Confronting digital drag in Thailand’s airline sector

By Boonsong Kositchotethana

Airlines are generally less digitally savvy than some other sectors when it comes to exploiting the likes of big data analytics and the Internet of Things.

Some carriers are doing a great job when it comes to in-cabin service, online bookings, tracking bags and informing passengers about gate changes.

But unfortunately, many airlines tend to tackle these services in a segmented way, not providing a visible and seamless presentation of their offerings online, and thus not giving consumers a full, 360 digital experience, says Nikunj Shanti, chief data and digital officer at AirAsia.

“Airlines generally don’t think very much about the next level of services that [passengers] need,” he says.

While AirAsia was among the first to only do bookings online and has been proactive on social media, Mr Shanti could not help but perceive the airline as epitomising a low-cost carrier (LCC).

“Tech-wise, it is viewed as functional, not the most advanced, not coming out with new and creative ideas,” he says.

AirAsia, Asia’s largest LCC in terms of passengers carried, is not looking at any airline as a role model for undergoing digital transformation. Instead, it has turned its eye towards the concerns faced by electronic commerce companies like Amazon.com.

AirAsia group chief executive Tony Fernandes says the airline is not moving rapidly enough to leverage information technology in a virtual world, which would bring about substantial cost savings, improve customer experience and satisfaction and ultimately boost revenue in the future.

“In terms of how digitised the airline is, to my mind we are only capitalising on about 30 per cent of what’s out there, although many other airlines are still way behind us,’‘ says Mr Fernandes.

“But I hope by the end of 2018, we will be over 70 per cent digitised,” he says.

To illustrate efforts towards digitising the airline, Mr Fernandes unveiled plans to make all in-flight transactions on AirAsia, which are currently conducted manually, cashless as early as of April or May this year.

“I would like all of our in-flight sales to be electronic,” he says. “So you can just use your mobile phone to pay for food, WiFi or duty-free goods.”

AirAsia is also customising its website as it deepens its focus on digital approaches.

“That’s step one. By next month, when you log on, we will know about you, where you flew, etc,” says Mr Fernandes.

Selling airline tickets through social media platforms such as Facebook, LINE and WeChat is another aspect of the digital game being embraced.

He says that three per cent of AirAsia sales come from Facebook.

To further underscore the digitisation drive the airline is adopting, he says that all AirAsia cabin crew will be equipped with mobile phones, which will give them access to passengers’ profile data once they come aboard.

In yet another step to intensify its digitisation efforts, AirAsia hosted a “hackathon”, an event whereby computer programmers competed to come up with solutions to problems put forward by the airline.

Held at AirAsia’s head office next to Kuala Lumpur airport, “Airvolution 2017” brought together 20 teams from across Asia-Pacific, including Thailand.

The 18-hour exercise issue a challenge to the teams involving an AirAsia customer. Being provided a profile of the passenger, they were tasked with improving the client’s experience based on their digital footprint.

Team Avaiato from Singapore won the hackathon after putting together a real-time profile of a customer based on Instagram pictures and likes. From this, they were able to come up with targeted offers from AirAsia for items such as food and potential destinations.

The winning solution developed at the event will go into AirAsia’s incubator, where it will further be developed and expanded upon.

Mr Fernandes says this types of event will continue going forward as the carrier actively seeks innovative ways through external sources to expedite its digital transformation.

What’s more, Mr Shanti says AirAsia’s digitisation efforts are not proving costly.

“It’s not really expensive, a lot of computing power comes rather cheaply,’’ he says, adding the airline is spending about US$100,000 a year on data.

Meanwhile, AirAsia has put in place an innovation lab at its “RedQ” head office, opened late last year, to explore and experiment with the next generation of technology which might change the travel experience offered by the airline.

Some of the issues the lab has been tasked with include how to avoid long queuing, making bookings faster and improving the in-flight experience.

Confronting digital drag