Europe's airlines are flying to the cloud

Online technology suits the aviation industry’s need for fast global collaboration

The following is a contributed article by Santina Franchi, General Manager of Microsoft’s Enterprise and Partner Group in Western Europe. She is responsible for sales of software, devices and online services to Microsoft’s largest customers and partners, spanning 12 Western European markets.

When summer is in full swing, European skies are full of excited holiday makers en route to hotspots all around the globe. And seasonality aside, airline passenger demand is expected to steadily increase for the next 20 years, according to the International Air Transport Association, growing 4.1% annually worldwide. 

This presents a sizable growth opportunity to those in the aviation sector, but, with fierce competition, the typical profit margins in the airlines industry tend to be less than 3%. As such, airlines are turning to cloud-based technology to help them optimize efficiencies and improve customer service without having to allocate significant capital expenses. 

Boosting service, boosting sales

Iberia Express is a prime example of an airline turning to the cloud as a growth enabler. Founded in 2012 as the low-cost subsidiary of Iberia Airways, the company has been steadily growing the flights it operates, and the passengers it carries.  However, it soon became apparent that it was becoming a strain to ensure excellent service to online customers, particularly in supporting them with purchase requirements, providing the best flight management information and offering the most personalized promotional offers.

The company knew it needed to adapt – but to complicate the issue, the back-end architecture of the online sales channel made staying responsive a challenge. In the words of Ricard Falomir, Iberia Express CIO, the system was “complex to manage and maintain, and required enormous economic effort in the event of even the slightest change.”

Working with IT services and consulting specialist, The Birchman Group, and using Microsoft Azure, Iberia Express moved its entire online sales platform to full cloud architecture and infrastructure.  Allowing for much greater agility – and reducing deployment costs by 50% – the company’s various business units are now able to implement customized offers for its customers and improve service to its Club Express membership.   

As a result, there has been a dramatic increase in direct sales through the channel, “Today, we can safely say that the new site allows us to offer more services to our customers more quickly, and this has enabled us to triple our sales,” said Silvia Mosquera, Iberia Express CCO.

Communication and Collaboration

By their nature, any airline – no matter how large or small – will have a disparate workforce, with teams spread internationally and across airport terminals.  As such, airlines are finding that the use of cloud based communications tools, including email, instant messaging and enterprise social platforms, are keeping staff connected in a cost-effective manner, whether they are accessing systems via tablets on the tarmac, or laptops in the terminal.

British Airways is a good example of an airline doing just this. With more than 41,000 employees and a destination network of more than 170 locations, it has a significant human resource to draw on, but keeping teams seamlessly connected proved challenging. 

Across industry sectors, the promise of enterprise social networks has been touted for years, yet actually realizing this potential was another matter – and deployments would often fail due to poor engagement from staff. As recently as 2013, Gartner was reporting that 80% of social business efforts would not achieve intended benefits within two years.

British Airways bucked this trend, using private social network Yammer, to enable anytime, anywhere engagement among employees, facilitating timely collaboration that has boosted productivity and helped impact the core business.

When staff were given a first look at the new Airbus airliner, a number of cabin crew voiced concerns about the gallery layout and made suggestions for improvements on the platform – one even posted sketches of recommendations. The engineering team, based in Wales, took these suggestions on board, capturing and incorporating the feedback to ensure the new plane was as functional and comfortable as possible for both employees and passengers. 

In another instance, flight service managers were able to make their voices heard regarding discussions around making changes to the first class passenger experience. The team in charge of looking to identify areas for greater efficiencies proposed cost-cutting adjustments to amenity kits provided to passengers without affecting customer satisfaction. A healthy debate took place on Yammer and the teams were soon able to identify solutions, including the recycling of items like stationary that often go unused, to ensure customers stayed happy and that the original cost-cutting requirement was achieved.

More generally, the six months following initial introduction of the solution saw 11,000 employees sign up. In less than two years there had been over one million posts representing an incredible volume of knowledge shared from every part of the organisation.

The customer is always king

The airline industry provides plenty of rich fodder for stories related to customer service, especially as we flyers tend to remember when things go wrong – then share those stories over social media! However, in our hyper-connected world, customers’ expectations are generally going up sky high, regardless of the sector. And, those unhappy customers are increasingly happy to share those stories too.

This puts tremendous pressure on companies to continually improve service and responsiveness. 

However, in the age of the cloud, even companies that are not cash-rich and facing increasing competition can turn to technology to keep customers happy and keep them coming back.