Airlines Struggle with Implementing AI Solutions for Improved Operations
The aviation industry is abuzz with the promise of artificial intelligence (AI) solutions. Airlines are investing in these technologies to transform their operations and become more like well-known brands such as Amazon and Uber. However, despite their efforts, airlines continue to face challenges in implementing even simple AI intelligence into their offerings. It begs the question: is AI the right solution, or is there a need for simplification of processes and policies?
Missed Opportunities: Airlines’ Trouble with Targeted Upselling
One of the key promises of AI in the airline industry is the ability to offer more targeted upselling opportunities. For instance, airlines can use customer information to create fare bundles and offer relevant upgrades. However, the implementation of these AI-powered solutions often falls short. For example, if an airline already knows that a passenger holds elite status and is entitled to upsell benefits for free, targeting them with paid offers is a wasted effort. This not only fails to generate revenue but also raises concerns among customers about changes to their benefits.
AI and Upselling: The Challenges During the Check-in Process
The challenges of targeted upselling continue during the check-in process. Airlines often miss opportunities to sell products such as lounge access or premium seating to passengers who are already entitled to these benefits due to their ticket type or status. This failure not only results in missed revenue but also frustrates passengers who may feel that airlines are not leveraging their loyalty or providing a personalized experience.
Onboard Opportunities: Airlines’ Failure to Deliver AI-Powered Flight Details
Airlines have extensive information about flights and the services available onboard. With AI, they have the potential to deliver personalized information and offers directly to passengers via inflight entertainment systems. However, these AI-powered systems often fall short. Instead of providing specific flight details, passengers are directed to generic pages that leave them confused about which offerings are relevant to their flight. This again highlights the challenges that airlines face in implementing AI solutions effectively.
Can AI Really Solve Airlines’ Revenue Optimization Challenges?
Airlines are also looking towards AI to help with revenue optimization, particularly in pricing decisions. While AI-powered data analytics and machine learning offer potential for improved revenue, it is not a new concept. Airlines have been using data analytics for decades to optimize pricing with each new program iteration celebrated as a breakthrough. The shift towards calling it AI may simply be a rebranding exercise rather than a significant improvement in revenue optimization.
In conclusion, while AI solutions hold promise for the aviation industry, airlines are still struggling with the implementation of these technologies. Simple intelligence for targeted upselling and personalized offers has proven to be a challenge. Moreover, the success of revenue optimization through AI remains to be seen. Perhaps a focus on simplification of processes and leveraging existing logic could yield better results for airlines rather than relying solely on AI.
Analyst comment
The market may see a slow uptake of AI solutions in the aviation industry as airlines continue to struggle with implementation. This could lead to frustration among passengers and missed revenue opportunities. Simplification of processes and leveraging existing logic may be a more effective approach to improving operations and revenue optimization.
