The reality of today’s — and tomorrow’s — aviation technology is no longer powered by computers sitting at the headquarters or datacentres of airlines, suppliers, service providers and other players. Instead, it’s found in the cloud, at distributed server locations owned by companies like Amazon, Google and Microsoft.
This new model provides what’s known as Software-as-a-Service, or SaaS, and the model is spreading rapidly beyond software, platform (PaaS) and infrastructure (IaaS) to all parts of the technology stack, or Anything-as-a-Service (XaaS or aaS).
“Digitisation was already top-of-mind for the aviation industry before COVID-19, and the pandemic has accelerated this process for many carriers, with the vast majority of airlines now opting for software-as-a-service, rather than installing and maintaining software themselves,” Sabre’s regional general manager in Asia Pacific for travel solutions and airline sales Rakesh Narayanan tells us.
A key accelerating driver here is the understanding that airlines will need to grow from their skeleton pandemic services to not just pre-COVID levels but, likely, to regionally varying surge levels as states, countries and regions unlock and release pent-up demand — and may then, as the response to the Omicron variant has shown only too clearly, be required to shrink back again. This requires agility, and it’s here that SaaS, especially when implemented with flexible and scalable commercial models, can come into its own.
“One of the major benefits is that you only pay for what you consume so, if you’re having a growth period, or hypergrowth, as many carriers are experiencing now compared to early in the pandemic, then you don’t need to worry about capacity planning and adding more servers,” Narayanan says. “Similarly, if the situation fluctuates and you suddenly need to reduce capacity, airlines are able to do this without any burden of maintaining surplus servers.“
The evolution of the SaaS model can be shown in Sabre’s own provisioning: whereas the company used to host its software and services on its own servers, it is now moving them to the Google Cloud Platform, with service level agreements (SLAs) specifying requirements from the company — and its customers.
And airlines are very keen. “There’s been a significant increase in interest in our Radixx Res passenger service system (PSS) and this year, we’ve signed a number of start-up airlines who were able to get their PSS up and running within a few weeks at a minimal upfront cost,” Narayanan says. “Time-to-market was particularly important for Toki Air, a start-up, low-cost carrier in Japan, who opted for our full Radixx product suite to enable centralised management of flight and value-added services in time for their launch.”
aaS allows airlines to move beyond just capex/opex
Choosing an aaS model also benefits capital expenditure-heavy aviation businesses, which can purchase services under their operational expenditure budgets to spread the budgetary load. But aaS goes beyond just the benefits of outsourcing functions requiring capex in order to turn them into opex.
“Service providers have been selling services for years, long before the cloud, where customers define SLAs and get a service delivered. That was the nature of outsourcing in the old days,” Susan Linden, chief technical officer and head of architecture, technology and IT operations at Lufthansa Systems, tells us. “As with everything in the IT industry, it is a topic of permanent development starting with some disruptive ideas, which becomes the new standard. As with most of those topics, manufacturing was a huge driver but not the only one.”
The aaS philosophy “is not about contracting some square foot datacenter floor and a shiny new server and lots of cables, licenses to run the operating system, all applications and tools to run it, and on top a group of IT folks,” notes Linden. “It is about consuming a service with all the underlying components or even a business functions as a service without having to worry how many licenses are needed to run it or how many CPUs are required to keep it all alive.”
The key idea is that, rather than fully operationalising the value chain internally, specifying the outcomes via service level agreement contracting with an external specialist supplier frees up skilled, and limited, internal resource. The aaS model, if contracted correctly — and ‘contracted correctly’ is the crux of the matter — also builds in seasonal and even unforecasted demand flexibility, and also enables end-user-invisible ongoing upgrades as new technologies are deployed into the cloud provider’s stack.
“The model clearly moves the responsibility of IT-service scalability from the aviation companies to their suppliers,” Linden notes. “It drives new disruptive and innovative delivery ideas on the IT side and allows the aviation companies to reduce their risk and costs while focusing on their core business.”
Next-gen tech is even more promising
Technologies like artificial intelligence, machine learning and increasingly advanced programmatic algorithms mean that as-a-service providers — and airlines — will reap even more benefits.
“The next generation of aviation technology is truly something about which to get excited,” Linden enthuses. “On the financial side, it will more closely align cost and revenue streams. On the product side, it is all about optimisation and customer-centricity, and IT plays a key role in both. It will change from being a cost factor to becoming a business enabler.”
From the airline perspective, Linden suggests, the focus is no longer just about cost-effective movement of people, cargo or both. It’s about bringing in wider concerns like sustainability, resilience, business continuity and the increasing digitalisation of all industries.
Narayanan, meanwhile, focusses on the greater ability of airlines to customise and automate their retailing offer to passengers with next-gen tech.
“Passengers have experience of a much higher level of personalisation through their experiences within other verticals, which is why Sabre very much believes in the retailing story, powered by artificial intelligence and machine learning, to ensure that airlines are also able to benefit from intelligence as a service and provide passengers with truly personalised experiences rather than simply thinking about ‘processing’ travellers at check-in,” he says. “For airlines, that is about being able to be a retailer not just for a seat but for travel and experiences within that country or destination so they become a one-stop shop, like an Amazon of the skies, for their passenger. This retailing model means the possibilities are limitless for carriers to increase revenue while meeting and exceeding traveler expectations. That’s a very exciting scenario for both airlines and passengers as we move further into recovery and beyond.”
Author: John Walton
Published: 15th February 2022
Photo by Ross Parmly on Unsplash
