DIGITAL INNOVATION AND THE END-TO-END PASSENGER EXPERIENCE

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1 PASSENGER EXPERIENCE CONFERENCE, 4 APRIL 2016 DIGITAL INNOVATION AND THE END-TO-END PASSENGER EXPERIENCE RAYMOND KOLLAU FOUNDER AIRLINETRENDS

2 MEETING THE EXPECTATIONS OF TODAY S CONNECTED PASSENGERS: ON-DEMAND, REAL-TIME, END-TO-END Expectations of airline passengers are not only shaped by how well an airline performs versus its direct competitors. They are also fuelled by standards set by experiences that consumers have in other industries, as innovative products and services in one industry raise the bar for all industries. This means airlines and airports need to tune into the customer from a holistic perspective when designing the passenger experience. At this year s Passenger Experience Conference, AirlineTrends founder Raymond Kollau delivered a presentation about Digital Innovation and the End-to-End Passenger Experience. Below is the outline of our talk, illustrated by several few examples of how airlines are tapping into the changing consumer behaviour and expectations of today s connected travellers. On Demand As smartphones make it quick and hassle-free to order goods online, flag a taxi via Uber, or what have you, the on-demand economy has generated a sense of entitlement to fast, simple and efficient experiences as it taps into consumers appetite for greater convenience, speed, and simplicity. For example, analysis from Uber shows the longer Uber has been in a city, the less willing to wait for a car everyone becomes. In the food and beverage industry, Starbucks new pre-order app has become a very popular time-saving service, while airport restaurateur OTG has installed thousands of food-ordering ipads at half a dozen U.S. airports. And a growing number of airlines including Virgin America, Air New Zealand, Japan Airlines, Norwegian, Azul allow passengers to order meals, snacks and drinks via the in-seat IFE system in between regular meal services, while Qantas and EVA Air offer passengers the option to purchase duty free via the Panasonic ex3 IFE systems. Passengers onboard leisure carrier TUI Netherlands can even order drinks and duty free via their own smartphones. These on-demand services allows for retailing to occur throughout the entire duration of a flight rather than a limited time when the flight attendant walks the aisle.

3 MEETING THE EXPECTATIONS OF TODAY S CONNECTED PASSENGERS: ON-DEMAND, REAL-TIME, END-TO-END Real-time Furthermore, the ability to be connected on the ground and increasingly up in the air combined with airlines growing commitment to digitally-led service innovation allows passengers to be in the know about the progress of their journey in real-time. Delta in 2011 became the first airline to make the baggage process more transparent for passengers by launching its Track Checked Bags service. Available for domestic flights, Delta passengers can use the Track My Bag functionality on the Delta mobile app to scan their baggage tag with their smartphone camera. And, as Delta has equipped its entire domestic fleet with GoGo s in-flight Internet, passengers can even check up in the air whether their bag has made it on their flight using the free access to delta.com and the mobile app. Surprisingly, Delta s Track My Bags service has been introduced by very few other carriers although the rapid developments in digital luggage tags will no doubt change this. American Airlines since the fall of 2015 lets passenges track their luggage via its website (but not yet via its app), while Lufthansa has just announced a comprehensive baggage experience, allowing passengers to track their bags via the Lufthansa app, as well as launching a digital baggage tag in partnership with Rimowa. End-to-end Passengers, spoilt by availability of user-centric apps on their smartphones, are raising the bar for airline apps to become more relevant as well. A growing number of airlines are working to evolve their app into a digital travel companion in order to extend their service beyond just flying passengers from A to B. This approach is most visible today in the digital partnerships that airlines such as United and American have forged with Uber. In mid-2014, Uber announced it would open up its application program interface (API) so any app developer could integrate the on-demand car service into their app. Basically, all it takes is to add a few lines of code and an Uber button is part of the app. Digital eco-systems Further expanding its open digital eco-system approach, Uber recently launched Uber Trip Experiences which allows users to integrate mobile notifications and content from third parties into their Uber app. The idea is that while passengers are in an Uber car on the way to their destination, other apps and services can push them content during their ride which can be customized since data about the destination and duration can be used. Lufthansa is one of the airlines that has fully embraced this open platform mentality and the airline s Innovation Hub in Berlin is taking a leading role in turning Lufthansa into a socalled end-to-end digital travel ecosystem. As Sebastian Herzog, Managing Director and Chief Strategist of Lufthansa s Innovation Hub, summarizes it nicely: While Lufthansa traditionally sees itself only as an airline, digital transformation drives the connectivity and interdependence of all mobility services. In such a scenario, it is important to understand and build ecosystems while proving the ability to share data and partner.

4 CONNECTED PASSENGERS FOCUS: DAY OF TRAVEL

5 APP EVOLUTION: EASYJET BOOKING WAYFINDING

6 REAL-TIME TRACKING DELTA (2011) LUFTHANSA x RIMOWA DIGITAL BAG TAG MARCH 2016

7 AIR NZ» WELCOME IN THE LOUNGE PUSH NOTIFICATION

8 AIR TRANSAT PRE-FLIGHT ENTERTAINMENT

9 SQ COMPANION APP

10 LH SYSTEMS BOARDCONNECT» COMMERCE

11 OPEN INNOVATION

12 CUSTOMER CENTRICITY > DIGITAL TRANSFORMATION What if the inflight (wireless) IFE portal or airline app becomes an integrated touchpoint as part of an end-to-end airline service, entertainment and merchandizing platform/ecosystem?

13 UBER INSIDE

14 DIGITAL TRANSFORMATION

15 GOOGLE MAPS AS PLATFORM Google s goal is clear when you need to go somewhere, Google wants you to fire up the Google Maps app first and quickly figure out whether it is faster to hop on a bus, walk or cycle a few blocks, find a ride-sharing service, or hail a taxi.

16 DIGITAL INNOVATION» API ECONOMY» PLATFORM COMPETITION The most effective new innovations are re-combinations to solve specific customer problems and mobile apps are the best way to deliver this. Open APIs provide the opportunity to integrate multiple third-party features in an app that already has an audience

17 IT S BEEN NINE YEARS The first iphone was little more than a phone, web browser and mp3 player crammed into a single shell. Only later, with the launch of the app store, did it become clear that something deeper was changing. Uber remains the embodiment of the disruptive new services that became possible. Financial Times, 04.16

18 UBER AS DIGITAL ECO-SYSTEM Uber in 2016

19 AIRLINES AS END-TO-END DIGITAL ECOSYSTEMS The real disruptions of the future will come from the digital giants. While Lufthansa traditionally sees itself only as an airline, digital transformation drives the connectivity and interdependence of all mobility services. Products such as flights will be way more integrated in the future with other experiences. In such a scenario, it is important to understand and build eco-systems while proving the ability to share data and partner. Sebastian Herzog, Managing Director & Chief Strategist, Lufthansa Innovation Hub

20 AIRLINETRENDS» INSPIRATION FOR INNOVATION CONTEXT Economic Power Shift Demographics Value Competition Platform Competition Sustainability Trends emerge as innovators address basic human needs in new ways. EMPOWERED Connected Digital Choice Control Real-Time Transparency EXPERIENCES Expectations Convenience Hospitality Storytelling Human Brands

21 ABOUT AIRLINETRENDS 8, ,000 subscribers visitors/month ,500 airlines followers 200 5

22 TREND WORKSHOPS

23 PASSENGER EXPERIENCE CONFERENCE, 4 APRIL 2016 WANT TO WORK WITH US FOR PAXEX INNOVATION? JUST GET IN TOUCH! RAYMOND KOLLAU FOUNDER AIRLINETRENDS

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