Technology Rundown – How changing technology landscapes are shifting airlines’ operations and strategies

Transcript

Christine Boynton:I'm Christine Boynton, senior editor for air transport at Aviation Week, and thrilled to introduce our real expert panel today. A lot of incredible experience up here on the stage. We have Jitendra Sindhwani, IBS Software president and chief revenue officer. Stephen Schwartz, regional sales director for the Americas at CAE Flight Operations Solutions. Dee Waddell, IBM Global Head of Consumer Travel and Transportation Industries. Claudio Buncamper, Chief Commercial Officer at Sunrise Airways. And Charles McKee, Chief Commercial Officer at Bermuda Air and former Head of Airline Solutions at Sabre. So thank you all for being here today. As we know, aviation is a technology-enabled business, and changes to the landscape now are really evolving how airlines conduct operations, sell seats, and manage disruptions. So today, our panel of suppliers, experts, and airlines are here to explore how technology can make aviation safer, more predictable, and improve the passenger experience. So we're gonna start with a pretty broad question before we start to drill down, but really, I'm gonna ask each of you operationally, what are those technologies being sought by airlines now that are really making an impact. And some of the sort of key phrases that I hear today are things like dynamic pricing, offer personalization, cybersecurity, and data protection. I mean, again, this is not a small topic we're talking about today. So Dee, I'm gonna actually start with you. And it's fun to have IBM here because of course IBM is responsible for developing the first centralized computerized airline reservation system. which revolutionized air travel. And that all came to be, fun story, when an IBM salesman sat down on an American Airlines plane next to C.R. Smith, right?

Dee Waddell:Blair Smith.

Christine Boynton:They bonded over a shared surname, and they started talking about challenges, and the rest is history. So that was then. Where are we today, and what technology is poised to evolve the business now? And what are you doing on those?

Dee Waddell:Sure, sure. Well, I know Charles and I were talking about a former Sabre, and it's a wonderful history with IBM. I mean, even today, about 80% of all the reservations for airlines, as well as hospitality and others, are running through mainframes. You know, mainframes, one of the things that I would say, and I'm not trying to oversell the mainframe, but roughly about 68% of all compute still runs through mainframes today. And the cost is about 6% of all IT. And our mainframe business is a continued, you know, 6%, 7% CAGR year over year, and it's a wonderful system that continues with new technology. And if you haven't explored it, it's an interesting piece. But I would say from an airline perspective, you know, it's not about the past. And it's wonderful to be able to stand on the shoulders of great people. I remember Bob Crandall, former CEO at American Airlines coming up to me at the World Travel and Tourism Council conference and just so excited about the partnership that we had over many, many years. And I know some of the clients are here today that we've got a wonderful relationship. We're doing new things as well. But I'd say on the technology is, for this audience, I would think that the transition to order management and orders is going to be big. We'll talk a little bit more about that. Clearly that's one that we need to be thinking about the business case. What are the core capabilities you're going to be getting out of them. We can talk about AI is going to be pervasive, and it already is. We're seeing a lot of it. I can share a few where I see some of the top AI implementations are in airlines around the world, since I get a chance to see that around the world. But those are some of the other ones. But in the operational space, you're seeing a lot of modifications. Mobile still has a lot of penetration to do, and there are other technologies around security, like you mentioned, as well. They're very, very important. Very important.

Christine Boynton:Great, thank you. Jitendra, at IBS, part of your role is focused on helping customers stay ahead. In chatting earlier, one thing that came up is the shift in crew and operations space, upgrading technology that in some cases is 50 years old.

Jitendra Sindhwani:Yeah.

Christine Boynton:So getting back to that original question.

Jitendra Sindhwani:Yeah, definitely. I think if you look at airlines, we've divided into 3 parts, right? You have all the customer-facing activities, which are heavily Driven by the new wave order, etc., everything that, you know, he was talking about. But we see there is a big shift that has to happen in the operations space also. In fact, we are seeing maximum growth outside of that customer space coming in that space now, the operations space, because as I was mentioning yesterday, one of the larger airlines in Europe, the system was built before I was born, and they still use certain codes which— and the languages which nobody understands.

Stephen Schwartz:Yeah.

Jitendra Sindhwani:In fact, the reason for the change is that they have nobody who can actually manage that system.

Stephen Schwartz:Ironic.

Jitendra Sindhwani:I don't think they were looking at the business case. But the need for change in that is very, very high because any cost of disruptions today has a huge impact, not just on your, you know, I mean the cost part, but has a huge impact on the customer experience also. So I think the way today we are looking at technology, you need to look at it in every part of your business today, not just in the customer-facing, but Look at the whole value chain and see where you're going to make a difference. The point of failure is definitely run across the organization, mostly in the operations area today.

Christine Boynton:Thank you. Stephen, early in your career, you helped introduce automation into flight operations and crew technology for over, I believe, 90 airlines. Today at CAE, part of what you do is help break down silos and take a more open approach. Is that right? Can you talk a little bit about that?

Stephen Schwartz:Yeah, well, if we look at just the topics of the conference over the last 2 days, we, we look at how are we going to find markets, where are we going to fly, what aircraft are we going to fly. So years of planning go into what we're about to offer to the customer. The customer shows up at the airport and they're going to run into a lot of problems. There's going to be weather at the airport, the pilot isn't going to show up to fly, the gate isn't going to be available. All of these pieces are going to disrupt what we've planned for the last year or 2 into that operation. So we can do the best plan possible. We can create— I loved Christine's example yesterday. They look for Home Depot customers in other zip codes to find out where do they operate new routes to. So when we get to that, we've done years of planning and we have minutes to solve problems. And that's really where flight operations sits into this. It's kind of the forgotten child of the airline when we talk about all of the planning and all of the operations pieces that we do. How can we get to solving something that we've planned for 2 years in the next 10 minutes? And if we can't solve that, we're going to continue with problems. And the way we do that is by pulling information together. It's easy to say I can swap an aircraft. I have another aircraft. Do I have a crew member that's qualified on that? Are the catering bins that I filled up going to fit on that aircraft? We all have arrived at the airport thinking we were late departure. We got here on time and they told us you don't have a gate. So putting all those pieces together when we solve that disruption is really what It needs to be focused on taking those multiple years of planning and making it something that we can action quickly and efficiently at the airport.

Christine Boynton:Okay, and that must take a mindset shift in some cases.

Stephen Schwartz:It's a very big mindset shift because it has traditionally been done by individual people. I fix the aircraft, then I pass it to my colleague, he fixed the crew, then I pass it to my colleague and she'll fix the catering, and I'll pass it to my colleague at the airport and they'll look for a gate. As any of those fail and it's not done iteratively, Then we wait until it fails, and then we go back to the beginning. Do we have another aircraft? So that ability to really change that mind shift and move that to a central decision point, give them all the information. We hear the tools, you know, machine learning and AI, but then allowing that to not just flood them with data, but help them with solutions.

Christine Boynton:Okay, great. I'm going to move to my airlines now. Claudio, maybe you can start by giving us a little overview of Sunrise, some of the unique challenges perhaps that you're working through now? And we talked earlier about how Sunrise is kind of on the beginning of a technology journey. So if you could give us some information on that.

Claudio Buncamper:Yeah, so Sunrise, you know, we're a Haiti-based airline, and we actually have 3 AOCs, one in the main base in Haiti, one in the Dominican Republic, and one in the Eastern Caribbean that we started a year ago. That AOC is being finalized actually this month. But for us, Sunrise was always like a standalone airline serving O&D markets out of Haiti to Panama, St. Maarten, Guadeloupe, Cuba. We did a lot of flights to Cuba, to the Dominican Republic. But as everyone knows, Haiti has quite some challenges, and last year it really escalated, and in March they had the first incident with shots being fired at aircraft and violence. So we had to move our operation from Port-au-Prince to Cape Haitian, which Cape Haitian logistically was not ready for moving a base of an airline. We were lucky that it took a couple of months and we went back to Port-au-Prince, but unfortunately in November again it escalated and now, you know, as airline we're really looking at, okay, we're gonna move our base Most probably to Cap-Haitien, and from there, of course, with the government, get the airport up to par so we can maintain. But cost-wise, it's extremely expensive. If in Port-au-Prince we were paying like $3 a gallon of fuel, we're now paying $8. You can imagine what this does to our operations. Then also because of that, quite some borders were closed. Cuba was closed for commercial flights out of Haiti.

Jitendra Sindhwani:Right.

Claudio Buncamper:Only charters. The Dominican Republic is still closed. For us, we had to change our complete mindset. From a standalone airline, we decided also, okay, we're now going to go outside, get into the distribution channels and all of that. We started that. Our goal right now is having our 3 AOCs is connecting the entire Caribbean because we have a lot of carriers in the Caribbean, but it's still very difficult to travel from A to B. You know, and we are working and we're not there to say we're going to do it by ourselves. We're, you know, speaking with every airline in the Caribbean. Most of them we have interline agreements with. So for us, the goal is that we can get someone within the Caribbean because, yes, there's a lot of service from north and south coming to the islands, but not— so on a technology point of view, we need to get technology to help us. But For us, it's going to be a slow pace. We cannot do it overnight because not only do we have our— it's a technology part, but our operational part because of the situation takes a lot of time. Yes, AI, we're looking at it, data analytics. These are 2 things that we're really looking at. Our IT department is really seeing where can we get the data. Again, if we take Haiti, how do we handle this data? We know the situation there. overnight it changes. You know, so for us, you know, the technology is extremely important, but it's going to be a slower pace.

Christine Boynton:Okay, thank you. Charles, I'd like to get your perspective on the first question, impactful technologies for airlines. And of course, you've been on the C-suite of several airlines, and so maybe I can get your perspective broadly before you move into talking about Bermuda Air, because I believe there are some interesting AI applications at Bermuda Air. And that will lead us perfectly into our next question.

Charles McKee:Very good. First, I want to say this. Even on the toughest day, I wouldn't want your job, Claudio. I really just— hats off to you, what you're doing in the operating environment, and you're serving the community as you are. So thinking about where we've come from this discussion, we've talked about the need to move from legacy systems, so modernizing technology. We've talked about what's the most efficient way to compute, so mainframe versus cloud, and touched on that. We've also talked a little bit about really from where, where do we go from here in terms of applying some of these new technologies. I think there's kind of a little bit of a cognitive dissonance in the industry today. So much focus is on the need to get off of these systems, legacy systems, moving from passenger service systems, PSSs, to offer order management systems. And these are big, big changes. But— and they pretend to like having good capabilities in retailing, in customer experience, in better operations. So there's a real goal at the end of doing that. Yet at the same time, there's a real aversion to change, to making big migration decisions and changes. And we can see it through history. Right, so we're still on the legacy systems we've been on for many, many decades. So the question really, I think, in my mind is, with the advent of AI, with AI apps that are effectively democratizing how we think about the application of data and the use of data, is there a way that will give us more runway to actually bridge the time from these systems to new, brand new systems? Is there a way that we can use effectively agentic AI systems to actually do goal-oriented tasks that we are— where we could actually achieve some of the things that we're trying to achieve with an offer order management system, yet do it on our legacy systems today. So that's kind of broadly, that's what, that's what I think about when I think about the new technologies. Having said that, I, you know, The ability to deploy very quickly goal-oriented agentic AI has been really, really impressive. You know, at our little Bermuda Air, we're 4 airplanes, we've been in business for 20 months. When I say democratization of AI, it's actually within reach of a small carrier like us.

Jitendra Sindhwani:Mm-hmm.

Charles McKee:We've been doing some work in flight planning using AI-enabled flight planning. Specifically to help us to better understand where the clear air turbulence is and avoid it. But the effect of this is actually, we've actually had fuel efficiencies to the savings of about 3% or so per flight in using this new form of flight planning. So that's one thing that we're doing right now. Just last week, we've also introduced inventory control, which is AI-enabled. So taking the data that conventionally any revenue analyst would look at, But being able to do it much, much faster, looking at more data sources and running scenarios simultaneously, and actually then optimizing how we're doing the inventory control. Moving forward, what I want to do is actually take this and then apply it from a dynamic pricing perspective. So moving into the pricing realm, really understanding people's willingness to pay. Same with ancillaries. There's such an opportunity to use AI-enabled pricing models for ancillary.

Stephen Schwartz:Thank you.

Charles McKee:sales. So that's another area that I think is a real opportunity. Down the road, I think the loyalty optimization is also very much ready for AI enablement. And we've all woken up one day and said, oh hell, my miles have expired, right? Imagine if you actually had an automated system that is AI-enabled that can look at vast amounts of data And bring it down to the personalized level of getting in touch with you, Christine, to say, you know, your miles are coming up. You may want to think of, based on your travel patterns, you may want to think about redeeming it for this, and this is the best path, the most value-directed path of redemption that you could consider at this point in time.

Dee Waddell:Mm-hmm.

Charles McKee:So that, I think, is also another interesting area. But I think in general, there, you know, someone said, Marcia said yesterday, the entire airline is ripe for the application of new technologies.

Stephen Schwartz:Right?

Charles McKee:I think we as airline leaders have to make some hard decisions, hard trade-offs, and weigh up the pros and cons of, again, is it pursuing solutions or is it pursuing migrations?

Christine Boynton:And when we're talking about AI, I hear a lot of airlines talk about GenAI and approaching it cautiously and in a very thoughtful manner as they look for ways to apply it in their operations. And Dee, I know that you have a white paper that's specifically goes into the opportunities on GenAI. What are some of the most impactful or powerful applications that you see available for airlines today?

Dee Waddell:Yeah, and, and we'll be glad to share, you know, our white paper. I did share it with the panel just as a discussion point. But we see in, in several areas. One is, of course, the customer and the passenger side. Clearly a number of things that you can do on the AI side with that. You're seeing a number of airlines Delta with Ed Bastian in Las Vegas, some of you may have seen, had announced their virtual agent, right? We're actually— we just announced, I just got back from the FII Institute in Miami signing with Riyadh Air. Some of you know we're doing quite a bit of work with Riyadh Air. They've just announced publicly around their AI plans and their virtual agent and additional pieces they're using. We're seeing a number of things in the passenger, but I'd also say in the operational side. I think Charles and Stephen mentioned this, but the operational side is ripe. Now the question is, are we going to be able to get the sustained investment which we talked about? But there are a number of things around predictive maintenance, leveraging data. We're not shy of data. All of our airlines produce plenty of data. The problem is we've built our systems in silos, and they are— it's very difficult to connect these systems.

Christine Boynton:Yeah.

Dee Waddell:And we also have very discrete business areas, right? But the operations is clearly a piece. The other one that I'm seeing here around the world is around finance transformation.

Stephen Schwartz:Mm-hmm.

Dee Waddell:You're seeing with the introduction and the thinking about orders, about how I can essentially, there's a lot of discussion around this, around eliminating revenue accounting, and being able to flow through on, Exchanges, exchange rates, and so forth on the billing side. But there's a lot of discussion there, and we're seeing several airlines that we're working with. Can't name the names, but we're working on a finance transformation with them as well. So those are some of the areas. Then of course, just general IT, IT help desk. You know, the interesting— I'll just real quickly, one piece is even for IBM, we're using it in. So we have what's called now Ask HR. So last year at the beginning, first time in my career, I was told that I would no longer have an HR business representative for me. I was given an Ask HR search bar, you know, a search window. That to me is now my— that's my point for doing all of my HR transactions. Now I can escalate some things, but surprisingly, it has been amazingly efficient, and we at IBM have committed to, you know, over— I can't remember the number, but it's over a couple of billion dollars in terms of savings just with AI on the enterprise side with HR, IT, and that's where a lot of it is being pushed right now.

Christine Boynton:Wow. Well, we keep mentioning huge amounts of data, and as systems are more connected, you know, we already have a wealth of data that's only continuing to grow. So throwing this question out to all our panelists, and maybe, Jitendra, you can kick us off, but how do we better look through that data? And I know some of the recent industry commentary, including NTSB Chair Homendy, was The next accident is in the data. We need to do a better job analyzing the data. Boeing touched on it, said that's something they're working on. So whether it's safety reasons, whether it's maintenance implications, how do we better mine the data to identify trends and get ahead of an issue?

Jitendra Sindhwani:Yeah, I've been saying this for the last 8 years. If you torture the data enough, it'll confess to anything. So there's a problem with the data, hence. So I think the problem is not that we're generating a lot of data. I think the issue is a lot of data is irrelevant itself. And I'll give you a very simple example. You know, we were replacing an end-to-end cargo platform at one of the larger airlines, and we realized that they had about 100+ systems which were coming together to run the operations, right, of the whole cargo business, right from booking to delivery. And the teams did not even know what 50% of those systems were doing. Because it was there. Somebody had built it, somebody had connected it. Nobody had the— and there's a lot of data that was coming from all the systems, right? So now you have a huge data warehouse, right? Or data lake, as they call it now. Or data ocean, I call it actually. You have huge data sitting there which nobody knows what to do with. Now you're trying to do AI on top of that. So you're going into a loop of trying to solve a problem which you don't even know whether it exists or no. I think my personal view and our research and recommendation is that you look at changing the mindset, changing the transformation of what you're doing, and then look at the data.

Christine Boynton:Mm-hmm.

Jitendra Sindhwani:Because just going and solving the data, I can give you 100 use cases right now itself of where you can use the data and use the AI on top of that. The problem is if there is an underlying mess, you're not cleaning it, then you're only generating more data and trying to solve point problems. The better approach would be, first of all, you should know what kind of airlines you want to be. Become a truly digital airline, which means you have to change part of the system. Then look at, do you have the right systems underlying which need the change? Then you look at whether they're going to be AI-enabled or no. If you take that approach, you want to just modernize the airline completely and not just looking at point solution.

Christine Boynton:From your perspective, when you say, what kind of airline do you want to be, should all airlines be looking to be more digital? What should the answer be?

Jitendra Sindhwani:I think nobody has a choice but to be digital.

Claudio Buncamper:Okay.

Jitendra Sindhwani:That's my simple answer. It doesn't matter what kind of airline you are. You are living in a digital world where the consumption and the delivery is driven by digital channels now, or digital supply chain, right? So unless you are truly aligning with that, and it's going to get even bigger in that, right? So unless you truly digitize yourself and become an airline like that, I don't think you'll be surviving for too long in the future. Definitely not.

Christine Boynton:Does anyone else want to comment on data?

Stephen Schwartz:Well, he brought up a great point of sometimes they're trying to solve a solution they don't have. And you'll see that at larger airlines, we have a large technology department which is enamored with machine learning or AI. And the first step they have to take is to build a data lake. And they'll build a data lake, they'll take all the data from the systems, and then they'll try to do something with it. And what they're trying to do is unknown at the point that they're starting the whole progress and the whole process of trying to innovate. The business users are still working in the systems they have, and they're creating models and different things and doing it on the peripheral, feeling, I'm solving a problem, when they're not. They're just creating another point, another access point. They solve their problem, they go back to the user and say, well, look at this, and they go back into their system and they do their same day job. So a lot of the pieces is the airlines looking to, what is the problem we're trying to solve, and not create something to solve the problem, right? Kind of spinning that around a little bit. Yeah.

Christine Boynton:Okay.

Charles McKee:Can I just add on that? I think you touched on the point earlier, Jitendra, on the silos and the need to know intentionally what you're going to do with that data once you break down the silo. I do think that there are, in the commercial world of airlines, there's tremendous opportunity to not only break down those silos, but actually then to use that data in ways that it hasn't been used before, specifically linking, for example, revenue management or network planning with marketing.

Jitendra Sindhwani:Yes.

Charles McKee:And that's something we're spending a lot of time looking at. How can we actually get intentional data from marketing and feed it back into revenue management that ultimately in turn can feed network planning process, and then vice versa? So when we're going out and doing a Google buy today, we're pulling revenue management data, right? So looking at booking velocities, et cetera, so we can actually pinpoint the buy, so optimize the buy. So this whole notion of— I think you're absolutely right. You have to have a purpose for the data, right? There's some very, very clear needs for it if we can get through breaking— if we can do the data busting, right?

Jitendra Sindhwani:Absolutely. Your point is very, very valid. I think these certain silos have to be truly broken. For example, if you look at the whole order piece, right, we run loyalty systems for a lot of large airlines and even for some of the middle-sized carriers also now. And we see that loyalty along with order, yes, or offer together is a very powerful combination. Now, so you have to look at it in that way that if I have to put customer in the center, then what are the various touchpoints which are important for me? In a disconnected, siloed world, you're never able to do that. The loyalty department is thinking totally different than the offer management side of the— the revenue management side of the system. Bringing those elements together and then creating a powerful AI layer on top of that is definitely going to give you a huge value.

Christine Boynton:Mm-hmm.

Jitendra Sindhwani:You have to basically know You have to slice the problem down completely from top to bottom and then bring things together.

Dee Waddell:Okay. Can I issue a warning? Because we're talking about data now, you know, having been at United Airlines a number of years back running MileagePlus and United.com, seeing it from the commercial side, then also going to the IT side as CIO as well, and now at IBM, I think the one warning we have to do is We've talked about how data has now just creeped in everywhere and we're struggling even in with revenue management marketing to get effective offers, right? And this has been literally in the early 2000s since we've been talking about this. Okay, so the warning is with AI, you have to make sure that when we talk about AI, you need to do it in a coordinated fashion.

Stephen Schwartz:Yeah.

Dee Waddell:Because the same thing will happen as we're talking about data 20 years today, Even with revenue management and marketing not connecting for simple things like offers, we're gonna have the same thing with AI happen if we don't take a coordinated approach. I just wanna be very clear, that's the opportunity, but that's also the warning.

Christine Boynton:So what would that look like, taking a coordinated approach?

Dee Waddell:I think it starts at the top. The board needs to understand what are the value proposition— what is the value proposition, what are the opportunities you have for AI? Now I'm not talking about all of the agents that you're going to be having in finance about order to, you know, cash and things. You can boil this up, but if you're not using a similar type of platform, because it is heavily reliant on data, and if you don't have the data in an easily digestible area and way, you're going to run into these silo approach. So again, I would say, what are your, literally from the board and the CEO perspective, what are the top 10 initiatives that the company's going to be looking at from an AI and saying, this is where we're putting it. Architecturally, do they come together? Where do they? Make sure it's a top-down planned approach versus a bottom-up, we'll just let everybody go and invest in whatever they think is the best AI. That's the opportunity and that's the warning.

Jitendra Sindhwani:Well, just one additional point on that. I think you bring up some interesting part. There's one more element which is the human element on top of that. I think the change part is still complicated because what many companies are doing is, The AI engine will give you the recommendation, then are humans again looking at it to see is it coming right or wrong? The whole purpose is actually lost. You're not fully trusting the job that AI or the system is expected to do. I think from that perspective also, there is a mindset shift that has to happen. I was reading yesterday an article that the more mothers in California who are willing to send their kids alone in Waymo, in a self-driven car, driverless car, than a car with the driver because they believe that's going to be safer.

Christine Boynton:Yeah.

Jitendra Sindhwani:Because you don't have the human involved again there at all. I think that's a very massive mind shift that business in general and airlines definitely will have to look at. That's a very important part. If you trust the system, then trust the system. I know it's easy for me to say sitting over here, but That's the direction that it has to go in. Okay.

Charles McKee:Kristo?

Claudio Buncamper:I do agree with that. The human factor is a big change because, again, you know, if you take the different departments, everyone has a different task. But at the end of the day is how can all of these tasks come together? But I have also seen in some of the countries where I've worked in the past that regulatory issues are also quite challenging. So while we're going to an entire Digital thing, getting rid of revenue accounting. I can remember my previous airline, when we were audited, they still want paper for 10 years. So, you know, we had a warehouse there with boxes that the rats might have been eating the paper, but we had to keep it, you know. So even while you're going into that, you know, there are other challenges. So yes, we have the challenges within the airline, you know, starting from the top going down instead of from the bottom because it's It's like cobwebs you're creating, you know, and the same what we did now is the same with AI. If it's not done together, you know, you're going to have that same problem 10 years from now where everyone is on their own. So yes, you know, that approach and the human change, of course, is also very important because that's very difficult. You know, you have someone 20 years in operations and we were speaking about that yesterday. You suddenly tell them, well, yeah, the machine is telling you this is the best way to do it. I did it like this 20 years.

Dee Waddell:That's good.

Claudio Buncamper:We did get through. You know, so it is, it's quite challenging.

Stephen Schwartz:The coordination piece is, it extends, I bring everything back to operations, but they talk about on the commercial side, when we've advanced our decision-making in the operations, what we have to do is be cognizant of who our passengers are there at that point. And it used to be that you recover one flight at a time. So when there was delays coming in the hub, I would take the first flight, I would reaccommodate the passengers. But now I have the ability to re-accommodate all the passengers at once, and I need to make sure that my high elite business travelers are getting the first nonstop and I'm not putting them on the connection and doing the opposite for the spring breakers that are going to fly me once every 2, 3, maybe never again.

Jitendra Sindhwani:Mm-hmm.

Stephen Schwartz:So the ability to share that data very thoughtfully, understand what we have in that decision process and what's important to us as a holistic airline is really important. So it goes a little bit beyond even the commercial side, but Into the operations piece and what we have to be cognizant of.

Christine Boynton:And Charles, that's something you've touched on, right? Disruptions being linear, recovery from disruptions being linear, but seeing an opportunity here for AI.

Charles McKee:Yeah.

Dee Waddell:If I—

Charles McKee:I just want to talk, speak a little bit to what Dee has said. I fully agree that there has to be— you have to have a framework, right? And I think that there are 3 things that are really important in doing anything with AI. And I'm no expert. You know, we're still— we're making it up and we're learning as everyone else is. But I think that a couple of prescriptions for success. One is look at it as a task-oriented opportunity. That is to say that you're solving something very specific. So the more concrete you can be in what you're trying to achieve, the better. So it keeps the focus on. Second thing, though, is recognize that there is a human interaction. There's got to be a human loop in how you're using AI, and that has to be identified right up. And there are times you just have to step out, right? So there's— it requires behavioral change, I think, in how the organization uses the technology. But I think most importantly is you almost have to think about AI agents as a talent management exercise. And if you think about it, it's just like bringing on a new employee. You've got to onboard them. You've got to hire them. You've got to onboard them. You've got to monitor them.

Jitendra Sindhwani:Yeah.

Charles McKee:And at some point, you'll probably have to retire them as well. So taking that type approach, I mean, Dee, you've got your human resources, right? At some point, you may have to retire them.

Dee Waddell:Ask HR.

Charles McKee:So I just, I think that that is, it's really important in the framework. Yeah, on EROPS, I mean, it's something which, as customers, as airline leaders, it's the bane of everyone's existence. Without the right technologies, without the right data, without the opportunities that we have today, It's always been a very linear process, right? The way you've described it, you're reacting, you do one decision, next decision, next decision. I think one of the great things about the technologies that are available today, the opportunity to, at scale, amass a lot of data, run scenarios, and put together an action plan, is your ops will benefit tremendously, right?

Jitendra Sindhwani:Mm-hmm.

Charles McKee:So the customer experience will— should be elevated if the technologies are applied correctly.

Christine Boynton:And safety in this industry is obviously always a top— the top critical focus. So when we think about safety and compliance, where does technology need to play more of a role that it hasn't yet, and where are we going in this space?

Dee Waddell:I'll call it safety and security. Because, you know, safety can be impacted by security events, and there are world actors that we've seen it in our industry. Where data has been compromised, where we've had to deal with that here, you know, at large airlines, small airlines. But you have very, very sensitive information around passports, around where they're going to be on what dates. Let me just say that the information security or cybersecurity angle of this continues to be something that if you don't monitor, I believe, at the board level, We should have regular updates. I think the board should once a year audit and make sure that the practices that we're using are not just by your internal IT company saying, yeah, I'm doing the best I can, but you should be using a third party just like you do on the finance side. That's a core recommendation I've made. I've put in 2 security offices, one at Amtrak and one another aviation company. It's very important to have that level of buy-in. But on the safety side, I mean, I think it comes down to the employees. I mean, we're— the fact is, is we have a lot of employees within the airlines, and how do you enable and equip them to make sure that the decisions that they're making or the opportunities that they see that they're taking advantage of? And we believe mobile, AI, these technologies can really play out, right? We've done a lot of work together with Apple. Actually, we've done some work Helping out IBS Software, Jitendra, at a couple of different clients. But the fact is, is that having a— we talk about passenger experience, but sometimes we forget about employee experience.

Christine Boynton:Yeah.

Dee Waddell:And I would just highlight that we just need to make sure that we look at the employees and their jobs. How do they connect? How they can leverage data together? And usually mobile, particularly most of us are using devices now, That's really the place where you can bring those together and design this new unique opportunity. And we've done that with a number of airlines around the world, and it's an exciting space. But don't forget about what we call B2E, which is business to employees.

Jitendra Sindhwani:Safety is a very important part. I think one area where you don't have to wait for the whole transformation to happen, because safety is paramount, right? Like, safety is very important. So I think a lot of use of data there in safety side is very, very important, and then definitely should be done right away. Some of the incidences that happened in the recent past, if you read about it, if you could create early warning signals, right, a lot of that could have been totally avoided, easily avoided actually. Whether it's weather-related, whether it's FAA-related, it doesn't matter who's, you know, you find your culprit later on. But having early warning signals there was totally desperately needed. In fact, I was surprised that it did not exist. To me, that was very surprising that we're living in the so-called digital age and that was missing. So I think There are, and then you can create so many simulations also, as you rightly said about, you know, the audit, etc. I think every year airlines together with, you know, different administrative, you know, offices of various countries should do these simulations to see, right, what things can go wrong, weather-related, system-related, or anything else. And data can give you that ability, or AI can give you that ability to create the simulations and see, are you ready to react to that or no, and be proactively prepared for it. I think that is one area. Definitely, data is going to be very, very critical now and the use of AI.

Stephen Schwartz:We talk about our data internally at the airline, but when we look at ANSPs and the ATC systems around the world, in a very forward-moving world like— or country like the United States, it's still phone calls. They get on a phone call every morning and they talk about their airspace. They're not sharing data. They're actually on a phone call talking about, hey, this is what we think is going to happen in the city. What do you think? And that's how they collaborate. So they're all looking at their own pieces of information, they're all looking at their own meteorology pieces, and they're all discussing over the phone, what should we do? So when you look at the data-driven and the increase of safety, it's really not just sharing our data internally, but with the governments, the ATC systems that we integrate with constantly on a daily basis. And still a lot of it's done through voice.

Charles McKee:Right.

Stephen Schwartz:Not through technical information or data sharing.

Christine Boynton:I want to make sure I'm leaving time at the end for questions. So maybe while we get some microphones prepared, I'm going to kind of go down the line and ask each of you, what airline technology challenge keeps you up at night? Jitendra, you're first.

Jitendra Sindhwani:I think everybody knows what to do. It's the speed of change.

Christine Boynton:Okay.

Jitendra Sindhwani:You have to do it a little more faster. I was narrating the data to you, right? I was just looking at our sales data. Our average sales cycle for setting— selling a system 5 years ago, 6 years ago was 13 months. Now it's gone to 19 months, which means airlines are actually taking longer time to decide and then implement. So if you start to change the technology today and you're going to take 18 months to decide on the technology and then take another 24 months to implement, You're 3.5 years already late. So I think speed of change to me is a bigger problem than what technology you should adopt. Okay.

Stephen Schwartz:So, well, mine sits— I often call the area that I work in the airline is the heartbeat. If the heartbeat ever stops, the airline stops. So really, it's the airline success is that it continues working, right? A great day at an airline operations center is no one noticed anything happened. It doesn't mean that nothing happened, it just means nobody noticed it happening. So what keeps you up awake is, is in the flight operations centers, anything that's causing problems creates issues for your passengers and then rises up through increased costs and all the other pieces. So we stay awake all night because the airlines don't sleep and they need to continue the technology. And if the heartbeat stops for a minute, the whole airline stops for that minute.

Jitendra Sindhwani:So, okay.

Dee Waddell:Yeah, I'll take a half glass full approach. What keeps me up is the passion that I've had within the airline space in particular, but I do believe that the offer and, well, order, the order management is something that will be a massive shift for the airlines. Let me give you an example because I'm not certain a lot of the commercial folks know what are the core things that the order, the new order platform will give over a reservation or PNR. Just like a restaurant, let me put it to a restaurant. So when you invite a friend over to the table and you want to separate checks, or you want to, you know, have someone, maybe your kids, or maybe some other adults or friends, you're easily able to manage that order together. You can separate the tickets, you can add someone to the table. Think about that in the airline space. Can I today on a reservation be able to say, oh, you pay for your portion.

Jitendra Sindhwani:Right.

Dee Waddell:Can I change the date? Can I change the location on the same PNR? Absolutely no. These are all separate things that in the real world we do beyond in restaurants and retail shops. These are the things you have to be aware of. That's really my passion. We've been talking about this for 20+ years. E-ticketing was probably the last biggest transformation we've had. But I think this next one in order, Thoughtfully planning through that, getting through AI, those are the things that keep me up at night, but both— but on an excitement perspective, not on a fear perspective.

Christine Boynton:Okay. Claudio?

Claudio Buncamper:Well, on the airline perspective, for us, of course, with the technology, cybersecurity is a big part. But, you know, on an operational point of view, commercial point of view, it is With all of the technology that is out there, the changes that you're doing. For us, at least, you know, seeing that the transformation that we did last year with systems and everything, you know, our new PSS system is order, you know, offer and order ready. They're in that direction already. So, you know, for us, that's the transition that we will go into. But again, you know, if you're dealing with partners and everything, They also have to be ready or it's not going to work. So, you know, that, you know, it makes you think because you might be able to say, I can do 3 steps today, but if my biggest partner is doing 1 step, what do I do? So, you know, these are the type of things that we have to think about. But what will keep me up at night is, you know, I would think more, you know, what happens when the system goes down?

Christine Boynton:Yeah.

Claudio Buncamper:down, because this is one thing with technology. I mean, 30 years ago, if we had no electricity, that aircraft left. We had a manual process. Today, when the computer goes down, you're grounded.

Jitendra Sindhwani:You have to look—

Claudio Buncamper:technology is great because we can do so much, but without the technology, we're lost. These are the things that keeps you up because—

Jitendra Sindhwani:Sure.

Claudio Buncamper:I mean, we live in the Caribbean. Internet goes down, boom, you're done. What do you do?

Stephen Schwartz:I challenge my kids to find how to drive somewhere without their phones.

Claudio Buncamper:Those are the things more on an airline perspective that I would see as a challenge.

Christine Boynton:Okay. Charles?

Charles McKee:It's kind of a 2-part answer, I guess. From a perspective of being an airline leader for an airline that is 20 months old, it's really about speed to market. Are we moving fast enough? We know what we need to do, but are we working with the right vendors? Are we doing— making the right ROI decisions? Are we getting the results we expect and our stakeholders demand? So that's really— it's really more executional related. But I think as an industry practitioner, my concern for the industry is really speed to change. And if we don't— move along together, we will fragment the industry as we know it today. And that may not be a bad thing, but we need to be ready for the ramifications of moving from the PSS world to the offer-order world. It's going to require a certain velocity of change that moves everyone over the chasm fairly quickly if we want to kind of keep the world order that we know today. So that's a little bit of concern.

Christine Boynton:Well, let's open it up to audience questions. So if anybody would like to ask one of our panelists, A question. We have some microphones in the back of the room, so just raise your hand and we'll get it over to you.

Stephen Schwartz:Okay.

Christine Boynton:Well, Charles, since we have a little extra time, let me end with one final question for you. What will we be solving with technology in 10 years that we cannot solve today?

Charles McKee:So, putting on the Bermuda Air hat, Sitting on an island with colleagues who are trying to manage supply chain, I look forward to the day that Embraer can dispatch a landing gear through a drone and deliver it in less than 60 minutes from Fort Lauderdale to Bermuda.

Christine Boynton:Wow.

Charles McKee:So robotics.

Claudio Buncamper:Okay.

Christine Boynton:Well, on that note, please join me in giving a round of applause to our excellent panelists.

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