How Can Airlines Escape the Acceleration Trap?
Avoiding the cult of agility will help airlines deliver products that are not merely great, but superb
Here is a little joke. A frequent flyer’s work is always the same – whether they are grounded due to the virus or not, they are always zooming around. Geddit!
A common complaint about the video meetings made possible by apps like Zoom is that since they hide some of people’s body language and emotional energy it is harder for colleagues to figure out what dynamic is really going on. Also, confinement changed our perceptions fed by (social) media. Has this happened to the airline industry? Were Teams at risk of being deceived and did they choose poor solutions because confinement changed their view of reality because there was nobody to correct us? How did this prepare the industry for recovery?
Airlines did not sit still during the pandemic. With smaller teams Hanging Out and Going to Meetings they were busier than ever planning and re-planning the eventual return to life as they knew it in 2019 and before.
Humans have an innate sense of adventure and love to travel, so it should never have been in doubt that demand would be bubbling, booking engines buzzing and airports bustling once borders re-opened.
Unfortunately in the mean time airline managers had too much time on their hands and struggling vendors (see article) with empty sales pipelines were keen to justify their existence. So they took to social media to get worked up about a newly-imagined competitive world in a flurry of white papers.
Industry commentators stuffed their content with cool buzz words – digitalisation, agility, resilience, transformation, re-imagening, redefinition. All meaningless, but just like too much time on Zoom it deceived people into thinking that the world had really changed.
As a result airlines may have fallen into something I call the “acceleration trap”. What is it and how can they escape? Read on to find out…
Back in the early 90s scholars and practitioners warned against pushing product life cycles to dangerously short limits. But fashions changed and the world heard agile evangelists preaching about how developing and implementing projects in two week ‘sprints’ was the way to stay ahead of competition.
This approach tends to emphasise features rather than benefits (in aviation leading to the demise of first class, see article).
A good example is the idea that passengers want to use their personal devices when they are on a flight. We all love our shiny flashing rectangles, but we do not use them just for their own sake. It would be much better if airlines asked instead what people want to use their devices for and why, and build value-added platforms from there.
Maybe there is a service development opportunity or a chance to gain some ancillary revenue from a third-party. By keeping the analysis of what passengers “want” too simple airlines are likely leaving money on the table.
This leads on to the “acceleration trap”. Acceleration of development should lead to increased sales but has also proven to cause shorter product life cycles and lead to smaller sales volumes over a product’s life. This means that tangible features become dated within months. We witnessed this since the late 1990s.
Unfortunately in aviation, getting products on board planes takes years. Aircraft manufacturers and product builders go through a process called certification to make sure that every asset in the cabin is safe. For example they must not catch fire, trap fingers or emit dangerous fumes.
Certification is costly and takes years, so although comfy seats like the Q-Suite (see article) and exciting entertainment systems represent the state-of-the-art when they enter development, they are already obsolete by the time they start flying.
Since they represent investment of tens or hundreds of millions they have to last five years or more before an airline can even think of replacing them. By this time the world off the plane has moved on even further.
Airlines with successful cabin products like London-based British Airways’ Club World have enjoyed fruitful demand for their interiors for years. Club World’s “yin-yang” configuration was first introduced at the turn of the century and has only recently been replaced by a seat with a door. Virgin Atlantic’s “herringbone” Upper Class design is still in successful service nearly twenty years after first being introduced.
Hong Kong flag carrier Cathay Pacific on the other had a false-start with their “Olympus” seat, which was deemed too narrow and proved a costly failure. Their successor “Cirrus” model though has proved a triumph.
An important benefit of Club World, Upper Class and Cirrus was that despite not being the most spacious or visually appealing in the marketplace they are extremely comfortable. Will the latest generation of seats with doors prove as durable? Time will tell, although it is interesting to note that BA’s Club Suite with a door is based on the Qatar Super Diamond, originally designed for Qatar Airways and already considered by its launch customer to be obsolete.
Software is the same, including airline platforms for distribution, revenue management and passenger servicing. Vendors love to accelerate by focusing more on software services rather than products, explaining the success of cloud computing. But ultimately airlines suffer higher costs and history shows that performance is stable at best. Just like other subscription services, it makes airlines more dependent from a business and commercial continuity perspective. Desirable?
Reversing these trends is extremely difficult. Vendors have no incentive to change because airlines are beholden to them. Change must come from the airlines themselves – tricky for an industry where priority number one is always safety and priority number two is always operational reliability.
So how can airlines escape the acceleration trap? I think that the answer lies in modernising enterprise data, using predictive analytics for inter-silo workflows, and applying machine learning, deep learning and automation through artificial intelligence to design better organisations that are goal-centric, i.e. around end experiences as perceived by customers (see article).
By creating new structures in their business that work across conventional departments that tend to operate as silos, airlines will organically foster deeper understanding of what people who buy tickets and actually fly on planes want and need and how these experiences form an integral part in their daily life. This will not always be the same as what hyped-up vendors write about on social media about the travel bug.
Airlines can escape the acceleration trap by emphasising consistency, reliability and good design. Just like Club World and Upper Class, which were so successful for so long because they were extremely comfortable, even if not as spacious as the competitors.
Even in the smartphone age an original iPod with its “wheel” is a pleasure to use and does a great job of playing our favourite tunes for us to enjoy the music and be entertained during a long flight (note, a benefit not a feature).
It is the same with products developed by airlines for their planes. When passengers can experience a good but older seat on every flight an airline offers, that is much better than a lottery of always having some planes with the great seats and others with clunky ones, no matter how new they might be.
Creating a shift in mindset like this will be tough and depend on airline teams getting “under the hood” to understand what their passengers really want and how they want it presented to them. They need to understand that passengers want to use their devices to shop, do work and entertain themselves in different ways throughout different contexts. If they can do this right a whole new world of revenue potential awaits (see article).
ricardo DOT pilon AT millavia DOT com (author)
oliver AT ransonpricing DOT com (editor)