Day 3 at T2RL – How airlines can win the race to manage disruptions

"Disruptions and delays used to be like death and taxes - passengers felt as though there was nothing they could do about them. Today, with access to social media, passengers feel empowered, so they expect more from airlines,” said Kevin O’Toole from Flight Global  In a paper launched this week by T2RL and sponsored by Amadeus,Airline Disruption Management , it was found that disruptions costs about 5% of airline revenue, or about $35 billion USD worldwide. However, when lost productivity is considered, the total is probably close to $60 billion.

For Amadeus’ Vincent Lacroix, the Head of Reservation, Flight and Disruption, the issue isn’t just about saving airlines money now, but about ensuring their future success as well. “

By putting the passenger at the centre of your recovery, you are looking at what the passenger means to your revenue not just in the present, but in the future. If a passenger feels that a disruption was dealt with properly, you can earn some serious customer loyalty. If he or she feels let down, you can lose a customer permanently,” he says.

Keeping Customers

T2RL ’s Ira Gershkoff, who authored the paper, said this is particularly crucial for high-value customers. If a passenger actually opts in to an added service or product when she purchases a flight, you need to ensure that this is taken into consideration when she is re-accommodated. “Irregular operations are one of the main obstacles to properly delivering an ancillary service,” he said.

Another big issue airlines need to consider with disruptions are their airline partners and interlining commitments.

So how do airlines deal with all these issues successfully? Lacroix says the travel industry needs to approach the issue like a four-leg relay race.

“Airlines need to first identify the scope of the issues, then to define a recovery plan, inform their passengers, and implement a recovery,” he said during the panel.

Recovery Plan:

1. The first runner has to identify the scope and the severity of the disruption. How many aircraft, crew and passengers are affected? And how severe is the impact? Is this a 15 minute delay or 6 hours?
2. The second runner can then start proposing a recovery scenario for operations. Armed with information about scope, an airline operations team can begin proposing solutions to the problem. Where can flights be rerouted, where will aircraft and crew be sent, how will disrupted passengers be accommodated and in which order will they be processed? “The objective is to get passengers to their final destination, especially the most valuable passengers, in the best time frame,” said Lacroix.
3. The third runner is making decisions based on different recovery scenarios provided by the technology and data at hand. “In the first two legs of this race, the runners are actually IT and data driven. The third leg of this race must be led by a human decision. Reality cannot be modeled completely, and you still need the expertise of the operations controller to make decisions and to manage exceptions,” said Lacroix.
4. Finally, the fourth runner is implementing the recovery scenario for airline operations and passengers. For ideal results, this leg of the race should be run across all airline touchpoints –through direct mobile contact with passengers, at the airport desk, and through call centres. Airlines may also want to consider partners in the travel industry, including other airlines which may be impacted through interlining, airports, hotels and taxi or transfer companies, for example.

“This involves a lot of transactions within the airline systems. And this is where airlines have the most opportunity to gain on productivity,” Lacroix says.

Technology Solutions

“Three of the runners are technology driven. Technology providers like Amadeus can provide solutions in order for the third runner to be able to make the best decision and for the fourth runner to cross the line in the best time frame. The prize for this run is a share of the $35 billion that disruption costs the industry, and hopefully, a big share of customer loyalty,” says Lacroix.

So the time when airlines avoided the topic of irregular operations like death and taxes has passed. The race has begun. Both cost savings and future revenues are at play. What strategies can airlines and technology providers put in place to stay ahead of the curve? We’ll be sharing more insight on disruption at the World Passenger Symposium in October.

Stay tuned.