Could tech companies spell trouble for airlines?

It’s no secret tech companies are getting bigger and better every day, but what impact is that having on airline business models?

Well, as highlighted at the Singapore Airshow Aviation Leadership Summit this week, it could be a bigger impact than expected.

In an article from CNBC, companies like Amazon, Uber and Airbnb are threatening the core operations of travel transport industries.

For starters, there’s the concern that Amazon, with its air cargo services for US deliveries, could wind up competing with global giants such as FedEx or DHL.

Then you’ve got Google’s self-driving car, and Uber’s helicopter initiative with Airbus.

Seeing a pattern here?

As CNBC reports, these tech juggernauts are concentrating their energy on something airlines and a number of travel businesses already do: move customers “from point A to point B”.

Director General for mobility and transport at the European Commission, Henrik Hololei, said tech companies have access to vast amounts of data, meaning they “know better what the customer wants”, before cautioning the aviation industry to be wary of companies flying drones. Who knows what they have planned, he warned.

But technology and data analysis can be used for airlines too, not just against them.

“Technology is moving at a faster pace than we can use it,” Bahrain’s Transport and Telecommunications Minister Kamal bin Ahmed Mohammed said at the summit, per CNBC.

“Airline operators will be forced to invest in technology.”

With this in mind, CNBC reported Boeing has assembled 800 analytics experts to create a whole new division that works out how to use data for solving customer-centric problems.

The unit is called Boeing AnalytX, and is already operating with partners like Delta Air Lines, Turkish Airlines and Korean Air.

Goh Choon Phong, CEO of Singapore Airlines, told CNBC that his company wasn’t concerned about its potential to utilise big data.

“Airlines have their own advantage when it comes to data and interactions with customers,” Phong told the publication.

“I don’t think you can find any other business where you have customers, in some sense, with you for the duration of a whole flight.”

Phong suggested to CNBC that this was a huge undervalued opportunity for airlines to get even more familiar with customers.

“If we can understand our customers better, surely we can use that data to serve them better,” Phong added.

According to CNBC, Phong also didn’t seem worried about competition from tech firms, like some of his aviation peers.

Instead, he confirmed that Singapore is so open that “anybody can set up an airline”, saying competition overall wasn’t a cause for concern at Singapore Airlines.

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Email the Travel Weekly team at traveldesk@travelweekly.com.au

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