Technology caution moderates speed of transformation
been working with a tech giant. We’ll see one or two make a move in a big way – whether that involves acquisition of an airline or getting agreements with airlines or airports to share data and the tech giant becoming the ‘concierge’. “Someone who could take away
the heavy [technology] lifting would change the airline business model. The interaction with the customer would change. The airline would not book your excursion or re-map your trip when there is disruption. The tech giant would be the end-to-end vendor.” He calls this “tech vendor travel” and
said: “Airlines have been worrying about this for some time. I expect to see a major disrupter [in the sector]. We’re potentially at a tipping point.”
LEGACY SYSTEMS
FIGURES from EU data agency Eurostat suggest growth in UK online travel bookings may have
stalled in 2018 in all but the 25-44 age group (Figure 60). Those aged 25-54 are most likely to make
higher-priced purchases online, but ONS figures suggest a significant fall in more expensive purchases
among over-35s in 2019 (Figure 61). Major companies have multiple digital priorities (Figure 62), meaning investment in digital transformation attracts a minor
part of budgets (Figure 63) despite being viewed as ‘fundamental’ (Figure 64). Implementation in
many technology areas appears not as far forward as often suggested (Figure 65)
20 40 60 80
0
% Change YoY TRAVEL & ACCOMMODATION BY AGE, 2018 -2
FIGURE 60: UK ONLINE PURCHASE OF +1 +3 -4 -5 -2 -7 0 49% 51% 39% 43% 37% 27% 31% 32% 53% +1 56% 47% 45% 47% -6 -3 -1 -1 +1 +5 64% 67% 54% 48% 37% -7 -7 -1
One of the biggest issues many airlines face is matching technology advances to the legacy systems they use. Gauld said: “Most airlines have systems that take an age to upgrade. The question is whether the benefits [of upgrading] can justify the level of investment required.” Bowman said: “The industry has
grown up with legacy systems and these deliver core functions. They are so intertwined [with operations] that phasing these systems out is hugely complex. The priority is less legacy- system replacement than interoperability. If systems can be made more interoperable and easier to access and to extract date from, it becomes easier to mine data and insights.” He added: “There will always be a mix of technologies.” This tension between ‘old’ and new
technologies is reflected in approaches to tech development and use of cloud computing in aviation. Bowman said: “There is a focus on the
cloud around infrastructure rather than as an enabling capability. The industry is focused on how to replace its internal hardware footprint. But cloud providers talk of the cloud as an enabler with a whole series of tools and capabilities. “There is not a lot of evidence of
Source: Eurostat
16-24 25-34 35-44 45-54 55-64 65-74 16-24 25-34 35-44 45-54 55-64 65-74 16-24 25-34 35-44 45-54 55-64 65-74 Travel
Accommodation
% UK online consumers’ spending in 3 months
% change on 2018 +2
17% 14%
£1,000+ £500-£999 £100-£499 £50-£99 <£50
+3 44% 0 Total not 100% as figures rounded 16-24 38 Travel Weekly Insight Report 2019-20 25-34 35-44 45-54 55-64 65+ -1 9% -3 15% -1
50 %
10 20 30 40
41% 35% 21% 11% 19% 36% 18% +9 47% +5 47% Travel & accommodation
airports and airlines making this leap to ‘What does the cloud enable us to do?’
FIGURE 61: VALUE OF ONLINE SHOPPING Higher rates of spending by age -14 44% 35% 17% 20% 12% 20% 10%
Green bars in this chart for £500+ include the %
spending above £1,000
Source: ONS -8 45% -14 41% -2
% change on 2018 in
spending £500+
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