Meeting Mentor Magazine

December 2018

Tracking Technology

Airlines Buy Into the ‘Internet of Things’

First came deregulation, then the monetizing of individual services. Now, flush with profits, airlines are on the cusp of another “revolution” as they begin to take advantage of the “Internet of Things.”

Over the next three years, more than 86 percent of the top 200 airlines around the globe anticipate significant benefits from using tracking technology and data collection and analysis for check-in, bag drop and bag collection, and 37 percent have allocated budget already for these purposes. The 83 percent of passengers that utilize smartphones will be connected, too, according to SITA’s 2015 Airline IT Trends Survey.
• This all points to a lot more “personalization” through technology. More than 75 percent of airlines plan major programs to deliver passenger services through smartphones between now and 2018, including a “highly personalized” smartphone booking experience, compared with today.
• Airlines are starting to utilize beacon technology in actual applications or trials (9 percent of airlines now, but 44 percent by 2018). In three years, 57 percent of airlines will use beacons for way-finding — from check-in to gate. These sensors also will follow bags, especially at key points: 44 percent of airlines plan to use them at bag drop and 43 percent at bag claim. By 2018, 70 percent of airlines plan to solve baggage issues with location-based information (just 10 percent do so today).
• Location-based tools will be used for notifications to improve on-time boarding. Already, about 60 percent of airlines offer flight notifications via smartphone apps, which will rise to 96 percent by 2018.
• About 22 percent of airlines expect to enable passengers to download content (books and films) from media kiosks to their tablets or smartphones for a flight.
• Expect to see a “virtual concierge” for passengers. Over the next three years, one in five airlines will introduce a service that delivers airport shopping to gates and lounges.
• Mobile apps that enable airline passengers to book destination services will jump from 6 percent of airlines to 44 percent in 2018.
• Airlines are also turning to the cloud to help handle the rapid growth in apps and the volume of data, and to benefit from greater flexibility and lower costs.
• Only 7 percent of airlines have considered how to use wearables.

What shouldn’t get lost in the technology stampede is consumer privacy. “The issue of data security and protection is already high on the agenda of all airlines,” said Jim Peters, SITA chief technology officer. “Location-based services are put through the same tests and strict data privacy controls as other new technologies they introduce. It comes down to the consumer’s choice. [They] will only work if the passenger chooses to switch on the services — Bluetooth on their phone, download an application to their phone and give permission to the service provider for their location to be used.”

Profitable air travel. It was a very satisfying first quarter of 2015 for the 26 U.S. scheduled passenger airlines, with eight consecutive quarters of after-tax net profits, according to the U.S. Department of Transportation’s Bureau of Transportation Statistics. The total of $3.1 billion in 1Q soared over $507 million in first quarter 2014. Also in 1Q, these airlines collected $864 million in baggage fees (+9 percent over 1Q 2014) and $768 million from reservation changes (+5.8 percent). The top 10 airlines are Delta, United, American, Southwest, US Airways, JetBlue, Alaska, Hawaiian, Spirit and SkyWest. — Maxine Golding

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