technology and accelerating the digital transformation was actually in their best interest. They wanted to leverage this time in which there was a drop in demand to start transforming themselves, not only on the digital assets and the digital aspect of the company, because we have seen it in the past. Digital transformation usually came out to be a new website on a new mobile. Now instead is trying to understand better the customers, look at the digital assets, but also look at your operation, how you can actually shut down an airline, shut down travel suppliers, save money on that, on that side, experiment and try new business model, try a new initiative, try it out, and then ramp it up and see if it works. So we are seeing an adoption of modern technology like cloud technology, not only on the customer engagement but also on the operation side, especially on airlines that they have it for 60, 70, 80, 100-year-old organization with mainframe and very complicated processes. So there are some industry leaders like Qantas, United, Delta, Air Canada that actually took this opportunity to transform themselves, to adopt this technology into to accelerate. I remember, I remember Glenn Morgan, the now Group CTO of IAG, that says that COVID was the best chief digital officer because it accelerated their agenda by more than 5 years in less than one. So there is this type of event occurring today, and if they are not occurring now, I do not know when is the best time of doing this. I still remember the time in which People were saying, when things are going well, nobody wants to tinker with the technology or the processes because things can go bad. Then when things go bad, they said, well, let's not tinker with it because things can go worse. Well, now we were at the bottom. There is the time of investing into this initiative because the recovery is coming. We know there is a pent-up demand. How can we capitalize on that as much as we can? And this is happening today. So in the short term, The pandemic itself changed a lot of customer behavior. The models that were in place before for customer engagement, for product pricing, or the definition of the product actually changed. What the customer wants is different. They're booking much closer to the departure date. They want refundable or changeable fares. They want a no-change fee and so forth. So the idea here is airlines are able to make those changes, but how do you communicate with the customers? How do you put in at ease that they can actually purchase your product, they can travel in certain locations. So the area that I'm seeing the most change is on the customer engagement. They use, for example, we have Skyscanner, a customer that is all in on AWS, that using an AWS partner like TravelPerk, they are actually popping up a webpage in which, based on what is your passport, you can actually see what are the travel restrictions. And talking to them, they were saying that that increased the confidence for people to start traveling, resuming to travel. Other things that we are seeing is contact center modernization. We have example Priceline that migrated to Amazon Connect, one of our contact center technology, that they were able to cope with spikes of 300% in requests overnight. They move all their personnel working from home, and now you can implement very simple changes in your process flow. Things that I am still struggling in other industry when you are on the phone, you call the contact center agent and you wait for hours. Now simply Simple feature like the callback. Callback is you are not spending for the technology of the person waiting online for hours, and I've been on the phone for hours, believe me, two three hours sometimes, and the customer experience is much better. So understanding more on the customer, and then when the NPS goes up, and now you start recording the call and collecting that information, you can start actually understanding better the customer who is coming, when is coming, talking about what, introducing all this automation, offloading. Those transactions from the contact center that are very expensive. It's a very expensive channel. You have operators. So using chatbot and conversational AI. So this is what we have seen, the change of behavior on the customers, change in behavior on the customer service, and then we go to operation. Contactless. So using the mobile app to communicate. For example, how long are the lines at the check-in? How long are the lines at the security check? What gates to go and so forth. We have United that deployed a variety of IoT devices tracking equipment both on the tarmac as well as at the airport, and they were using for optimizing the turn, doing turn tracking. They did an investment of over $10 million in IoT devices, and they realized they saved more than $120 million in finding out the equipment that they didn't know where it was, and millions of hours of user operators' time on locating this. So now when a plane arrives on the tarmac, now the ground operator, the ground crew, can actually clear it right away to go to the gate. So the passengers is not waiting there for the boarding and whatnot, and getting all this information in real time on their mobile app. So these are the kind of things that are occurring today, and it is fascinating, and I'm really excited where we are at today. So the big obstacle before that, it was a perceived obstacle, that was the pandemic, right? Now we have at the industry perspective, there is the fuel prices, the legacy of the technology that they are using. So these companies are rethinking the way they are operating. On the fuel perspective, for example, we have Qantas that actually reinvented flight planning and they are ingesting additional data sources like weather and created a system called Constellation that is basically incorporating weather patterns and riding the wind to reach destinations. That enabled them actually to reduce turbulences, on-time performance, but also reduce the amount of fuel that they bring on the plane. So there is a reduction of fuel used. And what is happening is that Alan Joyce simply said that this system saved us $40 million in fuel bill in 2019, just to give you an idea. But also this way of thinking that came on saving on fuel cost, now it expanded as well. Now I can load less fuel, so it's lighter, and therefore I save on my fuel bill and CO2 emissions. So it's very sustainable. But if I take the same amount of fuel, I can go farther. So now the flight planning becomes network planning. What are the destinations that I can reach? And then what is the equipment that I can use? So it starts talking about fleet planning. So what is the engine and so forth? So you see how there is an acceleration. So the things that make the difference for Qantas or for Ryanair or for EasyJet or for United is actually the change of culture, the change of methodologies of approaching these challenges and having access to technology that enable you to experiment. So the change of culture means you should not be afraid of failure and you should be able to experiment. The technology bit is when you do the experiment, you are not stuck with the cost of it if it doesn't work out. And that is what cloud technology is bringing— off-the-shelf services that you pay as you go. You take it down, you use it, you experiment. It works, scale it up. Doesn't work, scale it down. Ready, go on the drawing board and let's do that again. In a couple of weeks, not in a matter of months or years. I think this is the fundamental change that's going to occur.

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