How airlines are leveraging technology to enhance the passenger experience
An interview with Brian Richardson, Director, Inflight Entertainment & Wi-Fi at American Airlines President of APEX (Airline Passenger Experience Association)
If there was ever an industry more entrenched in the challenges of the Experience Economy than commercial airlines, I’d be hard pressed to identify it.
I took my first flight when I was eight years old, traveling with my grandmother to a seaside resort for a holiday. I don’t recall the specific details about it, but I vividly remember the excitement I felt going to the airport, boarding the plan, being given a meal at my seat, and then landing in an entirely different world.
Eight years later I took my first intercontinental flight from Helsinki to San Francisco on Finnair. I was fascinated by the fact that in just 10 hours
I could be on the other side of the planet. I immediately fell in love with Finnair and joined their frequent flier rewards program. I didn’t quite understand what that entailed but it made sense to me that if I flew regularly with them, I would be rewarded.
It was not until I joined PressReader that I started flying on a very regular basis — to the point that in a little under a decade I became a Million Miler with Air Canada — and well on track to being a two Million Miler.
Over my lifetime I have flown millions of miles across numerous carriers and I've learned a thing or two. I learned that the magic of taking a flight doesn't disappear the more you fly. When you land, you are still in awe at the fact that an aircraft took off in one place, defying gravity, and landed safely in a far-off destination. To this day, I am still excited about the experiences of air travel. What I look for is how airlines are transforming them, how they are evolving them.
I remember when Air Canada started installing lie-flat seats in business class, new seatback inflight entertainment systems, power outlets, and Wi-Fi. All these conveniences made the journey more enjoyable, more productive, and restful — an experience that I appreciate to this day.
Understanding the way technology is evolving and understanding the changes in consumer behavior, including my own, I'm interested to see what other changes are being made in the industry — an industry that faces ever-daunting challenges.
From the moment a person decides to travel, they enter into a complex maze of processes, procedures, and regulations designed to transport them safely from point A to B — an experience that is not always seamless and can take months or even years to bring it to fruition.
And throughout the entire journey — from booking, to check-in, to bag drop, to preboarding (security, immigration), to in-flight, then post-flight (baggage claim) and the same on the return trip — there are numerous opportunities and obstacles that can make or break the relationship between the airline and the passenger.
Airlines have a formidable mission and unique challenges few other consumer-focused businesses can fathom. Add to that the fact that changes in technology and human behavior are escalating at an alarming rate and you have an industry under constant scrutiny, criticism, and pressure to deliver more for less — more personalized experiences that meet the ever increasing demands of today’s traveler, with less money, time, and resources.
To dig deeper into these issues and discover what the industry is doing to address them, I had the pleasure of talking with Brian Richardson of American Airlines and APEX.
Brian, thank you for spending some time chatting about how airlines are leveraging technology and trends to meet the demands of passengers in the Experience Economy.
It’s a pleasure, Nikolay.
Let’s start with technology. Heading up to the APEX EXPO in Boston in September, I understand the Lufthansa FlyingLab will be presenting on its flight from Munich to Boston, new technologies that revolve around mobility, the passenger experience, and aviation technology — including VR, on-board streaming, and even a new high-tech blanket.
This is a great look at the future, but what about today? Where do you see most of the innovation happening now in the airline passenger experience?
I think we’re seeing a lot more airlines willing to try different things and trial new technologies.
Airlines used to be a little more conservative — unwilling to do something unless they could do it on all airplanes all the time, and operationally. But today airlines are more open to trying different things and seeing what customers think — get feedback, analyze the data, see how it impacts the operation, and determine if it drives significant improvement.
We're seeing in the industry, not surprisingly, a shift to the Bring Your Own Device (BYOD) model, whether it’s for accessing stored content on the plane or the traveler’s own content. The proliferation of connectivity has sped up things exponentially.
Onboard Wi-Fi started in North America with full coverage, and then it quickly went from being an amenity to an expectation by customers. Passengers expect to have connectivity once you have that pipe set up, especially high-speed Wi-Fi.
Airlines are also looking more and more at the complete customer journey. It's not just the inflight portion, it's on the ground, in the lounge, or at the gate. It's an app that takes passengers all the way through the journey and allows them to be entertained and access information about the flight.
Part of what causes anxiety for travelers is not having access to good information. So the more ways airlines can communicate what's going on with a person’s flight, baggage, connections, and upgrades, the less anxiety there is for the passenger.
BYOD certainly seems to be the future of travel, but there is still quite a bit of investment in backseat In-flight Entertainment (IFE) systems. How do you correlate the bringing of one’s own device as the future of digital travel with the continued investment into IFE?
I don't think they're mutually exclusive. From the American Airlines’ perspective, we have no plans to remove seatback screens on our long-haul flights. With flights that are 10 hours or more there's still an expectation of being entertained with a certain type of experience. I think at some point that may disappear as well, but I don't see that happening anytime soon.
When it comes to shorter flights, where there's an expectation of Wi-Fi and power, there’s also an expectation of BYOD support. Almost everyone who flies with us has a smartphone. A lot of them have laptops, or iPads, or some other kind of tablet. With all that variety, airlines face challenges trying to keep up with the technology, screen updates, and hardware changes.
In terms of the challenges with embedded systems, you run into roadblocks because it
can take years to retrofit a plane with a new program. By the time you put everything on a plane, you may fly it for a few years and then it’s already time to upgrade the thing. Whereas if you bring your own device, we can still provide you all the tools (the power, the high-speed Wi-Fi) and you can update your own device as needed.
I still think they both can live together, and I think there are definitely benefits for seatback screens. I know Delta has gone into that, as has JetBlue. You're going to have higher utility of a seatback screen versus bringing your own device. Airlines are able to communicate easier when passengers have screens right in front of them. But as you start installing tablet holders and power (which American and United are doing), you set the expectation for what customers need to bring versus what’s already there.
It won't take long for customers to get it. If travelers have Wi-Fi to support live TV streaming and other entertainment on their own device, they’re going to get more and more comfortable with the concept. It's just a matter of timing. Do you see Wi-Fi as a revenue-generating source for airlines? It's not going to be a huge revenue line for any airline. It's table stakes; it’s what your customers expect and the minimum you need to offer.
The problem is that it's not just the bandwidth you're paying for — it’s the hardware, the weight of the system, the fuel burn, and the operation. It's all those things together.
Airlines can maybe make some money or break even, but I don’t think selling the passes is where they’re going to make a lot of money. Now,
I do think having high-speed Wi-Fi opens up opportunities for more partnerships, marketing, sponsorships, and personalization however. That can start driving more additional revenue.
But again, in North America, you have to have Wi-Fi. It's like having a lavatory onboard. You've got to have Wi-Fi, and if you don't, customers are going to revolt.
In 2016 when PressReader partnered with APEX on the “The Future of Newspapers and Magazines in Flight” study, we learned that 70% of APEX members have already stopped offering printed media onboard or plan to stop within the next 3-5 years.
In our 2017 survey of Forbes Travel Guide hotels, the results were very similar. Transitioning to digital media was being done, not only to offer customers more content choices and reduce the cost of print, but also to gain access to customer data that could later be leveraged for future revenue opportunities.
What was interesting to us, when we spoke to the outgoing CEO of Forbes Travel Guide in July, is that the numbers from the survey 18 months ago had changed significantly and that the changeover to digital had accelerated.
Is this true for airlines? Is this transition moving faster than what was forecasted in 2016?
We still have newspapers today because some of our customers like to get a printed paper before takeoff and flip through it without having to take out their device. Some customers like the tactile nature of print and it’s a standard part of their boarding experience. So from that perspective, I think there's still some value to it.
But I don't think they're mutually exclusive. Different customers and different demographics have different ways of doing things — different comfort levels with technology. Which is why we’ve been talking with your team at PressReader for a while now about rolling out digital media starting in our clubs and moving from there.
Because as more and more people move to having connectivity, bringing their own
devices, and utilizing different locations, I think digital media is going to get more and more popular. I think airlines will continue to shift that way because there are lots of benefits to not bringing papers onboard in terms of weight, operations, and costs.
I don't know that one necessarily eliminates the other, if that makes sense.
Yeah, it does because you give passengers a choice, right? You address every passenger’s needs by offering a number of products. Actually, we were just talking with your oneworld alliance partner, Cathay Pacific, and discovered that they assumed their premium class passengers would prefer to stick with printed media on board and in lounges, but in fact they were the customers who adopted PressReader the fastest. They were the most familiar with other digital offerings Cathay has such as their app and appreciated the broader choice of newspapers and magazines.
That's interesting. I think there's a bit of a learning curve, right? With a seatback system, it’s right there and you don’t have to teach people anything. But with BYOD, it’s invisible.
You have to tell people it's there and you have to explain what it is and how to use it. They have to have a certain amount of technical aptitude to be able to do it, they have to have the device, and they have to have power.
So there are a few more hurdles you have to overcome especially with older demographics. But as our technology improves and becomes more and more seamless, and as we improve our offerings, it's going to shift more and more that way.
Let's segway to the younger demographic — millennials. From your perspective, are there differences in how they behave and the expectations they have with respect to pre-board and post-flight experiences compared to the older generations?
I think in some cases the expectations are higher with millennials. In terms of having high-speed Wi-Fi, seamless experiences, and not having to jump through a bunch of hoops, I think there's that.
Younger travelers have all the right devices, and are able to understand how to download what they want or need with minimal explanation required. They also tend to read less and prepare a little less in terms of pre-departure emails. They expect it all to be in the app and to have it right there on their phone so they don’t have to dig around for it. They expect to be able to access their boarding pass on their Apple Watch.
With American Airlines, passengers can now ask Alexa what entertainment’s going to be on their flight. Alexa or other similar technologies are going to be big here in the future.
In terms of customer communications, we do more and more through social media. I hardly see emails anymore. It's almost all social media, which makes a lot of sense. It's
a lot faster and a lot more efficient. In terms of responding to a concern, complaint or compliment, it’s the most effective and fastest way of routing the comment to right person to resolve.
I’ve experienced the effectiveness of social media in customer support myself. About a year ago I commented on Facebook that I had one of the most incredible flights with Air Canada. Within three minutes, I had a response from the airline, wanting to know more details. Then they reached out offline and asked me who on the flight made it special. That person then received a commendation from the airline.
In the past, making a comment would require writing a letter, searching for the right address, and figuring out who to send it to. Social media really has changed the way we communicate and how responsive we are to feedback.
Absolutely. It really is helpful here too. If there's a problem, I feel like I see it almost instantly from my chair — almost faster than I can get it from flight attendants or from the crew. For people connected on board, if a movie's not playing or there's an issue during the flight, they'll get bounced to us faster through social media than through any other channel.
When we were talking with Forbes Travel Guide, they observed that both older and younger generations appreciate the luxury of having a butler. But millennials don’t want somebody shadowing them all the time; if they need something, they expect the hotel to respond to it straightaway. Is this same true in air travel?
Absolutely. That's what social media has been able to help with a bit. I think there's less of a desire for the human touch in person; digitally is much more accepted and preferred.
I spent two years working for travel agencies when I was in university. I fell in love with the travel industry. I've learned both Sabre and Amadeus, and the efficiency with which you can come up with search results was amazing.
So when online travel agencies (OTAs like Expedia) started up, I, as a regular consumer, was again able to hold that power in my hands. I was able to mix and match segments, fly different carriers and non-alliance partners, and have it all combined into a single fare. That was something that I could never really do through an airline's site.
But then, being in the industry, I also realized that it has changed the relationship between me and an airline. And as much as I was loyal to a certain carrier and the carrier pretty much knew everything about me, if I was booking through an OTA for flights on other carriers, they knew nothing about me.
They couldn't really get in touch with me before the flight, let alone post-flight — something I think a lot of us are missing. And it's not just the airline’s request for feedback, but something more personalized post-flight upon which we can start building advocacy and loyalty.
Now, putting your American Airlines hat on, how do you see that relationship between your airline and various OTAs evolving going forward?
I can speak to it to some extent, but I'm not in the distribution area of American. I actually used to work at Travelocity before I came to American. So I have a little experience in that side of things.
I think the relationship between airlines and OTAs has definitely shifted over time. There was a time where OTAs were seen as a big threat to direct bookings. There were concerns that all the right information (fees, benefits, amenities, etc.) wasn’t being communicated as well as it should be. I think that has shifted over time, and while
there's still the general thought that going through direct channels would be better — where we're able to communicate and have a direct conversation with the customer — I think there's more and more openness with the OTAs in terms of being able to push through information about our flights, or other airlines' flights.
In terms of communicating better, we recognize that different customers either want to, or need to, shop in different ways. For example, corporate customers may have certain booking tools they need to use, while some customers just prefer to use a third party website for comparing multiple airline offers.
I think it has become more of a partnership than a negative relationship between OTAs and airlines, and I expect that to continue.
The communication of information about flights, both in our direct channel as well as through third party channels, is more and more critical — i.e. communicating the difference between a lie-flat seat and a non-lie-flat seat, between high-speed Wi-Fi and regular Wi-Fi, the availability of seatback entertainment, support for BYOD, live TV, etc. Understanding those kinds of things and their associated fees makes a difference when someone goes to book, beyond just schedule and the price (which historically was all there really was).
Do you see OTAs responding positively? Because at the end of the day what I'm sensing is that you're putting the passenger in the center of that decision-making. You want the passenger to be fully aware of what they're getting themselves into and actually be excited about the amenities that you're offering.
I think that has improved over time, and I think OTAs have a desire to do it.
From an airline perspective, we want to have customers pay for the premium cabin. We're interested in them looking to buy additional services as well and knowing exactly what they're getting, especially if they're comparing multiple airlines.
I think that has improved, and I think there is a desire, at least from what I've seen and heard, from OTAs to try to provide that kind of information to customers so they can choose better.
That's awesome because, again, speaking to the hospitality side of things, it doesn't seem like they're seeing the same responsiveness from OTAs. In fact, the outgoing CEO of Forbes Travel Guide said that there is a war brewing between the luxury hotels and OTAs.
In terms of having to hold inventory and that kind of thing, I think hotels have been in a bit of a different situation. So, I'm not surprised at that at all, especially as mergers happen and there are fewer hotels that can go it on their own.
Absolutely. All right, let's talk about the future. Is the future bright for the airline industry?
Yeah, I think so. We've definitely gone through a period of consolidation, bankruptcies, and mergers.
What’s come out of that are airlines that are more economically viable, having made some logical decisions on their product from end to end. There are obviously unknowns in terms of fuel prices and other things that can impact the industry, but I don't think you'll see quite the rollercoaster that we have had over the previous 20 years, and long periods of airlines losing lots and lots of money. I think we may be past that.
There is more of a focus now on building up ancillary revenues and doing things that make sense for the customer.
How do you see the Low Cost Carriers (LCC) playing into this going forward?
There's definitely a place for them. We need to look at what the differences are in terms of product. If you're serving a customer who is purely looking for the lowest price and doing things like avoiding bringing bags on the planes to cut costs, I think there's definitely a home.
Secondary airports and certainly niches have been carved out and I think they'll continue.
For the larger airlines, they will continue to be aggressive to keep customers and potentially offer a differentiated product based on price — such as offering a basic economy seat, or a main cabin extra seat, or a premium economy seat, or a first class seat, and then letting customers choose their experience a bit more.
With low cost carriers you're buying into one specific experience, but for some flights and for some routes it may make sense for some customers.
I don't know if you agree with this or not, but we've been looking at the general consumers patterns, and we're seeing that we live in a very egocentric world where it's all about me. As a consumer, I want to see that products being offered to me are personalized to my likes and my passions.
Both Cathay and Air Canada are investing in knowing more about the customer so that they can anticipate their specific needs better — for example, their favorite drink or meal preferences.
How do you see that expectation of being served on a personal level evolving in the airline space?
I think that will only happen more and more. A lot has been done in terms of giving more information to flight attendants on devices that are loaded with information about who is on board, where they’re sitting, and their status. This kind of information will be expanded to include their preferences.
I think customers appreciate it, but you don't want to be creepy about it. You have to have balance and find the opportunities where you can surprise and delight them by having things ready and prepared.
I think from a content perspective, I think you're getting closer and closer to that. In the same way Netflix figures out what people like, I think you’ll see more of that kind of personalized content onboard.
When it comes to advertising, we have to stop trying to sell a credit card to someone who already has that card. We need to be smarter about those things versus the current shotgun approach.
But it's tricky. A large airline that has 1,500 aircraft that are all different ages with different systems makes doing it more difficult. You don't want to go out and try to personalize the experience and then screw it up by personalizing the wrong thing. You’ve got to get it right.
We've been able to do it for our highest Concierge Key where there are a lot of personal touches and personalization happening. And it will continue to expand, making customers feel more valued. With personalization and knowing customers better, you can also drive more loyalty.
It’s good for the airline too because if I know what you like to eat and drink, maybe I can save a little bit of money by not bringing as much stuff onboard.
Do you work with the startup community in looking at what's being developed? The reason why I'm asking is Cathay talked a lot about the investment that they've made in the Hong Kong local startup scene, and they run annual hackathons, and there are a number of ideas that have been developed that they've adopted.
Absolutely. We do hackathons as well here at headquarters, and I know there are a lot of cool things happening — from potentially using drones to look for external cracks on the fuselage to virtual reality applications.
Our digital team is constantly looking at everything from app enhancements to inflight entertainment, connectivity, and other onboard products. We also have a lot of conversations at conferences trying to see if there is a fit for new technology, not just for our own airlines, but for the industry as a whole — technology that might help legacy suppliers find new ways to improve what they do, for example.
All right, last question: What keeps you awake at night?
I think it's the complexity of it. We have great strategies, great ideas, and plans. But there is
just so much complexity in our product. Someone once made the comparison, “Wouldn't it be so much easier if we just made shampoo? You make shampoo, you put it in the bottle, and you get it into the stores.”
Ours is an end-to-end experience from the date of purchase, which could be a year before the actual flight, to the inflight experience, to post-flight. All along this journey, things could potentially go wrong.
So for me, complexity and inconsistency comes with things like mergers. Providing a consistent and great experience for all our customers is challenging, but it's work that I love. And I think customers really do appreciate the effort when you strive to make a difference every day in what you do.
That’s awesome. Brian, thanks so much for sharing your thoughts and insights. I know from the work you do at American Airlines and in your role as President of APEX, you have a passion for what you're doing — a passion that I’m sure translates very well for today’s discerning passengers.
I look forward to meeting up with you at the upcoming APEX conference in Boston. Brian’s team is responsible for the future vision, product selection, ongoing operation and marketing of inflight entertainment and connectivity products at the world’s largest airline.
Prior to this, Brian was a member of the first Merchandising Strategy group at American, developing new ancillary products and services. Before joining American in 2006, he worked in marketing at Dell and at Travelocity.
He holds a degree with a focus in Public Relations, from University of Texas in Austin and an MBA from the McCombs School of Business.
Brian Richardson Director, Inflight Entertainment & Wi-Fi at American Airlines and President APEX