Africa’s tourism bounce back will need healthy hotel pipeline

Africa’s tourism industry is targeting a post-covid recovery which will require an uptick in hotel developments.

The issue was discussed at the recent Africa Tourism Leadership Forum held in the Botswanian capital, Gaborone, with the country’s president, Dr Mokgweetsi Masisi, setting out the market’s aims.

2024 recovery

Masisi addressed delegates in a keynote speech, saying: “Our continent is renowned for its beauty and the quality of establishments and high service excellence. However, to harness this potential we have to work together. The only way to achieve success and unprecedented tourism growth, and job creation, is by coming together, capitalising on each other’s strengths and working as one.

“This I believe will get the tourism industry back to its pre-pandemic and 2019 performance levels, which we hope should be reached by 2024.”

Pipeline peak

After covid hit Africa hard, most countries on the continent have now eased restrictions, making it easier for travellers to visit. Of course, the hotel sector will be vital in bringing about a bounceback, and according to the TOPHOTELPROJECTS database, there are already at least 267 high end projects in the pipeline, totalling 56,661 rooms.

Current completion peaks will definitely help to reach the recovery target year, as 2023 deliveries lead the pack with 94 high end projects finishing, approximately 35% of this market’s pipeline. 49 sites will complete in 2024 itself, while third in the list is this year, with another 35 deliveries. A further 89 hotels on the books have either yet to receive an end date or will complete in 2025 and beyond.

In terms of segments, the data is fairly evenly split between upscale and luxury builds, with 140 (52%) of sites in the four star category, while the remaining 127/48% are five stars.

Leading countries

Geographically, Egypt is top of the high end hotel stakes in Africa, with at least 58 projects underway. Fellow north African nation, Morocco, takes the runner’s up spot with 29 properties, while Nigeria the only sub-Saharan country making the podium, on 22 sites.

Drilling down into individual cities, we find that it’s the battle of the capitals, Egypt’s Cairo likewise heading the list on 15 hotels, while Ethiopia’s capital Addis Ababa is closely behind on 12 sites, alongside Kenyan capital Nairobi with 11 properties.

Grand brands

Specific brands making a splash in the continent are led by Hilton Hotels & Resorts, with 18 high end projects underway. In second place is Radisson Hotels & Resorts, constructing at least 16 hotels, with Accor group’s Novotel rounding out the top three with 12 sites.

Epitomising these major marques’ constructions are projects including Hilton Secon Nile Tower, a 257-room hotel taking shape as part of the two Secon Nile Towers, a mixed use development in Cairo. The site is due to complete by the end of this year.

Another exemplar of the continent’s leading hotel brands is the 184-key Radisson Hotel La Baie d’Alger underway in Algerian capital, Algiers. The hotel – consisting of standard rooms, junior suites and suites – will feature a modern all-day dining restaurant, a lobby lounge, a fully equipped gym and spa and 308 sq m of meetings and events space.

And in the Novotel stable, the 200-guestroom Novotel Abidjan Marcory will be delivered in Abidjan, on Ivory Coast’s southern Atlantic shore, in Q3 2023. It is a dual development alongside the 110-key Adagio Abidjan Marcory. 

Source: Top Hotel News

Analysis: What is needed to unlock tourism potentials

Dar es Salaam. Amid the country’s target to reach $6 billion in tourism revenue by 2025, Tanzania is required to upgrade and improve its tourism related infrastructure and services, thus grow the sector and achieve its ambition.

This includes having adequate supply of skilled manpower and capital for infrastructure development, reducing multiplicity in levies and taxes as well as diversified tourism products and sourcing cheap financing.

The suggestions are according to analysis by Breakthrough Attorney and PwC Tanzania dubbed: ‘Investment update: A look into the tourism sector in Tanzania – policy, law, incentive, and strategy,’ and ‘The future of Tourism in Tanzania,’ respectively.

Breakthrough was of the view that inadequate skilled manpower, affects the handling of both the wildlife and tourists management at the hotel level, thus negatively affecting the quality of customer service rendered to tourists.

On the other hand, with lacking investment capital as far as developing the sector’s infrastructures which includes roads, decent accommodation facilities, and investing into researching, and other such environment, it is harder for the sector to thrive.

Other areas that legal experts think should be appropriately addressed for the sector to flourish, include addressing poaching issues as the awful act reduces the number of animals in National parks and Game reserves.

But Ms Zainab Msimbe, a partner with PwC Tanzania doubts the sector’s competitiveness and sustainability as it faces persisted bottlenecks that need to be tackled if the sector is to be improved.

“These include limited access to cheap financing, inadequate tourism infrastructure, a multiplicity of levies, insufficient diversity in product offerings, and lack of sufficient hotel and airport facilities,” she said.

According to her, Tanzania needs to re-examine its tourism taxes and levies so as to reduce multiplicity and create competitiveness across the region as the country is deemed to be an expensive destination compared with South Africa and Kenya.

Tanzania ranks higher than Kenya with respect to safety and security, but lower than Kenya when it comes to tourist service infrastructure.

“For instance, the drive from Dar es Salaam to Selous Game Reserve, the largest game reserve in Africa, is bumpy and long, taking an average of 7-8 hours,” the report reads in part.

Therefore, the study adds: “Flying is a better option and the fastest way to get to Selous. However, it is the most expensive and hence suits more high-end tourists.”

On the other hand, more effort is required to attract private sector investment in hotels and ensure diversity in the offered services.

The current hotel capacity in Mainland and Zanzibar cannot cater for the expected influx of 5 million tourists by 2025, and that improvement in efficiencies and flight handling capacity at the airports is another area which requires fixing.

Automation of immigration procedures in Zanzibar and Kilimanjaro Airports will help fast track the process. Instead of having a paperwork checking system, barcodes should be set to scan all the documents. This will help to reduce unnecessary queues at the airports during high season.

Other than wildlife and beaches, the Ministry for Tourism should spearhead the innovation of new tourist attractions.

Media reports indicate that major source markets for Tanzania’s international tourism are the USA, which accounts for 13.2 percent, the UK representing at least 9.5 percent, with the remaining percentage representing other countries.

Data captured by the immigration department by August this year, indicates that in the period between January to July this year, Tanzania registered 742,133 tourists, a 62.7 percent increase compared to the same period last year. It is noted that Tanzania ranked tenth among fifty African countries in tourism growth. By, April 2020, tourism earnings accounted for more than 24 percent of the total share of exports, making tourism the second largest foreign exchange earner after agriculture.

Source: The Citizen

Uganda Airlines Will Start Flying To Nigeria Next Month

Uganda Airlines is expanding its reach into West Africa with the launch of flights to Nigeria in December, according to Business Insider.

New connections

Speaking at the 18th Akwaaba Africa Travel and Tourism Market, airline chief executive Jenifer Bamuturaki confirmed that flights to Lagos will commence before the end of 2022, with further flights to Abuja launching in 2023. Firm dates and frequencies are yet to be announced.

“I am happy to tell you that we, the Uganda Airlines, will begin our flights to Nigeria for the first time in history in December 2022,” said Bamuturaki.

“This will be our first flight to West Africa; we will begin that and then begin to grow slowly. When we come to Nigeria, we will be working through recognized travel agents and tour operators.”

The flag carrier currently offers 11 routes out of its hub in Entebbe, covering an array of destinations across Africa and the Middle East. The thrice-weekly flights to London Heathrow Airport have yet to be given the green light despite significant demand, with no potential launch dates announced. Its planned Guangzhou service also appears to be shelved amid ongoing COVID-19 restrictions within the country.

Uganda Airlines has been approached for further information.

During her keynote speech, Bamuturaki confirmed that the carrier was facing issues following increased aviation fuel prices. She added that the airline has managed the situation through the increase in sales of holiday packages and had no plans to increase airfares.

Women in aviation

This week’s event also saw Bamuturaki become a recipient of the 100 African Women in Travel and Tourism Award, celebrating diversity within the industry. Bamuturaki commended the conference convenor Ikechi Uko for the recognition, choosing to dedicate her award to Africa, young people interested in aviation, and Ugandan women for “pushing forward and striving against all odds.”

“I feel so honoured because we are not many women in leadership in the aviation industry. So, to be recognised is a good thing. This is a win for women,” she added.

Officially taking the reins of Uganda Airlines back in July, Bamuturaki took over from Cornwell Muleya, who was fired from the role in February pending investigation for mismanagement of public funds and irregular hiring practices.

Bamuturaki was tasked with revamping the airline, taking on a significant loss margin of UGX 232 billion ($61 million) in 2021. She has notably pushed for its continued growth and network expansion into Asia and Europe.

In August, Bamuturaki faced a parliamentary committee regarding concerns over her suitability for the role due to a lack of postgraduate training. She subsequently disputed the claims, noting that she had been appointed as CEO directly, with her team having a combined 100 years of work experience.

Source: Simple Flying

SAA expands regional operations, aims to return long-haul flights in Q1 2023

South African Airways (SAA) has announced plans to expand its regional network across Southern Africa, with additional routes to be revealed “in the coming weeks”. The carrier also announced that it aims to relaunch its intercontinental operations during the first quarter of 2023. 

In a statement published on the airline’s website, SAA confirmed plans to introduce “flights to Blantyre and Lilongwe in Malawi, Windhoek in Namibia, and Victoria Falls, in Zimbabwe before the start of the festive season”. 

SAA will increase frequencies on its current domestic and regional networks, as part of its second phase of post-COVID restart operations, which commenced 13 months ago. This includes “increased frequencies to Accra in Ghana, Cape Town, Durban, Harare in Zimbabwe, Lusaka in Zambia, Mauritius and Kinshasa in the DRC,” the airline said.  

The airline is also preparing to restart international operations by launching its first post-COVID intercontinental route during the first quarter of 2023.  

SAA currently operates seven Airbus aircraft, including two A320s, three A319s, one A330-300 and one A340-300. The airline will add an additional three A320 narrowbodies and will exit its A319 fleet in 2023.  

South African Airways retains traffic rights to its historic routes  

Meanwhile, the International Air Services Council (IASC) has ruled that the flag carrier be allowed to retain its traffic rights to all of its historical routes.  

The IASC is part of South Africa’s Department of Transport, and is mandated under the International Air Services Licensing Act, which regulates and controls international air services in the country.  

In September 2022, the IASC cancelled SAA’s flight frequencies on some routes due to inactivity for a period of more than three months, according to News24.    

The IASC cancelled SAA’s additional frequencies to Harare, Kinshasha, Mauritius, Lagos, Accra, Lusaka, and Luanda, Nairobi, Lilongwe, Blantyre, Victoria Falls, Windhoek, Entebbe, Livingstone.  

However, the regulatory body did not cancel the flag carrier’s routes to Dar es Salaam, Abuja, Maputo, Abidjan, Washington DC, New York, Frankfurt, Perth, London, and Sao Paulo, even though the airline had not been operating them.  

South African Airways entered business rescue on December 6, 2019, existing on April 30, 2021, having cut 80% of its workforce and slashing its fleet size by about 75%. The carrier restarted commercial operations on a much smaller scale in September 2021, with plans to grow both its fleet and route network.   

“As we increase fleet size to match the needs of the growing network schedule, we are encouraged that our strategy to cautiously re-enter markets abandoned due to the Covid pandemic has served us very well during the past twelve month, and we will continue to follow that cautious risk-adjusted trajectory,” SAA Chief Commercial Officer Tebogo Tsimane said in a statement on October 12, 2022. 

Source: Aerotime Hub

Dubai: Traffic system slashes travel time on roads by 20%

235 surveillance cameras, 112 dynamic message signs help beat congestion on highways

Dubai’s ‘Intelligent Traffic System’ (ITS) has helped cut travel time on key highways and roads by about 20 per cent. The project has improved incident monitoring by 63 per cent and helped reduce emergency response time by 30 per cent.

According to the Roads and Transport Authority (RTA), these were made possible thanks to dynamic overhead message signs on roads and linking the authority’s Enterprise Command and Control Centre with the Dubai Police’s Command and Control Centre.

Mattar Al Tayer, director-general and chairman of the Board of Executive Directors of the RTA, said the initial phase of the ITS project expanded coverage of Dubai’s main road network from 11 to 60 per cent. The RTA is now gearing up for the second phase of the project over the next few months, which will cover all the main roads of the emirate. The total length of roads covered by the ITS in Dubai will jump from 480km to 710km.

The initial phase saw upgrading and installing 112 dynamic message signs that relay real-time information to motorists about road conditions such as congestions and incidents. They also transmit messages, guidance, and key tips about traffic safety and event management to enhance the efficiency of traffic management. The signs are located in selected locations along Dubai roads as well as sites leading to mega events. For instance, 623 messages were displayed on signs around Expo 2020 Dubai.

The first phase also involved the installation of traffic monitoring and data capturing systems, including the installation of 116 traffic cameras. This brings the total number of surveillance cameras to 235. Hundred incidents detection and vehicle counting devices were installed, which raises the total number to 235. About 115 transit time and speed computing devices were installed, along with 17 Road Weather Information Systems (RWIS).

“Expanding the ITS coverage is a key element in supporting the government’s drive to transform Dubai into the smartest city in the world, which involves the use of smart technologies and software to ease mobility,” said Al Tayer.

The Dubai ITS Centre is one of the largest and most sophisticated traffic control centres worldwide. It manages traffic movement in the emirate using the latest applications of artificial intelligence, big data, Internet of Things, and communication systems. “It has a whole host of traffic-monitoring devices, information-capturing gadgets, and other smart services. Through ITS, the centre manages current and future road networks all over Dubai,” added Al Tayer.

The centre’s advanced iTraffic system, which is linked with field devices, works under an integrated technology platform to collect and analyse big data. It also supports instant decisions to manage traffic movement, incidents, and mega events.

Works completed also included the construction of a 660-km long fibre-optic network for communication between on-site devices and central systems. The total length of the optical fibre network is now 820km.

The project also included upgrading the software of the advanced central traffic system that supports decision-making and provides an automatic response line. The central system integrates with field devices, analyses the data received, and activates appropriate plans.

Source: Khaleej Times

Why booking travel on your phone is a bad idea

Since the first iPhone launched 15 years ago, consumer shopping habits have slowly but relentlessly shifted toward mobile devices. According to a survey of 3,250 U.S. consumers from Pymnts.com, a website dedicated to analyzing the role of payments in new tech, the majority of travel service purchases (51.4%) were made on a mobile device in February 2022.

The trend is even starker among younger shoppers. About 48% of millennials ages 25-40 prefer using mobile phones for online shopping, compared with only 34% of all shoppers globally, according to a 2021 survey of 13,000 shoppers from Klarna, an online payment company.

So, it seems that shopping for travel on an old-fashioned computer will eventually go the way of the horse and buggy. Indeed, some travel shopping services, such as the travel search engine Hopper, offer only in-app shopping for certain bookings, leaving desktop users high and dry.

However, while buying a flight on a phone is more convenient, it could be more costly.

Watch out for drip pricing

The rise in mobile shopping in the past decade has coincided with a sea change in how travel brands earn revenue. Add-on fees, including baggage and seat selection fees on flights and cleaning and resort fees with lodging, have become more common and pricey. U.S. airlines collected $5.3 billion in baggage fees alone in 2021, according to the Bureau of Transportation Statistics.

However, a 2021 study in the journal Marketing Science found that shoppers tend to make suboptimal decisions under these “drip pricing” situations, that is, when hidden fees are tacked on throughout the checkout process. Shoppers tend to compare initial prices across competitors, which are low, rather than the higher final price.

“When firms employ a drip pricing strategy, the initial price is almost always lower than a competitor’s all-in price,” said Shelle Santana, assistant professor of marketing at Bentley University and one of the study’s authors, in an email interview. “But once they start to add on amenities such as a checked bag, seat options, etc., that difference in price across firms diminishes and sometimes reverses.”

Anyone who has shopped for airfare on a budget airline such as Spirit or Frontier knows exactly how this “drip pricing” plays out. Yet what surprised Santana and her colleagues was how unwilling customers were to compare alternatives, even after the final price had risen.

“Consumers perceive high search costs associated with starting their decision process over, and they think they will save less money than they actually will,” Santana said.

Basically, shoppers tend to get to the final checkout screen and grudgingly accept whatever fees have been added on. They assume it will be too much hassle to start over and find another option, even if doing so would save them money.

The wrong tool for the job

Shopping on mobile devices is quick and easy for simple purchases, like ordering cat food or paying a bill. Yet shopping for travel is far from simple, and it usually requires switching between several tabs and apps to find the best deal.

Consider the common decision of whether to purchase a flight with either cash or reward miles. This involves several steps. First, you’ll need to search on the airline app or website for award availability, likely while switching to a personal calendar to check dates. Then, you’ll search on a third-party flight tool, such as Google Flights, for estimated cash fares before determining the value of the redemption in miles versus dollars. Once you’ve determined the best option, you’ll then need to navigate through the entire checkout process from both cash and award flight options to determine the true final price.

Maybe some fleet-fingered Gen Zers can manage this task on a mobile device. But for many, it’s too daunting.

Indeed, a 2018 study in the Journal of Marketing followed nearly a million sessions on a shopping website and found that shoppers who switched from a phone to computer completed their transactions at a higher conversion rate. Interestingly, this higher conversion rate effect was even more true for higher priced or risky products.

So, even if you like scrolling for flights on your phone, or if you feel overwhelmed by the mobile-based options, follow the advice of the experts who prefer booking travel — which can be both expensive and risky — using a computer.

“I almost always shop for travel on a desktop,” said Santana. “I like to have several tabs open at once and toggle between them to make sure I understand price differences and drivers across firms.”

Source: Mountain View Today

Kenya Unveils ‘The Real Deal’ Campaign In India To Accelerate Arrivals

Through the destination marketer, Kenya Tourism Board (KTB), Kenya has unveiled its global marketing campaign – ‘The Real Deal’ that will carry vivid visuals across key digital platforms to maximise reach and destination awareness and accelerate Indian arrivals to Kenya in the upcoming years.

The Real Deal campaign has been conceptualised to exhibit the multiple facets of destination Kenya and spread awareness of its latest tourism products and experiences through promoting on – chosen OTT platforms pan India, Theatre screens and digital billboards across select areas in Delhi and Mumbai.

To ensure the campaign’s holistic reach while also driving conversions, KTB has also collaborated with Kenya Airways and five leading tour operators including Thomas Cook, SOTC, Yatra, Make My Trip and Ease My Trip. The partners will be influential in promoting Kenya through varied packages and discounted airfares, which will be communicated across their websites and social media pages. This will be with an aim to redirect the interested travellers to the landing page from which they can plan their upcoming travel to Kenya.

Collectively, the partners and their respective platforms will be instrumental in executing the campaign and positioning Kenya as ‘The Real Deal’ amongst holidaying destination. India is ranked fifth as a source market following USA, Uganda, UK and Tanzania. Kenya has recorded consistent footfalls from the India market even during the past two years owing to multiple favourable reasons including – direct flight connectivity from Mumbai, ease in visa application, flexible COVID-19 entry-exit rule while maintaining health and safety measures and lastly the destination’s array of adventurous activities and unique cultural attractions.

During January to October 2022, Kenya has witnessed 924,303 tourist arrivals out of which Indian arrivals were 55,761. Provided the positive numbers and India as an exponentially growing market for outbound tourism, KTB aims to capitalise on the luxury and family segments and direct the traffic to Kenya by establishing it as an ideal long-haul holiday destination.

Dr. Betty Radier, CEO, KTB, expressed, her confidence in the campaign stating that India was one of the key destinations showing great promise in the recovery of tourism in Kenya and that the campaign will give impetus to the existing interest amongst Indian travellers on the destination.

“India was one of the most hit countries by Covid-19, especially the delta virus that said, they have critical steps that create confidence to travel, for example they are the country with the most vaccinated people. We chose India for the launch because of the immense potential as a key source market and also the fact that Indians love our products, from Safari to Beach and also adventure,” Said Dr. Radier.

Adding to it, Neeti Sharma, Director, Intrepid Marketing & Communications, said, “Kenya as a destination is brimming with aspirational quotient owing to its gamut of once-in-a-lifetime and authentic experiences. ‘The Real Deal’ campaign is a true expression of Kenya’s vast canvas, and we are certain that the strategic activations across media channels along with the efforts of our key partners, will tempt the travellers and result in accelerated rate of arrivals.”

The Real Deal’ campaign has been executed in the USA and UK markets and has been successful in positioning Kenya and driving footfalls to the magical destination.

Source: Travel Biz

Nigeria releases more funds to airlines, urges ceasefire on flight suspensions

Nigeria is set to release $120 million of foreign airlines’ ticket revenues, reducing the outstanding debt owed to international airlines operating in the country.   

During a meeting with aviation industry representatives on October 24, 2022, Godwin Emefiele, Governor of the Central Bank of Nigeria (CBN), announced that an amount of $120 million will be released on October 31, 2022, according to a Premium Times report. 

The fresh amount of $120 million comes after the central bank resolved to release $265 million to foreign airlines, starting from August 27, 2022. 

Tensions have been high in Nigeria over the issue, with major carriers saying they will reduce services to the country unless funds were released. Emefiele accused airlines of blackmailing Nigeria and said countries should allow more flights by Nigerian carriers.  

Samson Fatokun, a representative of IATA and also present at the meeting on October 24, 2022, stated that up to $700 million was still trapped in Nigeria, however. 

“What we have right now is $700 million. Our balance is $700 million,” said Fatokun, according to the Premium Times report, saying that airlines were being “reasonable” in asking for a plan for the funds to be repatriated.  

The CBN’s Emefiele explained that the first $265 million comprised of $110 million, which was allocated on the spot and the remainder in a period of 60 days. 

“On that day, we allocated to IATA; $32 million through UBA. Qatar Airways; $22.8 million through Standard Chartered, Emirates; $19.6 million through Access Bank, British Airway; $5.5 million through GTB, Virgin Atlantic; $4.8 million through Zenith and others,” said Emefiele according to the Premium Times report. 

Nigeria calls “ceasefire” on flight suspensions 

In a statement, the House of Representatives of the Federal Republic of Nigeria confirmed that an understanding had been reached during the October 24 meeting to resolve the issue of trapped funds, with payments in phases until the end of December 2022. 

“We are here to protect you and at the same time uphold the integrity of Nigeria. Give us a couple of months to see what we can do to reduce the backlog with the help of the CBN,” said Femi Gbajaniamila, Speaker of the House of Representatives in the statement. 

The parties at the meeting, including the Nigerian aviation minister, representatives of Nigerian airlines and IATA, also reached an understanding that “threats” by airlines to suspend operations or “make flight booking a nightmare to Nigerians” should be put on hold.  

“Can the airlines suspend action for now and continue business till the December outlook,” Gbajaniamila said. “I don’t want a situation when you start a fight and you never know how it will end.” 

Gbajaniamila added, “So, we have a loose understanding to call this a ceasefire, while all the other issues are being looked into as well.”  

Emirates Airlines has announced that October 28 would be its last day of flight operations out of Nigeria. The meeting urged the airline to extend this deadline, considering efforts to release the trapped funds. 

IATA, which was representing all the foreign airlines except Emirates, said it would communicate the decisions taken at the meeting to the airlines and report back to the leadership of the House promptly.   

Flying rights row 

The issue of the trapped funds has also stirred debate over flying rights. The House of Representatives called on foreign airlines to reciprocate the gesture on funds by respecting the Bilateral Air Service Agreement (BASA) signed with Nigerian carriers on the number of flight slots allowed into their own countries from Nigeria. 

“The meeting resolved that reducing the flight frequencies of the foreign airlines would give Nigerian operators a chance to compete favorably in the market and in the long run, reduce the amount of the foreign airlines’ funds trapped in the country in the future,” the statement continued. 

Source: Aerotime Hub

Heathrow says demand unlikely to return to pre-pandemic levels for years

London Heathrow, the UK’s largest airport, cautioned that demand is unlikely to return to pre-COVID levels for “a number of years” and indicated caps on passenger numbers were not fully off the table.  

Heathrow said it expected total passenger numbers for 2022 to reach between 60 million and 62 million, around 25% less than 2019. 

“Headwinds of a global economic crisis, war in Ukraine and the impact of COVID-19 mean we are unlikely to return to pre-pandemic demand for a number of years, except at peak times,” the airport said in a statement on financial results for the first nine months of 2022.  

Heathrow also said while it was removing a cap on passenger capacity from October 30, 2022, it was working with airlines on a plan that would “align supply and demand” on a small number of days during the busy Christmas travel period.  

The airport implemented passenger caps over summer 2022, effectively preventing airlines from selling too many tickets, due to staff shortages.  

“This would encourage demand into less busy periods, protecting the heavier peaks, and avoiding flight cancellations due to resource pressures,” the airport commented in the statement on October 26, 2022.  

For the nine months to September 30, 2022, Heathrow continued to make losses, but much reduced compared to the peak of the COVID-19 pandemic. Its underlying losses reached £0.4 billion ($462 million) in the period, adding to losses already incurred over the last two years of £4 billion ($4.6 billion). 

Source: Aerotime Hub

For Airlines, Cloud Solutions Are Now a Must-Have

Throughout the summer, we saw scenes depicting long delays, cancellations, and frustrated passengers unfold at airports across the globe. Staffing challenges, Covid-related issues, and extremely high consumer demand all played a role in the chaos. The fact that many airlines run on outdated technology systems that are siloed across operations and lack powerful analytics tools only makes matters more challenging.

“Some of the technology, software, and systems used today are aged 30-plus years,” said Catalin Sava, IBM’s chief technology officer for travel and transportation.

Even before the pandemic, there was an urgent need for airlines to modernize their technology systems and usher in a new era of efficiency, customer-centric operations, and digital insights. However, industry shifts brought on by the pandemic have demonstrated that doing so is now critical. Airlines are in need of cloud transformation, which can improve everything from daily operations and maintenance challenges to long-term goals like carbon footprint reduction.

React to Market Changes as They Happen

Legacy systems lock airline operations into a near-static profile of capability and scalability — but this pattern is not fit for today’s business environment. As with all digital business, airlines need to have the ability to react to market dynamics in real-time, allowing them to tune their operations to fit demand. With the adoption of cloud native solutions, deployment of new services goes from years to weeks, producing massive development savings and embracing a software development culture built on relevance and customer centricity.

Cloud native solutions enable the shift from capital expenditures to operational expenditures for IT operations and add the ability to dynamically scale, both horizontally and vertically, a company’s IT footprint. This is one of the game changing aspects of cloud native solutions: An organization can use and pay for as much as it needs when it needs it and have full visibility of the costs.

Break Down Silos to Create Better Customer and Partner Outcomes

Individual business units across the airline industry have traditionally relied on decades-old software and systems that may not allow these units to reach their full potential. And even if the individual system succeeds at doing its job, companies often fail to realize the full potential of their operations when pillars across the business can’t communicate with each other.

Airlines must combine and modernize disparate technology platforms to streamline operations and better serve passengers. “A siloed data center — even one that enjoys the benefits of the most modern management and analytics tools — can only deliver operational improvements within the narrow scope of the silo it serves,” said Sava. “Increasingly, individual airlines, as well as the broader industry ecosystem, understand that the improvements that matter most are those found between operational silos,” he continued.

Traffic management solutions offer a salient example. Airline gate operations and departure control systems have an extremely complex job, as they seek to optimize to hit static timetables and take-off targets amid ever-shifting circumstances, all while factoring in the upstream and downstream impacts of their decisions. The underlying system, then, must be built for agility. The more real-world complexity it can account for, the more likely it is to produce optimal outcomes for airline partners, employees, and customers.

Access and Implement New Data Insights

By migrating systems into the cloud and modernizing them through cloud solutions, airlines can also benefit from deeper data insights and analytics that stretch across their entire organization.

For example, take airline maintenance, repair, and overhaul (MRO) — the repair, service, or inspection of an aircraft. Like other large and complex areas of airline operations, airline MRO has traditionally assembled their own data-driven views of the organization. While this information may be rich in detail and highly customized to the needs of the maintenance staff, it rarely — if ever — exists in perfect harmony with the similarly detailed views of other business units, such as reservations or airport operations. Here, cloud solutions offer the solution, connecting each pillar of the organization to a shared base of operational data.

Sharing an operational view reverberates through the organization, empowers employees, and promotes consistency. “Most often, the applications used by front-line staff become far more useful and impactful when they are fed by and interact with the most current and accurate data in the airline. This is why connecting these solutions to the cloud creates profound improvement opportunities to engage employees, as we have seen with Finnair,” said Cormac Walsh, aviation industry head at Nordcloud, an IBM company.

Empowering Digital Transformation the World Over

With cloud solutions, airlines can leverage advanced technology like artificial intelligence and machine learning to vastly improve operations, tackle previously confounding maintenance challenges, and create experiences that earn customers’ business for life. They can also work toward a better tomorrow, keying on long-term goals like carbon footprint reduction by focusing on developing creative, data-based solutions that strike the right notes for customers and shareholders alike.

First, they’ll need to make the most important decision in their enterprise transformation journey: choosing a cloud migration partner. This single choice will have an outsized impact on the cost and timeline of their cloud transformation, the details of which can only become clear once the airline engages a partner.

“Each transformation journey is unique,” said Walsh. “The complexity associated with the volume of applications in scope, the number of associated financial and operating systems included in the transformation, and the degree to which applications moving over to the cloud will be modernized will each factor in. Timelines and investment estimates that don’t include these key inputs are not only useless, but dangerous,” he continued.

Cloud migration and modernization are both a journey and a destination — but getting it right can build a foundation to support the digital transformation that will take airlines into a new era.

Source: Skift