The 2020 State of Airline Digital Optimization – Low-Cost Airlines are Better Prepared to Face Post-COVID-19 Digital Reality
71% of airlines classified as leaders in digital maturity are low-cost airlines, and 80% of the least prepared are traditional, full-service carriers
NEW YORK – A recent survey by Diggintravel, a research and analytics consultancy firm for airlines, in cooperation with Glassbox, the leading analytics platform to optimize customer experiences on web and mobile applications, reveals the results of airline digital optimization maturity. The research – which represents the views and insights of 49 carriers worldwide – shows the contrast between low-cost and traditional airlines’ digital optimization and personalization utilization and strategies, with low-cost airlines being ahead of the game in this crucial sphere. The report also reveals the importance of digital capabilities, and how it will be fundamental to airlines remaining competitive in a post-COVID-19 digital world.
Prior to the pandemic, airlines’ digital investments were at an all-time high, with projections for the next decade indicating there would be more digital workers on staff than engineers. Now, with the industry in turmoil, airlines are cutting up to 30% of staff. At this juncture, new digital optimization and experimentation will be essential for all airlines to rebound and remain competitive. The survey reveals a split down the middle between airlines already integrating advanced digital solutions and those who are not, with those who are currently using digital tools having the agility and framework to see what strategic resources are necessary moving forward and which can be put temporarily on hold in efforts to downsize and remain financially viable.
“Our research shows that some airlines understand the value of data-driven experimentation and digital optimization, while some still have a traditional approach to eCommerce marketing,” said Iztok Franko, Consultant & Founder of Diggintravel.com. “This traditional approach won’t work in the post-COVID-19 world as the travel industry is forced to completely digitalize. The current crisis is an opportunity for airlines to re-think the way they do business. Companies who adopt real-time customer journey-centricity and data-driven customer experience best practices are more likely to be profitable in the long-run.”
Digital optimization will also become crucial to medium and long term relevancy for airlines as they will need to adapt to drastically changing customer behavior and regulations. For example, traditionally airlines have struggled to entirely remove physical contact from the customer journey. Now, airlines will rely almost entirely on digital channels, embracing automation wherever possible, from building direct booking channels, increasing mobile app engagement, boosting web check-in usage to baggage drop and food orders. Another will be personalization, as travellers will need to know and be prepared for specific news and rules pertaining to certain destinations. Airlines that will succeed will be the ones effectively shifting from reactive to proactive digital analytics to understand the “why” behind trends.
“The current climate is an opportunity for airlines to innovate, try new concepts and evolve air travel,” said Yaron Morgenstern CEO of Glassbox. “While traditional institutions across all industries have been slower to evolve to the digital landscape, we at Glassbox have seen a significant amount of enterprises expand digital footprints in 2020, making experiences smoother for both internal and external activities. It is encouraging that the airline industry is moving forward through a particularly tough time and is looking towards cutting-edge solutions for the best possible customer experience.”
Key findings from the report include:
- 52% of airlines have digital optimization teams in place
- 51% of airlines have a documented and structured conversion optimization process
- 45% of airlines said they don’t have a budget for digital optimization and experimentation
- 49% of airlines don’t run experiments at all or only do them on an ad-hoc, project basis (on the other hand), 10% of airlines run more than 10 experiments per month
- 75% of airlines combine digital optimization and personalization activities with the same team. 51% say they use a personalization engine or a tool for personalization
The survey and assessment was conducted by Diggintravel and Glassbox. The results span 49 airlines and over 100 senior executives in the airline industry. The full report can be found here.