Sun, Jun 06, 2010 page12

• Airlines struggling to bridge the digital divide with customers

  • By Jad Mouawad / NY TIMES NEWS SERVICE
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  Airlines have made great technological leaps in recent years, allowing passengers to check in from home or download boarding passes on their smartphones. However, if you’ve ever been stranded at an airport during a raging thunderstorm, chances are you will end up standing in a long line watching a gate agent typing furiously on an outdated computer.

  The airlines are still catching up with the technology many of their customers already carry in their pockets. That’s a problem for an industry whose core purpose is customer service. Still, there is some hope for change.

  The carriers are finally recognizing that many of their antiquated systems contribute to passenger frustrations. They have begun developing handheld devices, a little bigger than cellphones, that have much quicker access to airline data and allow gate agents to assist passengers throughout the terminal.

  In theory, gate agents with these devices can anticipate the need to rebook a flight after a missed connection, instead of waiting for passengers to ask. In the future, new technology may allow airlines to know if travelers are stuck in traffic on their way to the airport, thanks to GPS-enabled smartphones, or offer an earlier flight if a traveler shows up with time to spare.

  Passengers traveling this summer will see only a glimpse of the new technology, though it will be introduced at airports over the next year or two. For now, the airlines remain dependent on computer systems first built a half century ago that have been layered with updates upon updates — “a spaghetti of networks,” as one analyst described it — that do not always communicate well with one another, or with passengers.

  DATA MISMATCH

  So some airport screens may say a flight is on time, while the gate information shows it has been moved to another terminal and the airline employees standing behind their monitors say the flight has, in fact, been delayed two hours.

  At its major hubs, including Dallas-Fort Worth, American Airlines recently started using a technology called Yada — for “your assistance delivered anywhere” — that allows its agents to promptly rebook passengers on a different flight, advise on a gate change or track down a lost bag. Travelers do not have to wait in line anymore.

  Yada also prints boarding passes using small printers that agents strap to their belts. Because the devices also read credit cards, American’s agents can check oversize carry-on bags and charge a bag fee directly at the boarding gate.

  It seems simple enough. But modernizing the technology has been complicated, said Monte Ford, American’s chief information officer.

  “It’s like changing the engine of a plane in flight,” he said. “But we firmly believe that consumers will drive the technology, and we are trying to build an environment that will adapt to that.”

  The airlines have tried to pack information on their Web site, and they use social networks like Twitter or Facebook. However, many of these benefits have been overshadowed by bag fees or charging for food or pillows onboard, said Mary Gilly, a professor of marketing at the University of California, Irvine.

  “I think the airlines have deservedly gotten the reputation of doing what is best for the airlines, and not for consumers,” she said. Instead, passengers want “more information, more consideration.”

  CUSTOMER LOYALTY

  The carriers say they know they need to simplify their computer systems and make them easier to use. And they benefit, too, with reduced operating costs and increased customer loyalty.

  “Technology is absolutely key for us to be able to offer an exceptional customer experience, which in turn is necessary to succeed as an airline,” said Theresa Wise, chief information officer at Delta Air Lines. “But we recognize that we still have some challenges today.”

  Airline systems can be maddeningly complex. It took Delta about two years to complete its acquisition of Northwest Airlines, a process that included merging their reservation and technology systems and slicing 1,200 major computer applications in half.

  “Given the size and conservative nature of airlines, it is sometimes hard to introduce new systems into this industry,” said Raul Arce, vice president for travel and transportation at IBM. “Airlines are beginning to see that their information technology and analytics are just as important as their aircrafts [sic].”

  That is not to say airlines have been idle in recent years. The industry replaced its traditional magnetic-strip tickets with electronic tickets, saving US$3 billion a year since 2008, according to the International Air Transport Association, a global trade group.

  The association helped develop the standard for bar codes on electronic tickets that allow passengers to print their own boarding passes. The industry is also working on automated boarding technologies.

  However, new technology is expensive, and the industry has been struggling to generate cash. Airlines usually spend 2.5 to 3.5 percent of their revenue on information technology, but last year, amid mounting losses, that share dropped to 1.7 percent, the lowest level since 2002, as airlines sought to cut costs, according to SITA, one of the industry’s largest technology providers.

  “The history of innovation comes in waves, and we are on the verge of many new opportunities,” Wise said. “The fundamental shift will be in personalizing your journey, being always on and always with you.”

  ADDITIONAL REPORTING BY EMMA GRAVES FITZSIMMONS
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