Airline Industry Must Invest in New Technologies: OAG
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Airline Industry Must Invest in New Technologies: OAG

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Antonio Gozain By Antonio Gozain | Senior Journalist and Industry Analyst - Mon, 03/06/2023 - 12:55

The airline industry is undergoing a major transformation, with a new technology system replacing the legacy system that the sector has relied on for decades. While the legacy system is still strong and necessary, airlines must continue investing and adapting to the new system, according to a report by global data provider OAG.

The old system was created for an older generation of technology users and has outdated user interfaces and limited flexibility. Some legacy components in use date back to the 1970s, making them less functional in today’s industry and presenting risks for data security and IT outages, says OAG. In addition, the system is challenging to update as newer technologies emerge and it is not possible to integrate it with the newer third-party software solutions that airlines need to remain competitive.

On the other hand, the new system is modern, dynamic and adaptive, and it “will enable a better future for airlines and travelers alike,” reads the report. The modern system offers improved usability, scalability and cost savings. It is designed for today’s users and end-users (airlines and travelers) and it runs on modern, cloud-native software, easily integrating with other business applications that carriers leverage to gain insights into customer behavior.

This new system is driven forward by two trends that are closely related to each other: new technologies and changing customer needs. Modern software solutions can leverage machine learning (ML) and AI to better predict and serve traveler demand, analyzing thousands or millions of data points. Travelers also expect new products, such as cancellation insurances and a smooth experience while purchasing their flight online. This puts pressure on airlines to enable better customer experiences through new technologies.

New Travel Tech Companies Enter the Competition

The new technologies and changing customer needs have led to a rapidly growing ecosystem of travel tech companies, which are leveraging ML and AI to serve customers in ways that the legacy system does not allow.

These companies are working hard to untangle airlines from old tech systems, providing innovative software solutions with the potential to revolutionize how things are currently done, says OAG. While the system transition is predominantly focused on the customer-facing side of the airline business (retail, how flights are offered, packaged and sold), it can also trigger physical changes on aircraft, such as in the case of Sustainable Aviation Fuels (SAF).

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