IATA World Financial Symposium 20th Sept 2018

airlines.iata.org

Issue 02: Thursday 20 September 2018

Airlines.

5th World Financial Symposium

SPONSORED BY

September 17 - September 20, 2018 | Madrid, Spain

Iberia’s Transformative Journey Day 01 highlights 19 September, 2018

Gabriel

Aleks Popovich Perdiguero

ISSUE 02

Getting everybody on board by creating the right environment was a key factor in Iberia’s transformation journey, according to Gabriel Perdiguero, Iberia’s Chief Customer and Business Transformation Officer. “Like the US Marines, we never left anyone behind,” he told attendees yesterday.

“It’s mainly a matter of telling people you are able to do new things. We want you to innovate on a daily basis,” explained Perdiguero. Recent innovation at Iberia has included improved wi-fi, customer payment by instalments, baggage delivered to the airport, and chatbots. The launch of international digital press, which took only three

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“It's mainly a matter of telling people you are able to do new things. ” Gabriel Perdiguero, Iberia, Chief Customer and Business Transformation Officer

to four weeks and replaced the traditional paper versions carried onboard, saved Iberia money by reducing weight and therefore fuel, and also resulted in cleaner aircraft.

Perdiguero said that Iberia’s programme of innovation has contributed to a significant improvement both in Iberia’s Net Promoter Score, which between 2013 and 2017 rose at a compound annual growth rate of 29% and its EBIT, which over the same period went from a loss of €165 million to a profit of €373 million.

Central to creating the environment in which these innovations were successfully implemented was the creation of 20-25 digital ambassadors, Perdiguero said. Working right across Iberia, these individuals play a vital role in disseminating and transferring innovation throughout the airline.

“We focused first internally to locate the right people—you know the ones—the ones who are always experimenting with new technologies,” he explained. Iberia’s digital ambassadors need a specific skill set. “Creative, analytical, every decision based on data, commercial, product oriented—these are the people transferring the message of transformation,” he said.

Perdiguero highlighted a number of other examples of how the development of a digital culture at Iberia was spawning initiatives, including big data and analytics, new and more collaborative ways of working, and reduced use of email internally, all of which were transforming Iberia into a digitally connected airline.

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19/09/2018 19:39

GLOBAL AIRPORT AND PASSENGER SYMPOSIUM

ATHENS, GREECE

2-4 OCTOBER 2018

• Examine the impact today’s established processes and and procedures will have on the future passenger journey

• Discover how to optimize the use of emerging technologies and design developments in the passenger journey

• Hear what passengers want in the unveiling of the Global Passenger Survey results

• Learn about trials and pilots currently underway and exchange best practices

• Participate in interactive panel discussions that explore the technological solutions that could define and impact airport operations and processes

• Vote for the winner of the IATA GAPS STARTUP Innovation Awards • Network with key stakeholders from the industry value-chain and create new business opportunities

Join us to plan and shape tomorrow’s passenger experience! www.iata.org/gaps

#IATAGAPS

gaps@iata.org

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Thursday 20 September 2018: Issue 02

From dark data to actionable insights SPONSORED BY

Inspired by the Innovation Jam New technologies are having an enormous impact on the financial world. And it is a trend that is set to continue.

“Innovation can happen anywhere,” says Juan Ivan Martin, Head, Innovation, Financial and Distribution Services, at IATA. “An initial spark could come from an incumbent player or a startup, from a pilot or a passenger. We need to listen carefully and, every once in a while, a new technology, an old problem, and a big idea may turn into an innovation.”

The Innovation Jam aims to create an environment for new ideas and thereby provide the inspiration that could trigger the next great innovation.

Carlos Sanchez, CEO and Founder, ipagoo, agrees that, “We are at a moment in time when technological evolution around artificial intelligence, cloud computing, data streaming, and advanced security models will soon change the way financial services are created and delivered to end clients.”

Sanchez believes it is the access, selection, subscription, and consumption of financial products and services that is likely to see the biggest changes in the future. Initiatives such as Open Banking in the United Kingdom, the Second Payment Services Directive in the wider European Union and similar initiatives in many countries around the world will result in unprecedented access to a range of products and services, all tailored to a consumer’s circumstances thanks to data analysis.

“Access to financial services will achieve the same level of convenience as the one-click option with Amazon,” Sanchez says. “Products will be acquired and discarded much faster than we experience today, as we enter an age when the client is placed at the center of the industry.

“It is the distribution of products in real-time— especially banking products—that will, in my opinion, see the major innovation in the years to come,” he concludes.

An interview with James Fernandez, Chief Commercial Officer, Accelya.

In the current digital era, airlines have access to enormous volumes of data, much of which is what is now popularly known as the ‘dark data’. If smartly leveraged, it can provide the insights to drive your revenue, cost and profit objectives.

At Accelya, we follow and recommend these three stages to convert data into actionable insights: 1. Firstly, creating an analytics platform to ingest a broad set of data sources—simply, reliably and sustainably. This facilitates project initiation for those business stakeholders for whom specific use cases have been identified; and provides an accelerated approach to developing meaningful use case ‘Proof of Value (PoV)’.

2. The second element is to ensure your analytics teams have both the technical skills and business acumen to understand the wider array of data, use the relevant analytics tools to manage both structured and unstructured data and bring useful business insights. Having strong operational research skills will further allow you to rapidly move from pure descriptive analytics to harnessing data for predictive and prescriptive analytical models.

3. Thirdly, making the various analytical models available to a broad set of end user applications—from traditional Business Intelligence tools that allow ready visualisation of complex data to purpose-built applications for solving specific process problems.

Ultimately, both predictive and prescriptive models are likely to be embedded within your enterprise applications as part of key software functions.

Accelya, with its advanced technology platforms and industry knowledge, is uniquely positioned to deliver predictive, actionable insights to airlines. Our experts partner with you to unlock hidden business potential across your processes and drive operational efficiencies, competitive advantage, and new revenues.

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Issue 02: Thursday 20 September 2018

Scenes from the WFS

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Thursday 20 September 2018: Issue 02

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Delegates from around the world enjoying sessions of the WFS, including the High Impact Seminar, networking opportunities, entertainment and last night's Gala dinner. Also above is artist Filippo Buzzini's work depicting WFS 2018

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track record of just 0.63 bags lost per 1,000 passengers

Issue 02: Thursday 20 September 2018

Yesterday's Fireside Chat saw (from left to right) John Luth, Bonny Simi and Steve Priest discuss innovation in aviation

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JetBlue Invests in Disruptive Tech A venture capital fund launched by JetBlue in 2016 with the aim of improving the airline is already proving its worth. In a Fireside Chat at WFS, Steve Priest, JetBlue’s CFO, told attendees that the aim of the fund is to allow the airline to continue to be at the cutting edge of change in the industry.

“Instead of being hit by the bus we want to be driving it,” said Priest, who was interviewed by John Luth, Chairman & CEO, Seabury Consulting and Corporate Advisory (an Accenture company).

Bonny Simi, President of JetBlue Technology Ventures, who has responsibility for the fund’s investments, explained her focus as “improving revenue, reducing cost, enhancing customer service and customer safety within the industry.”

She went on to say that being based in Silicon Valley gives the unit a significant advantage in terms of exposure to start-ups. “Imagine you had a seat at the table when Airbnb and Uber were only 10-15 employees—that’s the sort of innovations we are seeing now.”

Simi said that innovation in the fields of artificial intelligence, machine learning, biometrics and electric propulsion were already disrupting the airline industry with 2,000 start-ups in 2018 that are relevant to the business. She added that they have invested in 8-10 of these.

Among those Simi highlighted were Gladly.com, which allows customers to communicate with JetBlue via chat, tagging and messaging. Another example is Sipree.com, which has transformed the time it takes for JetBlue to make customer refunds from as much as several months to within three days for 90% of refunds being made.

Simi said that about 40% of JetBlue Technology Ventures’ work was relevant to what JetBlue does now, but that 60% is related to the future.

The JetBlue Technology Ventures President cited electrical vertical take-off and landing vehicles as an example of high activity and explained how the fund had invested in joby.aero.

“They are two years ahead of everybody else and the launch is looking like 2023-2024,” she said.

40% of JetBlue Technology Ventures' work [is] relevant to what JetBlue does now, but 60% [relates to] the future

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Thursday 20 September 2018: Issue 02

New forms of payment Blockchain is the buzzword in payment innovation, especially since the technology should require relatively little investment.

But the case for blockchain supporting consumer or retail payment is still to be made, and a lot of work remains to be done.

In fact, many payment innovations will be evolutionary rather than revolutionary. Many new payment methods are simply different ways to conduct a legacy transaction.

Mobile wallets, for example, are an alternative method of conducting traditional card payment transactions in a more secure and consumerfriendly fashion. In essence, the PIN code is replaced with biometric authentication.

Although this represents a significant and visible change for the cardholder, it is still a regular card transaction the merchant will remit like any other.

Meanwhile, the bank transfer is being rejuvenated by moving it into real time confirmation.

“Many countries now have such an instrument and I believe it represents the first credible alternative to the ubiquitous card payment, because it offers the merchant a guarantee of payment at time of sale but with the extra benefit of real-time financial settlement,” says Christophe Kato, IATA Head, Payment Services.

This new payment method means the

deployment of new infrastructure, made complex by the fact that most implementations will be of a domestic nature. Today, card payments work more or less the same everywhere in the world. The danger, says Kato, is that real-time bank transfers will be a fragmented offer although there are initiatives to curtail this as much as possible, such as the regulatory push in the European Union to standardize instant bank transfer across the EU. IATA is involved in two pilots involving direct bank transfer as a form of payment for direct sales between an airline and customer, typically via the airline website. One is being done with Deutsche Bank and the other is with ipagoo.

There are other local payment initiatives adapted to the specifics of each market, sometimes based on physical cash collection. Though they respond to market demand, they require local integration and settlement, which does not work well with airlines’ need to simplify revenue collection.

“We have had the occasional ground-breaking invention like M’Pensa which is a mobile wallet not based on an underlying card infrastructure,” says Kato. “It has been a resounding success in Kenya and has spread, but card-powered mobile wallets will prove to be stiff competitors just as PayPal, Alipay, and WeChatPay, which grew powered by bank transfers, now accept card funding.”

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“Many countries now have such anbank [direct instrument transfer] and I believe Iand believe it it represents represents the first credible alternative to the ubiquitous card payment” Christophe Kato, IATA's IATA Head of IndustryServices Card Head, Payment Services

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Issue 02: Thursday 20 September 2018

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