Low cost long haul & digital transformation, the talk of the Aviation Festival

Fredrik Odeen

Senior Manager, New Carrier Strategy, Travel Channels, Amadeus IT Group

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As carriers such as Norwegian have demonstrated, Low Cost Long Haul (LCLH) is working, and it’s here to stay. What’s now important for the industry is how to collaborate effectively as airlines of all models consider how to respond.

What we’re already seeing are moves by connecting network and low cost airlines to partner at hub airports. For example, AirAsia X and Norwegian are already flying into Middle Eastern hubs.

At the Aviation Festival, held in London, we saw that there is potential for Emirates to adapt its offer to compete with LCLH operators. Interestingly, there’s potential to split its economy offering into four separate classes of service giving it greater flexibility to appeal to travellers who fly Low Cost Carriers (LCCs).

Other network carriers are also responding, with Qantas International’s CEO Gareth Evans discussing on stage how its subsidiary JetStar has increasingly become part of Qantas’ own network. Already taking the number two position in key Asian markets, like Japan and Vietnam, Jetstar is an integral part of Qantas’ network. The Australian flag carrier is now focused on a more consistent experience across the group.

Another trend discussed at the event is virtual interlining, which I expect to gain significant momentum. This sees an airline use technology to effectively ‘re-package’ connecting flight options.

With virtual interlining the aim is to present travellers with simple and accessible flight options across different airlines when booking multiple flights to get to their destination – without the need for a formal partnership between those carriers. What we’re seeing here is increased ‘virtual’ collaboration, enabled by technology.

But the impact of Digital Transformation doesn’t stop there. What became clear during the conference is the way airlines are presenting and shaping their offer is changing based on their ability to harness greater amounts of data about travellers.

Take Qantas’ new approach to disruption management, which sees its systems able to re-accommodate 4,000 passengers in an impressive 3 minutes. This type of innovation exemplifies the impact digital can have on the operational side of the business, as well as enhancing the traveller experience.

More broadly, what we’re seeing across our airline partners is that they’re re-thinking their fundamental approach to digital in a way that focuses on what travellers truly value. At Amadeus, we’re working closely with partners to enable just that.