Global airline digitalisation well underway

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The industry is increasingly seeing the emergence of niche start-ups using next-generation technology to solve specific airline problems. The global airline digitalisation market has been analysed by market analysts Frost & Sullivan. It shows that the world’s major airlines have committed to migrate much of their IT infrastructure to the cloud over the next decade. “Enhancing the touchless passenger experience, streamlining internal processes, improving personalised customer experience and increasing ancillary revenues (which come from services such as baggage fees and seat selection) are some of the key drivers of the airline digitalisation market, which is estimated to reach $35.42 billion by 2030 and exceed pre-pandemic levels by 2025,” say the experts.

From a regional perspective, Asia-Pacific is expected to remain the largest revenue-generating region in 2030, while North America will be the fastest growing market. Traditional airlines that were in various stages of moving their workloads to the cloud before the pandemic are expected to continue the process as the industry begins to recover. New airlines and aircraft start-ups are bypassing traditional infrastructure in favour of open architecture and cloud computing.

“Developments between technology companies, travel startups and other players in the travel ecosystem are changing the landscape for airline digitalization,” said Abhilash Varkey Abraham, senior analyst, aviation and defence market at Frost & Sullivan. The researcher explained, “Over the next decade, technology giants are expected to play a significant role in enabling airlines and their large IT service providers to migrate workloads to cloud infrastructure. Niche start-ups using next-generation technology specialised in solving airlines’ unique problems are gaining ground in the industry.”

According to Abhilash, the development and adoption of next-generation technologies and the use of big data to collect and analyse data is transforming the industry’s processes. This will include rapid advances in consumer technology, as well as the Internet of Things, big data and machine learning. Increased focus on digitisation, hardware improvements, software cost reductions and as-a-service business models offer lucrative growth prospects for players in the aviation digitisation market. Major developments are expected in areas such as:

Disruption management and fuel optimization for improved operational efficiency: digital solutions can help reduce financial losses from irregular operations by around 50 percent, representing a significant target market for digital solution providers. Big data platforms for better operations and marketing: Data platforms integrated into existing infrastructure will improve airlines’ segmentation methods and marketing strategies.

Cybersecurity for robust operational resilience: blockchain technology can be used in a wide range of applications, including secure identity management, secure data authentication, smart contracts for airline maintenance and streamlined certification. Migrating workloads to the cloud for scalability and cost-efficiency: vendors and system integrators need to develop a portfolio of digital services in addition to basic infrastructure and migration services. This will allow airlines to choose solutions as their needs change.

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