Clear (jet)Blue Skies
The 5th largest US-based airlines adopts large scale digitization to transform and improve long-term viability.
With over 3.4 billion passengers jet-setting around the world each year, the commercial airline industry is arguably one of the most demanding and complex industries to operate [1]. According to an Accenture article on the digital transformation of airlines, a competitive advantage requires prioritizing five areas of digitization: real time insights, connected platforms, products and services, open platforms, and transformation into a [truly] digital airline [2]. JetBlue, the fifth largest US-based carrier, recently has been focusing on the first three of those areas to improve their competitiveness and provide a superior service to customers.
Maintenance Platform
Maintenance is paramount to the safe and reliable operations of an airline, given that some of the most complex machines in modern history complete over 600 billion miles of air travel per year with nearly zero room for error. JetBlue began using the digital maintenance tracking platform TRAX in 2006 but just this year introduced the robust enhancement of this program by partnering with Cintra, a platform manager that utilizes Oracle’s cloud-based architecture [3]. Introducing digital optimization that links the existing maintenance system of parts suppliers, mechanics, and airline terminal and hangar operations has created incredible results, to include reducing certain operations by upwards of 20x.
Customer-facing Innovation
As customers develop higher expectations of service, personalization, flexibility, and value, airlines must provide innovative platforms with digital underpinnings to satisfy these expectations and remain competitive. JetBlue launched their customer application in 2012, in parallel with the other top-five US carriers and offering many of the same features such as digital check-in, flight booking, and flight updates. Recently though, jetBlue has enhanced the flight booking experience by offering “fare families” that enable customers to pick, in more detail than ever before, the specific levels of service for their particular travel requirement [3]. For example, a business traveler on a short trip may save money by booking the cheapest ticket option that does not provide for a checked bag. This added flexibility is increasingly desired by customers reluctant to pay for unnecessary services and shifts the burden of finite resources, such as overhead baggage space or legroom, to other customers that are more willing to pay. Also, because the customer application runs on the same internal cloud platform as the aforementioned maintenance platform, jetBlue retains more revenue from ticket sales that would traditionally be routed through a third-party host and developer [3].
Electronic Flight Bag
Digital applications seem to enhance every aspect of our modern lives and the same can be said of an application by Jeppeson, a Boeing subsidiary, that streamlines the on-board flight operations for jetBlue pilots. In 2015, jetBlue adopted the tablet application that manages flight information, provides improved navigation data and terminal charts, and improves overall situational awareness for the pilots [4]. Needless to say, this capability also saves the airline approximately $840,000 annually, as it eliminates the need for lengthy paper charts and flight information, sometimes weighing in excess of 50 pounds [4]. This technology first came to market through open-source development and was only recently approved for commercial use by the Federal Aviation Administration.
Next Steps
As airlines watch their margins shrink in the hyper-competitive and crowded space of air travel, jetBlue will have to find new opportunities to streamline operations, save money, and increase revenue by improving the customer experience. By partnering with airports, jetBlue and other airlines can improve on all three of these areas simultaneously and increasingly differentiate their specific brand. A 2015 McKinsey & Company paper titled The Clairvoyant Airline outlines the theoretical benefits of an airline that can predict users’ movements through an airport and integrate that information into front-line and internal operations [5].
Hold That Flight!
Hypothetically, if an airline possessed the ability to track a customer through the stages of check-in, security, and gate arrival, aircraft departures could be delayed or passengers shifted to other later departing flights to minimize the costly and painstaking process of re-scheduling a flight. Imagine that you are at the airport two hours early for your flight to New York while another passenger on an imminently departing flight is currently stuck in road traffic. If an airline could detect this and send you to the earlier departing flight and rebook the other passenger to a later flight, all parties, to include the airline, would benefit. Such customer tracking could be achieved with current smartphone capabilities and RFID technology, or “internet of things” based technologies. Similar systematic improvements to baggage movement and security screening queues using location tracking technology would dramatically improve internal operations and the customer experience, both advantages necessary for an airline to differentiate from the crowd.
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Resources:
[1] The World Bank, Air Transport, Passengers Carried, accessed November 2016.
[2] Accenture, “Make Your Digital Connection: From Digital Strategy to Airline Strategy,” 2016.
[3] Cintra, “Digital Transformation Drives Fleet and Passenger Growth at JetBlue Airways,” 2016.
[4] “Jeppesen FliteDeck Pro on Ipad Helps Airlines Eliminate Paper, Gain Fuel Savings.” Jeppesen News Release. Denver, CO, September 30, 2015.
[5] Mckinsey & Company, “The Clairvoyant Airline,” 2015.
Images (in order of appearance in the text):
[cover image] JetBlue Media Room, Multimedia [http://mediaroom.jetblue.com/media-room/multimedia/images/a320.aspx].
“The JetBlue App: Take JetBlue Everywhere You Go,” Think with Google (blog), November 2012. [https://www.thinkwithgoogle.com/campaigns/jetblue-airways-the-jetblue-app.html], accessed November 2016.
This article is incredibly interesting, especially given how beholden we are to JetBlue in Boston – thank you for sharing Greg!
On the topic of customer-facing innovation, it also strikes me that JetBlue has been a leader among domestic airlines in incorporating technology to improve its in-flight experience. Specifically, it was one of the first domestic airlines to install satellite TV across its fleet. It has also recently begun offering free in-flight WiFi (coined Fly-Fi). In an age when many airlines are cutting back on amenities to drive profitability, JetBlue is bucking the trend, incorporating simple, consumer-friendly technologies on its planes to establish a competitive advantage.
Source: http://fortune.com/2016/03/26/jet-blue-venture-capital/
Thanks for sharing Greg. I wrote a post about Boeing’s digital innovation, and it’s encouraging to see how JetBlue is also utilizing Boeing’s digital technology to create value. I wonder how JetBlue weighs the tradeoffs between different vendors of these technologies. For example, JetBlue used Boeing to replace tedious paperwork on flights, but chose to use Oracle / Cintra for predictive maintenance. Boeing has a similar predictive maintenance platform / offering, but JetBlue chose not to use Boeing in this instance. I wonder if the airline is concerned about how to service its non-Boeing aircrafts, and thus chose a neutral platform? Regardless, it’s encouraging to see multiple players across the value chain sharing the benefits of such innovation.
Greg,
This was a great example of advancements in an industry many of us interact with fairly often. I have personally seen major improvements with the major airlines, especially from the customer-facing innovation as mentioned in the blog. With all of the recent advancements we have already seen there is still a large area of opportunity to continue improving. How great would it be if we could track our checked bags throughout transit rather than hope it shows up on the other side with only a printed baggage check ticket in our hand for encouragement and defense against lost luggage? This blog also proves how dependent on technology airlines have become and leads to the concerns of when technology fails. For example, this past summer, when the entire Southwest computer system glitched leading to delays and cancelations for extended periods of time for thousands of passengers and cost Southwest millions of dollars.[1]
[1] “Hundreds of Southwest flights still delayed or canceled after computer glitch,” (July 21, 2016) Chicago Tribune website, http://www.chicagotribune.com/business/ct-southwest-airlines-outage-delays-20160720-story, accessed November 2016
Greg,
Very interesting post. In the last years the aerospace industry has been evolving with incremental improvements to reach excellence standards. The examples that you outline in the post are some examples of incremental improvements.
However the aerospace industry is directly impacted by both the digital challenge and the environmental challenge [1]. They will have to solve both equally well to be sustainable in the long term. As far as I am concerned, incremental improvements are not enough but disruptive improvements should be put in place. Is JetBlue spending time and resources to solve problems likely to arise in the short term without devoting time to those that will impact the company harshly in the long term?
[1] Air Transport Action Group . 2016. Facts and figures about air transportation. [ONLINE] Available at: http://www.atag.org/. [Accessed 20 November 2016].