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Recorded at ACTE-CAPA Global Conference Sydney, 29-30 Nov 2017

Virgin Australia Believes ‘The Future Is Here’

Virgin Australia’s new group executive Rob Sharp wants you to know ‘the future is here’ and Virgin is leading the way. With the launch of a new app imminent and the airline already taking advantage of chatbot technology and artificial intelligence Virgin Australia is in proving innovation is here.

Transcript

Rob SharpI think people have this perception of, "Technology's always down the track." And we hear these terms, avatars and chat bots, and robots and artificial intelligence. And the reality is a lot of it's already here. It's here now. We're using some of it. Airports are using some of it. So when you look at it, we're actually in a really changing environment and we're living it right now.

We're into chat bots and artificial intelligence. [inaudible 00:00:33] in our loyalty business at the moment. We're using artificial intelligence to actually look at marketing campaigns, and looking at, "How do we target them better?" So it's an internally focused efficiency tool. We spend a lot of money on marketing, and so we're very keen to ensure that it's relevant to our customers. Likewise, we bought a company called Talk, which is a data analytics company. They develop very smart, mathematical models for predicting customers' behaviour. And with this data rich world that we have, and we're entering into, we believe we can enhance our customer service offerings and enhance the whole journey by better understanding our customers. And so, we're doing a lot of work in that space as well.

We have 10s of millions of people who fly us. And so, one of the challenges for an airline is, "How do you do provide that sort of personal service when really you're providing a mass product in some ways." And how do you do that consistently? That's the biggest challenge. So for me, technology does two things. It's exciting, and it brings new innovative concepts and products that are great for customers. An example of that's our new wifi, where you'll be online, connected, flying to the US for 14 hours surfing the web or watching movies. Quite amazing what you can do now. But that's an example of an innovation. There's a lot of these technologies actually help with that consistency as well.

So we're moving more and more into realtime. We always grabbing our phones and look at things constantly. And for an airline, it means, "How do we get that realtime information to our frontline staff, so that you can actually make that journey frictionless?" And that's what customers want. They want to get from A to B. They like to have that as a seamless journey, and that's the aspiration.

For us, part of the face or the interaction of Virgin is through our website and our app. And it is a little clunky at the moment, an older generation tool. And understanding our customer, we know and they're telling us that they want more realtime information. And so, there's a big step change happening. We're moving onto some new platforms, and we'll be launching that first quarter, 2018. And our customers will see a massive difference. It won't be just one big bang. The technologies are integrative so you can keep loading up new features, and we'll continue to develop that over coming months. But it will be very visible for people and about 40% of our business traffic actually use those apps regularly. So we're very much looking forward to giving an enhanced experience.

[inaudible 00:03:00] it's designed for anyone who wants to use the app, but in practise, people who travel regularly tend to use these tools. And the reason they do it is that they're time-poor. They're cutting it fine getting to airport. They wanna know what gate the plane's leaving. They checked, and is it on time? And if there's a delay, can they go to the lounge? So it's just practical information that makes life easy.

One of the things that people always have an issue with is if a plane's late, or it's cancelled, the communication around that. Often, that can happen in realtime due to weather or an engineering issue. Being able to get that information to customers absolutely helps them understand where they're at and what's happening. 'Cause otherwise, they lose the control of their journey and that makes people anxious.

Well, the brand is very much around innovation, being a challenger, doing things differently. And we certainly brought a competition into the Australian market, and that's the ambition. We're still going to be doing that. We wanna keep doing things, pushing the boundaries. And those boundaries and examples are around social media. You might recollect that the last five to ten years social media's been around, that corporates have had quite a mixed view in terms of dipping their toe into that sphere. And the reason is, people can talk back to you. And that's bit of a challenge. Sometimes you don't want to hear the facts.

However, it's really important because it is how people communicate these days, and we use all the various channels. There's about five or six regularly. We'll retweet. We'll share observations. We'll comment on something that hasn't worked on that day and what we're doing to fix it. Bali is a current example. Where the volcanoes erupted, there's thousands of peoples stranded up in Denpasar at the moment. Social media's a really key way we're communicating with them. So it's really important and, we think that's gonna be a differentiator in the future. How you communicate, and use data and technology is a way that you can actually build engagement and interaction. So it's a key priority for us.

Yes. The corporate markets definitely a target for us. We believe we bring a good product to market for them. What are we actually doing for them? A lot of it's actually around that information and ease of travel. The corporates are very clearly telling us that our mobile app isn't providing all the information they would like. But we're also looking at, "How do we actually come up with things that are innovative for them?" So, the Economy X product is one that is quite unique in the marketplace. It's been out there for a couple months now, but we're getting a lot of corporate travellers who pay the extra $29 to actually get into a seat with extra leg room. They like the priority boarding of it and the comfort of it. So those innovations are very much geared to the corporate traveller.

The TMCs have played a critical role here for many years and that'll continue. I think digital is actually an interesting space, and it's creating some competition for all of us, including TMCs. So it's how we use that to engage? And I think that's probably the message for all of us. "Don't take your eye off the customer." And you still have a role here, but technology will definitely be an integral part of it.

Well, what I came across originally was it was a chance to reconnect with John [McGinty 00:06:21]. He and I have sort of bumped into each other and worked with each other for about 20 odd years. Also, the Tiger investment and the turning of Virgin Blue into a full service carrier with a suite of entities. So the Virgin Group, these days, has a cargo business. It's got a regional business, a charter business, a true loyalty programme, not just a frequent flyer point programme, a low cost carrier, that was a great strategy. I could see me being able to make my mark in that space. And so I thoroughly enjoyed the Tiger experience and turning that business around. This opportunity came up and the Virgin brand's got all those things that I love. It's innovative. It's a challenger brand. It's very much in its DNA. And it's very much a people business. So, what's not to love about it? It's certainly a challenge. I mean, aviation's a challenge, but I'm thoroughly enjoying getting my feet under the desk.

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