Mega-Trend 6: Digital Transformation

Transcript

Hugh Aitken:We all know the pandemic's changed a huge amount, and one of the things I think for all of us it has been has changed our use of technology, and it has been an accelerant for how technology is used in our personal life, our business life, etc. And I think it's also been a generational shift in technology use. If I look at my parents who struggled with the basics of technology in the pandemic, They struggle slightly less now. So I think there's been a huge generational shift in, in how technology is used by consumers, and we are starting to use it in our business world as well. I think those behaviors are here to stay, and I guess the question for us is, how is travel responding? So I'd like some participation, please. Um, there's going to be a question. If I go into the next slide, if you go into slido.com and hashtag CAPA Summit or scan that QR code, there's There's a question in there which is this. I'll come back to the QR code in a second. Is travel responding to the consumer tech transformation which we've seen during the pandemic? And one of 4 answers: we're ahead, we're on track, we're slightly behind, or we're quite a way behind. So if you could go into Slido, please, it'd be great if you could all fill that in and give us a view, and we'll see what it says. Also, we'll unveil the answers during the panel and use that to debate the themes that are coming out of it. Thank you, David. I guess ultimately, you know, the technology world— is it a necessity or opportunity? Are they mutually exclusive? How do we look at them as airlines, as tech providers across the travel chain? And if you look at health passports, that was very much a necessity. It was incredibly fast innovation, but it was a necessity. We needed something like that. But actually, is it actually an opportunity, one, to move at pace? But secondly, a lot of our journey in travel was going digital before the pandemic— digital boarding passes, etc.

David Gunnarsson:Yeah.

Hugh Aitken:So, you know, where it was a necessity, it's actually an opportunity as well. Very much opportunities around automating a lot of the travel journey. I'll be interested with the panel's view and a lot of what's driving those elements. But again, there's a lot coming out in travel about innovation and automation throughout that channel, that journey. The question is, has the pandemic accelerated a lot of that, or was it work that was going on already? And how do airlines and others in the travel chain think about automation and innovation in that way. But coming back to things have changed a lot, you know, 75% of consumers who've used digital channels for the first time during the pandemic are going to carry on using them. So that means our lives have changed forever. How people interact with technology has changed forever. And by 2024, 70% of total e-commerce will be on m-commerce. So that small digital device in your pocket is going to be the predominant way that you are interacting and purchasing with various brands across the world. It's interesting looking at the brands. So these are the top 10 brands that have seen their value increase in 2021. Okay, they're all tech companies at heart, but you could say 2 are more bricks and mortar, you know, Chipotle, I always get that wrong, and Lululemon, bricks and mortar, but they've embraced digital to accelerate away. Tesla is effectively a technology company that builds cars. There's 4 retailers there, 2 media companies, and there's also 2 food and beverage and 1 pure tech company. 5 of them come out of APAC, and that's what's always really interesting for me, how innovation is coming out of APAC. One of them, I'm going to say this wrong, but Pinduoduo is a marketplace that connects farmers to consumers in China, and that's a necessity during the pandemic. We had to, you know, how do I buy things? How do farmers distribute if supermarkets and the normal distribution channels aren't available. So real innovation has come out of it, and a lot of it— what they all have in common is they're all tech-enabled. They've all really accelerated their tech. They're all supporting— they're supported across omnichannel. They're very much mobile-first in their thinking, and I'll come back to that in a second. And the one that always surprises me lots is— my goodness, sorry about this— is TikTok. And it surprised me, one, their numbers are incredible, their growth is incredible, but also how they divide the generations. 59% of 18 to 34-year-olds see it as a positive thing. 31% of 45 to 64-year-olds are skeptical about TikTok and its use. And if I think about my teenage daughter, she lives by it. And what always surprises me about TikTok is One, it's all UGC, it's all user-generated content, and she absorbs it all. And the second thing is it's small bite-sized pieces. So in a really— and it's all mobile. So in a relatively complex world of travel, how do we get across complex things, complex planning in bite-sized chunks? So I think it's a really— that's a generational change in how technology has been used and consumed. And one thing I think would be quite interesting if we pick up on the panel about the generational divide. So as much as possible, how do you get customer-led omnichannel experiences? How do you have clear and consistent across whatever channel people come to? In Skyscanner, 74% of our travelers are on mobile, and that was 70% before the pandemic. So even while we're all at home in front of our PCs, we're still using the mobile device more to plan. How is that seamless in travel?

David Gunnarsson:Is it—

Hugh Aitken:can I go seamlessly from my mobile to my desktop, back to my tablet, all of those things. Is the information clear and consistent, presented in a way which is right for me in a mobile environment? And so there's been huge change in that area as well. So that hopefully just sets the scene a little bit. You know, there's been huge disruption in our lives technology-wise, and but how is that translated into, into travel? So I'd like to welcome the panel up on the stage. And first of all, I've got Tamur, who's the SVP of Channel Management and the CCO of Swiss Airlines. We've got Bryan Porter, who's going to join us online, actually. I think he'll appear like an image on the side of the stage in a second. So we'll welcome Bryan as well. We've got David, who's the CEO of Dohop. And finally, we've got Peter, who is the Digital Products Director of Manchester Airport. So if you could all come up on the stage, please.

David Gunnarsson:Thank you.

Hugh Aitken:Hi, Tamur. David, thank you. Hi, Bryan, good to see you. I'm hoping your internet's better than the phone connection from earlier on this morning. So, but we'll, yeah, well, good to see you. So, Tamur, I know you've had an interesting journey here. We got a message about 11 o'clock last night saying your flight had been cancelled and you've, yeah, you've just made it. So thank you, I really appreciate that.

Tamur Goudarzi:Yeah, unfortunately I cannot blame it on anybody else. It was the Lufthansa flight that was cancelled last Evening, and it was a problem that I think our industry is facing now all over. Already for Easter, and I think also for the summer, there were not enough people there at the airport, not from us, but from our partners from the ground services. So we had to cancel flights. So I cannot blame it on anything else than the industry ourselves. Luckily, I got a flight this morning, and then I was online already in our flight. I was happy to use the online without any problems.

David Gunnarsson:Yeah.

Tamur Goudarzi:And I had a taxi ride now, a race to this event, so It was quite an event.

Hugh Aitken:No worries. We had images of you joining by tablet and you'd be running through the hotel into the room. It would have been incredible. Yeah, yeah, yeah, exactly. And maybe just starting with Tamur yourself, I guess just to kick things on, I'd be interested in what's the biggest digital impact and innovation you've seen in travel, but also maybe in your personal life during the pandemic?

Tamur Goudarzi:Well, I think you all heard about what is changing, accelerating in terms of mobile use, about digital use, all that stuff. What we've just seen on the figures. But if you look at it from a more fundamental side, I think it is really what is changing physically for the customer, what is changing psychologically for the customer, what is changing financially for the customer, and how this actually reverberates then in the digital world.

David Gunnarsson:Yeah.

Tamur Goudarzi:So I wouldn't say it's the one thing, but it's rather that this thing completely changes the way we live and and our customers are behaving. And now we face the challenge that we as an industry, we have been exposed to this for the good and the bad. I think what was good that the teams come together, become very nimble, you can find small groups. There was a kind of centralization to the really important people, and it was great to see how the teams really could move very fast in those world. But at the same time, we were brutally exposed to what we're not doing well. And I think that gave a lot of people also in the boards, all the C-level people also here, quite some food for thought what we need to change very rapidly, very quickly, and with a much different scaling for this industry. So I think I wouldn't put it to one thing, but rather to this enormous challenge now that we are facing.

Hugh Aitken:Of all of them, what do you think is the biggest challenge? Lufthansa is facing.

Tamur Goudarzi:If you talk about the very big— a lot of things are talked about what the customer experience is, what I also mentioned now. But when you combine this new world with our 60 years legacy world, pre-internet from the '60s when it was invented in the backbone of our industry, yeah, and I think that's often not understood yet fully what it means not just to have a platform there, but But to have the backbone also reformed, I think what Johnny showed is one of the avenues there in the B2B world. But it is such a big challenge that it cannot be done by anybody alone. It has to be an industry effort. Maybe we can discuss that later.

Hugh Aitken:Oh, we'll definitely come back to that. Thank you. And personally, is there anything you've seen— what has been the biggest personal digital thing that you've— during the pandemic that's changed for you?

Tamur Goudarzi:For me myself, well, not that much change actually. I think I was already before quite mobile working and in the car, in the plane, and using all those gadgets and whatever. But for me personally, actually, funnily enough, there was not too much change, but a lot of people around me had changed. And I think seeing them being affected and how they reacted was also, of course, affecting me. It starts with the family, obviously, and I think that That is something which we'll talk in 50 years about, right? Yeah, those pandemic days. Yeah.

Hugh Aitken:Yeah, absolutely. Bryan, maybe jumping online, actually, I guess same question to yourself. What have you seen as the kind of biggest digital impact on innovation business and also personally as well?

Bryan Porter:I think, Hugh, from an impact perspective, I think what we've done is we've seen several years of e-commerce growth effectively squeezed into a 2-year period, right? So for us, I think that means there's been a fundamental shift in what customer expectations are across the buying journey. I think from an Accelya perspective, we've really seen 3 key innovations, right? The first one was really in the area of revenue management.

David Gunnarsson:Hmm.

Hugh Aitken:Bryan, we're not hearing you, so we'll give it a second. Try again. Nope, not yet. This is one of these innovations that almost always works. Not yet, sorry, Bryan. Tell you what, we'll come back to you if you— give you a couple minutes. David.

Peter Atkinson:Thank you.

David Gunnarsson:Yes.

Hugh Aitken:What do you think?

David Gunnarsson:Well, I think there's been a seismic sort of shift in the industry, and the industry has had to be super reactive. So looking across the landscape of sort of digital innovation over these past couple of years, it's thin, right? I mean, there's not been that much, but I think the major shift is, of course, that people figured out that in many cases you can conduct business over the internet, over Zoom or Teams or whatever. Companies accepted that, and, and that— but that what that does, it is that it creates, you know, it doesn't kind of— it doesn't remove the need to travel even for business, and it may even increase the need to travel for, for leisure, or the want to travel for leisure, and the ability. Because you can— when you can work from anywhere, Mm-hmm. when you can work for anyone, essentially, if you're, if you're in an office-type environment— I appreciate that not all jobs are like that— But I think that's the lasting shift. That's not an innovation really, it was there.

Hugh Aitken:Yeah.

David Gunnarsson:But it was the sort of massive adoption of that going from what I think were, you know, 10 million users on kind of online calls pre-COVID to 4 months into it, 300 million or something.

Bryan Porter:Yeah.

David Gunnarsson:So I think that's the lasting shift, but it creates a more global world that is not less global because people are They're able to locate themselves anywhere and they're able to sort of be much more mobile, be much more, you know, working from home or working from anywhere and for anyone, which I think just creates opportunities.

Hugh Aitken:Yeah, absolutely. And Dohop is, you know, you've got an interesting journey as Dohop, B2C, you're now a B2B marketplace. You're doing really interesting stuff to connect quite unrelated itineraries in some case, and you're doing multimodal and stuff. And, you know, what's that journey been in the pandemic and how you've seen industry respond to what you're thinking about and what you're working on?

David Gunnarsson:I mean, the pandemic was, of course, we're kind of, we're almost like an airline without aircraft. So we, because we connect, you know, multiple airlines and multi, you know, intermodal as well. The only problem was that, you know, going into the pandemic, our business model is such that we make money from transactions, right? So when an airline makes a booking, we make money. through our systems, and that kind of evaporated as it did for everyone else. So that was a challenge. But while that happened on kind of the business side, on the sort of business development or the sales side, we— it was an accelerator. COVID was an accelerator for us because we had all of a sudden airlines that we've been talking to for years, and that was kind of what Bryan had started saying, you know, things were squeezed into a much shorter period. All of a sudden everybody was like excited about that because they maybe they had a little bit of time to think about these things they had, and they could see it as an opportunity to build their business once COVID was kind of behind us.

Hugh Aitken:Yeah.

David Gunnarsson:You know, and I think that's the thing with an airline, right? I mean, either you build a network or you borrow it, and we facilitate the borrowing part. And I think in many cases, I mean, we just— there was an announcement this morning. We announced a partnership between Jetstar and IndiGo in India. I mean, that's a partnership that's not really existed before and is facilitated by us and kind of really helps both airlines achieve whatever they want without, you know, Jetstar having to build a network in India or vice versa.

Hugh Aitken:Yeah, you said that to me a couple of weeks ago when we were speaking that, yeah, airlines moving from build-to-borrow networks, and I thought it was a really interesting phrase actually that, you know, yeah, and do you see that, you know, Tamur, do you see that airlines will start to look very innovatively in who they're working with and, you know, the network approach they have versus the traditional world of, right, we'll build our network and build bases and etc.?

Tamur Goudarzi:Yeah, I think, I mean, of course here we see the Dohop trailblazer in the industry to find new ways and actually mitigate what we're not doing very well right now. Because interlining, I mean, the word itself is already something which is part of the history, hopefully only. So we have to find new ways of Really, and that is based on non-PNR, ticket ticketless, non-new ways of connecting. And there is a new initiative also. It's not actually that new, it's about 15 years old, but there was another initiative that has been reinvigorated now by IATA, and we are very active there with a couple of other airlines now together that we, we believe that was one of the first use cases that we have to get actually live to have a new form of, call it interlining, or how we speak with other suppliers, how we speak with parking lots, how we speak with the car rental companies, how we speak with anybody. There will be new tech companies that will facilitate that hopefully and help us on the way. You cannot do it all alone. But this is the big elephant in the room. What, what can be there maybe as a first joint MVP? And that would mean that we would have to march along together To decide on this together, and that we don't have a similar situation like we had with some other innovations, like with NDC, where it was whoever can run fastest first will run hopefully and reach the goal at some point. But in the end, we ended up uncoordinated, and this needs to be different. And I think interlining is probably one of the best examples where anyway you rely on the other side. Yeah, and you need to find a common way. So why don't— have an industry approach there and, and in a reasonable time frame get an MVP live which can be used between airlines but also between other providers, suppliers, to connect ancillaries with airlines and connect all that we would like to connect in the, in the fancy new world.

Hugh Aitken:Okay, we'll definitely come back to One Order and NDC World. And from an airport perspective, Peter, kind of what have you seen, you know, from travel perspective as the biggest thing during the pandemic?

Peter Atkinson:Yeah, so I mean, just to echo the sentiment that everybody else has kind of, you know, mentioned and previous speakers today, it's— and we had the question up earlier of, you know, how mature do we think the travel industry is in terms of digital innovation? I think what's happened here is it's really accelerated that need. It's really accelerated that realization of how far behind travel actually is. Now I come from a pure-play e-commerce world. I come from digital retail. And when you step into this travel industry or aviation, you're like, okay, there is work to be done. I think where we've gone to now with airports and aviation in general, airlines and that whole kind of ecosystem coming together, we're now at the very first step, the first 2 steps. And that's been the acceleration that we've seen the past 2 years.

Hugh Aitken:Mm-hmm.

Peter Atkinson:I don't think we're anywhere near realizing or even understanding what the potential of that is. through digital, but I think we've lit the fuse, if you like, at this point now.

Hugh Aitken:Yeah, yeah, absolutely. And we were talking just before the panel about what the focus is of Manchester Airports Group, and you were talking about MAGI becoming MAGI something else. Talk to us about that maybe.

Peter Atkinson:Yeah, I joined MAGI as— I joined the product team in the digital division, which was MAGO. Some may or may not have heard of MAGO, MAG Online or Mago omnichannel, depending on who you speak to. So we had a bit of time during the pandemic to assess what our business was as a digital division of an airport. We looked at our proposition, kind of what are other airports going to need as the recovery starts to kick in? What's the wider industry gonna need? The culmination of that is Mago and MagUSA are division in the United States recently merged. Actually, Tuesday was our official launch. The launch party was last night. So unfortunately I missed it because if I went to that, I wouldn't be here. So yeah, we've now realized that actually the future of airport e-commerce specifically, but the wider industry e-commerce is we need to bring products together. We need to consolidate into a single marketplace, a single point of collation for these products. You know, you've just seen the previous conversation, Dohop are doing similar in that way. Till we get to the point of the Amazon single basket, right? Any product can put— any customer can put any product in their journey at any point, whether it's pre or post-purchase. So our problem really came from, right, we want to implement these things. We own 3 airports, right? We have to do it 3 times. Then we started to look at, well, if we're doing it 3 times, what's everyone else doing?

Tamur Goudarzi:Mm-hmm.

Peter Atkinson:We started to talk to people and go, well, we don't either have the tech team, the capacity, or the function to build this e-commerce ecosystem. We do. So that's kind of where we've pivoted, and we actually launched Kavu on Tuesday, so our new digital product marketplace.

Hugh Aitken:Excellent. I look forward to hearing more of that. Yeah, a reminder, if you haven't already, go into Slido, CAPA Summit, and answer the question. We'll come on to it in a minute. We're going to try Bryan. He's looking. Um, Bryan, can you hear us? I can hear you. Excellent, we can hear you. Yeah, yeah, sorry, Bryan, we got— you were talking a bit about kind of transformation and what you've seen, but please just carry on.

Bryan Porter:Yeah, I mean, I think over the course of the conference, I think there have been a lot of macro trends that have been identified, but I think for me, you know, really what I wanted to do was kind of zone in on 3 key innovations that we've seen in Accelya. So the first one for us during the pandemic was the area of revenue management. I think as an organization we saw overnight that forecasting based on historical trend data just didn't work anymore. So our team on the, on the ALRM side were effectively driven to innovate, building out the capabilities from a business rules perspective and also utilizing new datasets. So we started pulling in IR-to-market trends, we incorporated look-to-book data, and we also built out our competitive fare match solution. So what that did was effectively gave us an alternative to utilizing historical trend data. And I think all in all, during the course of '21, we, we had 12 product releases. We introduced about 220 new features. And really what this did was utilized a broader range of data and really put more control into the hands of the revenue management team, giving them new visualization solutions in terms of how they would effectively be able to still sustain the revenue management practice in a changing world. The other aspect that I want to talk about was really what we did on the merchandising side. So those customers of ours that were utilizing our FareLogix merchandising solutions were very quick to innovate around the capabilities that we provide in terms of ancillaries and bundles. So we saw the introduction of dynamic seat maps, that effectively allowed customers to book the middle seat. We saw the introduction and the bundling of fit-to-fly and medical insurance solutions. But really, I think that this speaks to a broader trend within the market that I think is here to stay, where we're moving conceptually from just selling a seat to taking a look at what customer need we need to satisfy. And then from an MDC perspective, We've got a large number of leader airlines that are well on their way through their transformation journey. But during COVID what we actually saw was a doubling down in terms of seller onboarding, to the extent that in the first quarter of this year, we've actually seen NDC volumes from our customers surpass 2019 levels. So, you know, I think that that really reinforces the importance of NDC moving forward. I think from a personal perspective, I think that the one thing that I haven't enjoyed is teams. I think that, you know, for me, you know, I've got a family that's distributed around the world. You know, I live in Ireland, I've got a head office in the UK, and I've got a broad range of customers across the planet. So life's been particularly hard over the past 2 years, but, you know, it's been really interesting, you know, getting back in the air again over the past 2, 3 months. And, you know, I found that I've lost all my travel fitness. Just in terms of, you know, I used to have a bag fully packed and ready to go, you know, being able to hop in a cab and get to the airport. I knew exactly how long it would take. I'm having to relearn all of those skills again.

Hugh Aitken:Yeah, yeah, no, I think we can all sympathize with that. Absolutely. And thanks, Bryan. The other thing that's interesting about yourselves, Bryan, is, you know, you bridge the passenger and the cargo world, and we don't talk much about cargo. It's kind of the, you know, the bit off to the side with airlines, but it's the bit that's probably, you know, driving a lot of the underlying profit and helping make up some of the passenger losses. Kind of how have you seen transformation? Because it strikes me that there's a lot of disruption in the cargo space. There's people coming in, in the marketplace and, you know, innovating and digitalizing a lot of what was very manual processes.

Bryan Porter:Yeah, I mean, we've seen, we've seen massive growth there, Hugh. I mean, the— I think the supply chain disruption that we saw over the COVID period has resulted in a boom for air freight. You know, and I think we've also seen predominantly passenger carriers actually shifting focus and remodeling their fleet as cargo carriers. So I think there's been a huge organizational innovation in airlines, and I think that, you know, it's been lucky for us because, you know, having the cargo side of the business has meant that there's a certain amount of resilience that's built into our overall activity. But I mean, the solutions that we provide at Accelya really focus on helping airlines maximise revenue, optimise their operations, and also to account accurately. And in terms of the solutions that we partner to provide, what we've seen over the past 2 years are very similar patterns in terms of demand for innovation. So taking a look at how we change the models of distribution as new marketplaces emerge for cargo, how we take a look at bundling offers, building in ancillary services, and even building out the capabilities of dynamic pricing. I think that Tamur touched on the point of one order earlier. I think that we're seeing the importance of this within the cargo side as well, as airlines are effectively looking for a holistic interactive approach in terms of how they effectively persist the orders through their systems and actually take that all the way through to order accounting.

Hugh Aitken:Yeah, absolutely. The one order thing, Tamur, we spoke a lot about NDC and that world before the pandemic. You were talking about, Bryan, you mentioned about, you know, you've seen NDC back to 2019 levels. How's it been? How's that journey for Lufthansa now and just what you're seeing going on there? And then maybe yourself as well. How does it feature within the Dohop world, NDC?

Tamur Goudarzi:Yeah, I think we talk about one order and it's connected to NDC and the NDC story is of course not finished.

Hugh Aitken:No.

Tamur Goudarzi:And thanks to trailblazers like at that time, yeah, it was Fairlogix, now Accelya. You know, we could start fairly early on with a lot of, I would say, also headwinds.

Hugh Aitken:Mm-hmm.

Tamur Goudarzi:And now I can say we are on 3 out of 4 tickets we sell, we are on a digital sales channel. That means either on our own sales or with NDC, and our doubling down also in the crisis on NDC clearly paid off. And I think the big remaining block is the one that Johnny was mentioning before, is to get now the more intricate corporate value chain also on NDC, because that's still missing. Most of the growth came from the leisure side. This, I think, has been mastered. There's still topics to be done there as well, but the big, big topic that remains is the corporate NDC side.

Peter Atkinson:Yeah.

Tamur Goudarzi:So that, that is absolutely important that we do not stop there and we get the right actors and stakeholders together on this one to also get here penetration as soon as possible. I think also the GDSs have changed course there. Technically, they're not yet there on that side for the corporate side. So that, that's why we need, of course, everybody who is a tech provider who can deliver this end-to-end. And there are some new players coming. Disruption is happening. One was just shown with the example of Spotnana.

David Gunnarsson:Absolutely.

Tamur Goudarzi:We will launch in 4 weeks' time a new co-branded platform with trip actions where you will have everything as a customer. duty of care, from expense management, from selection of all flights, not only Lufthansa Group flights. You will have all the hotels and everything with less than 6 minutes. You will have a call center in, in less than 60 seconds answering time. All that you will have in one platform for the SMEs, for the small and medium-sized companies. In 4 weeks' time, we launch it, and that will also, I think, change things because this disruption is needed in order to accelerate this storyline.

Hugh Aitken:Yeah, absolutely. And yourselves, David, NDC, does it feature majorly in the work that you do or how do you see it?

David Gunnarsson:Absolutely. I mean, we work directly with airlines, so we have about 60 airlines in our portfolio and it's all about kind of supporting their direct channel. So if they have some sort of NDC capability, that's the best way to work. But what I would say is that it's still, I mean, it still feels like early days, right? It's the same wherever you look. It's always the same kind of usual suspects who have that capability in terms of airlines, right?

Tamur Goudarzi:Yeah.

David Gunnarsson:And even then, it may not be their full selection of fares, maybe not all ancillaries, all of these things. So it's still quite early. And I mean, even if you look at, you know, looking across kind of the tech landscape, you have companies like Duffel who have, who kind of came up and said, we're gonna aggregate NDC, but then they figured out that it's like 35 airlines.

Hugh Aitken:Yeah.

David Gunnarsson:And now they've added kind of travel port content for another 200 because that's, that's what you got, right? So it's still, I mean, we have like 60 or 70 airlines within sort of our ecosystem and we connect to them by any means possible. It's nice if it's NDC, but also NDC has all kinds of versions and flavors and so it's not, it's not so straightforward. But I think it, I think there's a future there, especially related to what you mentioned earlier with one order. And yeah, and that's kind of the next step for, at least from our perspective, is, you know, what we do today in terms of kind of virtual interline, and that's a niche market really. I mean, it's maybe 100 million passengers a year or something, but taking that into how do we— how do airlines cooperate in an NDC kind of one-order world? How is that orchestrated? How is that facilitated? I think that's the That's the interesting bit. That's the real market.

Hugh Aitken:Yeah, absolutely. I guess, is that— is that the role that IATA should play bringing it together? And do you see that happening? And kind of, is that your experience that they're filling that need for you, or is there still something maybe holding back?

Tamur Goudarzi:Yeah, I think it's very important. As I mentioned at the beginning, that I think this needs to be a concerted action. And now we're discussing intensively in IATA with key global airlines, do we form more than just a standard definition Do we form something like a consortium, something like that? It's not exclusive for others, but it's rather helping others also to jump on board later and to bring the right tech providers and stakeholders on board. It's not an exclusive club, but something where we— this time, I think we need to get it right, and we won't have that many opportunities again. Yeah, because otherwise the world around us is superseding and changing our world without our consent, maybe. So that's why there is this initiative, and I think it's a good umbrella because it gives an even level playing field, and it should define standards, but maybe also methodology. Maybe also it goes further into actually solutions definitions, open-source questions, and then we can see if that's something that we can apply commonly because it's a common good. It's not something where necessarily you have a USP as an airline, but it's something we all need, and I think we have to cater for that now. That would be a first time, quite frankly, in this industry in the last 30 years that this would happen. So it's far from now secured, but doing it under the IATA umbrella, I think, is really helping and also bringing all the stakeholders on board together with IATA.

Hugh Aitken:Yeah, yeah, yeah. Okay, cool. I'm going to flip on to the question. If we could unveil what I can— I will be incredibly surprised if it goes a different way than I thought this answer might go. We'll see what the audience is thinking. Are we ahead or falling behind? Do we have the scores? Yeah, slightly lagging consumer needs. There you go. And fairly conclusive. There's a— there's 3% of people think we're ahead of them, which is the optimistic end of the audience. So yeah, yeah, but, but, you know, it's certainly yeah, pretty conclusive that we're falling behind. And I guess that probably mirrors Ed's, and there's no surprise. Thank you for confirming what I've always thought. If it'd been the other way, I'd have been slightly worried. Why is that? You know, there was lots of talk yesterday, and one of the— I was reflecting with a few people last night that a lot of this conversation yesterday was, geez, we're still talking about the same thing. We're still talking about IATA role in NDC. Forgot, what does it take? What will it take for us to really accelerate and technology and get ahead of what the consumer needs are. You know, Peter, you kind of— yeah, what do you think of that and what do you think is holding us back?

Peter Atkinson:So it's a word that's been used 4 or 5 times already this morning, but the transformation in digital transformation happens within the organization, right? It's not at feature level. It's not we're going to build these things, people will come and we'll celebrate it all, right? It's a cultural shift. It's a cultural shift in the organization that's executing it. It comes from the very top. It's a cultural shift in the, in the wider industry working together, thinking about things a little bit differently. You brought up 10 organizations on the screen before. Even the bricks-and-mortar ones in those examples are now starting to think differently, right? So if we take organizations that have done this exceptionally well, and I've mentioned their name already, but Amazon sit at the top of this tree. They're the shining light that everyone aspires to be, to in some way, shape, or form. They don't run their business in isolated pockets of projects, and they don't say, you know, we dial up, we dial down. We'll have a project that has a start date and an end date, and it has KPIs that determine whether it's a success or not. They now— and they really pioneered this approach— they've looked at their end-to-end value chain, they've wrapped it around the concept of the customer, the consumer, and they've now started to break that apart and go, right, well, we can productize this.

Hugh Aitken:Yeah.

Peter Atkinson:We can productize this next part. What that then allows us to do is it allows us to align those products into the business goals, the business, fully embed them into the organization. But they're not dial up, dial down. It's continuous improvement. It's incremental improvement. And it's not big bang, 4 million created. There we go. At the end of the year, it's at the end of the year we've achieved this. Now next year, from our learnings, from our experience, we're going to carry it forward.

Hugh Aitken:Yeah. So this feels a bit— there's a leadership Point there. And digitalization comes from a leader who believes and drives it through the org. And also just the culture of— it's an interesting one because coming from a tech company and also an airline prior to that, there's a, you know, experimentation, fail-forward culture in tech, which is— which you don't have in aviation for very, very good reasons, obviously. But, you know, it's almost a different mindset and it's how do the two come together?

Peter Atkinson:Yeah, I mean, we can measure fail-forward. We do want to fail as quickly as possible, learn from it, and actually correct that, right? Fail-forward isn't Fail quick isn't necessarily a bad thing. It's, you know, we're not investing massive amounts of CapEx or OpEx going, this is what we're going to do, aren't we great? Oh no, we got it wrong. It's, you know, this is what we think we can achieve, how do we incrementally do that before we go, right, now let's sign the check and get it going?

Hugh Aitken:Yeah, absolutely. And Bryan, yourself, I guess no surprises with the result, but I guess what do you think is holding us back?

Bryan Porter:Well, I mean, I think it's probably a bit lazy for us to actually just point to finger at what we collectively call legacy constraints. But, you know, I think it's something that we're all aware of. I think Peter hit the nail on the head. This is more than just a series of software implementations. This is all about business transformation. And I think that, you know, what we're seeing in terms of some of the new standards and technologies that are emerging, especially being driven by the likes of the One Order Initiative, we're effectively reimagining, you know, how we how we approach our solutions to the business, not necessarily just from an operational excellence perspective, but also from a passenger perspective. And essentially, we categorizing the passenger as a customer and putting the customer at the heart of everything we do. And I think that, you know, if we take that forward to the ultimate end state that we're building for, you know, I think from our perspective, we're definitely working with our partners to engineer a more modular, cloud-native platform where really offer and order management allows dynamic merchandising across all channels, direct and indirect, and also putting the customer at the heart. So the order effectively becomes a single source of truth through the order management system that really allows the airline to interact effectively with the customer across all touchpoints. And ultimately to, to make sure that order remains in sync with the customer's expectations all the way through from offer to order to fulfillment and settlement.

Hugh Aitken:So it sounds like you've got a lot of the solutions, but kind of why aren't we making that big leap? Why aren't— why don't we use the pandemic to get travel ahead of the curve?

Bryan Porter:I think for, for a lot of what we're trying to do, we're trying to remove friction in terms of how we're actually integrating with the customer. But these are big shifts. This is a shift in terms of solutions, in terms of the systems that we have, in terms of powering how we interact with the customer. It also shifts in terms of how we're structured as an organization and how the organization is structured to work with the customer. And then to Tamur's point, it's also about a shift in terms of how we're effectively set up as an industry and how we work together and how we work together Yeah, yeah, a fair point.

Hugh Aitken:Yeah. David, no surprises with it, kind of. What's your perspective? What's holding us back?

David Gunnarsson:Well, I, I think you hit the nail on the head earlier. I mean, it's, it's really the sort of inherent, um, sort of the cautious mindset of, of— if you look at airlines, right? I mean, super cautious and, and, and kind of concerted in how they move forward, and that's And with good reason. I mean, I think the challenge is kind of separating that mindset on the operation side, that where you have to be cautious and careful and, you know, there's no failing forward there, obviously, and separate that away from whatever they're doing on the sort of e-commerce side or the retail side.

Peter Atkinson:Yeah.

David Gunnarsson:But that's a challenge. I mean, we work with airlines, well, all the time, and it is always getting them to have one sort of approach and methodology for an e-commerce project rather than something that's on the operations side. I mean, that's just, that's very hard.

Hugh Aitken:Yeah, yeah, absolutely. So Tamur, cautious Tamur we'll call you for the rest of the panel. What do you think from an airline perspective? You know, it feels like there's a culture, there's a, you know, it's almost an ingrained culture. What's your perspective on kind of falling behind?

Tamur Goudarzi:Actually, I'm not that cautious.

Hugh Aitken:No, I know you're not.

Tamur Goudarzi:Yeah. Super optimistic on this because I believe It's, it's the right time to do it now because everybody, I think, has understood and heard the whistle. So yeah, I mean, I think from a company— on the company level, we described it— there's mostly incremental change needed, marrying metal with digital in every aspect of the DNA of that company, particularly in the airlines.

David Gunnarsson:Okay.

Tamur Goudarzi:Big change management needed. So you need a leadership that understands this value chain from inspiration, from consideration search, placement, aggregation, payment, fulfillment, the whole value chain of modern air retailing, and seeing where I do incremental change and where they will do disruptive change. To understand who are the players there, what is the power politics behind it, what are the oligopolies and legacy stakeholders that you need to engage, which are the— how do you enter, bring in all the new ones, the startups? And then when you have understood that, I think from a management perspective, then the question how You bind this together in a, in a broader industry perspective. I mentioned this before. I think this is absolutely adamant. But on all these 3 levels, I think you need to bring it together to a coherent strategy.

Hugh Aitken:Yeah, it's interesting. I was watching an interview, I think Peter, you did with Alex Cruz last autumn, and he was saying there's 2 big things. One, we're still on old hardware and software. To your point earlier, you know, we're still in 50, 60-year-old backend systems and Until we somehow manage to dehinge ourselves from those, that's holding us back. But it's also just actually keeping up with changing consumer expectations and needs. And that is, you know, as we've said during this, that's accelerated away. And actually keeping up with what the consumer is thinking and wanting and having that external perspective is as much, you know, and then internalizing that is also a challenge, I guess. Yeah. Okay, we've got a few more minutes left. I wanted to see if there's any questions from the audience.

David Gunnarsson:Yeah.

Hugh Aitken:Put your hand up, please. Oh, Azim's got two hands up. He's just stretching. Late night last night, Azim.

Peter Atkinson:Yeah.

Hugh Aitken:Are there any questions from the audience? No pressure. That's no problem at all. I guess, yeah, we've you know if we were to look at one thing, what would you you know what would be the one thing you think is holding us back? I guess you know Peter is probably a bit of culture. There's something there in leadership. Would that be fair if you were to One thing is holding us back?

Peter Atkinson:Yeah, I'd say that a generic kind of, you know, a whitewash level across the industry, I think there's, there's a change of mindset that needs to come about. I think, you know, we've gone through that probably in the last 10 years with banks, and they're now, you know, the legacy banks are now catching up with the startup banks, and we're now seeing that transition. I think travel aviation specifically is probably the next one to go through that, and I think the last 2 years have have started. We're at the start line. Someone's fired the gun and we're going. Where it goes, we don't know. But I think that cultural aspect will change over the next couple of years, predominantly because, you know, the next 5 years millennials will become the biggest spending group on the planet. Millennials are digital natives, right? They're going to start to turn 40. They're going to, they're going to have more, more disposable income. They're going to start to overtake the others. But it's actually the generation behind. They're the ones that are going to want to transact on things on platforms like TikTok. They just demand differently, and we're not really ready for what they want in the next 10 to 15 years.

Hugh Aitken:Yeah, it's tough when you're relying on 50 or 60-year-old backend platforms. So yeah, yeah. Bryan, what about yourself? What do you think, you know, what's really— if there was one thing that's holding us back, what would that be, and how do we kind of work through it?

Bryan Porter:Well, Hugh, I mean, I think that probably the biggest thing for airlines is take that excellence in practice that they have in terms of building sort of those operational efficiencies that have really made the industry so successful over the last couple of decades, you know, and now taking a look at, right, so how do we build our view of the customer and our desire to ultimately satisfy the customer needs into the heart of everything that we do, you know, and to effectively make that a part of, you know, how the airline operates. I think for me, that's the, that's the way that the airline ultimately starts reimagining itself as a retailer.

Hugh Aitken:Yeah, absolutely. And so just got under a minute left. 2 quickfire questions for each of you. First one, 5 years from now, where will we be? Tamur, 5 years from now, where will we be? What will we be talking about?

Tamur Goudarzi:Yeah, I think we will have a We have a multipolar world, I think, still in the airline industry, with probably more concentration on the regions where some players in each region will probably control the business there from a pure airline world. But you will have, I think, a kaleidoscope of various retailing stakeholders that are playing a part in the chain. At the moment, it's a bit like Pac-Man. Everybody tries to swallow somebody else. So how much is going to be consolidated. We will see because there are new players coming. So I think we will see really some players that are really becoming much bigger. Just learned that TripActions approaching a $10 billion valuation. A small startup didn't have more than 50 people in 2017. So these, these are really changing times. And, and from a customer perspective, I think we will have caught up with a lot of, a lot of the deficiencies that we have that greatly experienced also in the pandemic times. So I'm quite hopeful that By then we will have actually some form of an order, new order system already in place in 5 years. That's actually ambitious, and I think that would be the great big next thing. I believe NEC penetration for the leading carriers will be very, very large, but there will be a lot of carriers who won't have much of NEC then still. So we also need to cater for those and see what would be the format that they also participate in the modern distribution world. So there will be multiple speeds for the airlines, I think. And but more consolidation, I think, in the airline world, but also more consolidation, I mean, in terms of at least of alliances and geographic groupings, and more consolidation for sure in the airline retail stakeholder world ecosystem.

Hugh Aitken:Yeah, cool. David, 5 years from now?

David Gunnarsson:5 years is a bit tricky because, you know, we tend to sort of overestimate what we can do in the next 12 months and then underestimate what we can do in 10 years, but I mean, 5 years, we as a company will still be here talking about how we can facilitate and enable connections, not just, you know, airline to airline, but across any scheduled mode of transport. That's where we're going.

Hugh Aitken:Yeah, absolutely. Peter, views?

Peter Atkinson:Along the lines of what Tamur said, I think in 5 years' time we will have consolidation of products. I think we'll have single inventory pots, and I think we'll get to a place where we have more channels and more accessibility to products. Collections of products at the same time than we've ever had before.

David Gunnarsson:Cool.

Hugh Aitken:And Bryan, finish with yourself.

Bryan Porter:5 years from now, in the next 5 years, what I, what I'd hope, Hugh, is that we would, we would see that slider question that you asked having a very different answer. You know, basically see the industry leading once again. At least that would be my wish. And I think that we would see that powered by the adoption of new generation automation I think beyond that, you know, in terms of MDC, you know, we're starting to see levels of maturity now in terms of adoption, but I think that the real test is actually seeing MDC becoming dominant within the TMCs and corporates, which I believe we'll see within the next 5 years.

Hugh Aitken:Yeah, thank you. Final, final question, we're well over time. Who should we be watching? Which brands can travel anywhere, any brand that you look Which is the one we should be watching and traveling and learning from? Bryan, let's start with yourself.

Bryan Porter:Well, I think that right now I'm quite intrigued by AirAsia. You know, I like, I like the idea of a super app opportunity emerging in Europe and the Americas, so that's what I'll be watching.

Hugh Aitken:Okay, thank you.

David Gunnarsson:Peter?

Peter Atkinson:I'm gonna go with anyone that's saying that they're gonna build a super app. I think Uber announced it recently. I think, you know, we just had AirAsia there. I think that they're the ones to watch.

Hugh Aitken:Okay, David.

David Gunnarsson:The, the new entrants. We had a panel here earlier this morning, new airline entrants. I mean, that's always the most exciting to me, people who, who wake up one day and want to start an airline and, and do it differently. I mean, that's exciting.

Hugh Aitken:That is exciting. Yeah, final shares, who should we be watching, Tamur?

Tamur Goudarzi:I wouldn't mention any particular brand, but seeing what's happening, I think what would be really exciting is there are new players who would maybe merge industries. So let's take what we see already beginning, fintech with travel or health with travel, and what does it mean then for, you know, satisfying customer experience with all senses? Yeah, so along the journey, so will there be some new player like bringing up some, some mix of those benefits or assets that those industries can bring from both sides? That would be fascinating to see, but I don't know if that's going to happen. Yeah.

Hugh Aitken:Yeah, and it'll be interesting. And Jonny had some brilliant perspectives before this as well with different industry and different businesses as well. So listen, thank you very much for everybody for listening, and thank you to our panel, David, Peter, Tamur, and Bryan as well. Thank you for joining by video, Bryan, and thank you for keeping the sign working. Thank you very much, everybody.

David Gunnarsson:Thank you.

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