0:00 - Introduction • 1:01 - on most significant developments in loyalty technology in 2023 •
3:51 - on Artificial Intelligence • 7:07 - on single view of the customer • 10:21 - on challenges in dealing with legacy systems and legacy mindsets • 16:44 - on regional differences in approach to innovation
GLO
0:00 – Introduction
1:01 – on most significant developments in loyalty technology in 2023
3:51 – on Artificial Intelligence
7:07 – on single view of the customer
10:21 – on challenges in dealing with legacy systems and legacy mindsets
16:44 – on regional differences in approach to innovation
Read full transcript below:
0:00
GLO: Massimo, it’s a great pleasure to have the opportunity to interview at the World Aviation Festival in Lisbon.
Massimo Morin, Global Head of Travel/Passenger Airlines, AWS: Hi, Dilek Thank you for having me here. I am very happy to talk to you about digital transformation. My name is Massimo Morin. I’m the Global Head of Travel at AWS. AWS is the largest technology provider. We have more than 17 years of experience in cloud. A few years back, we identified that we had a variety of customers in travel that didn’t want to talk only about technology but actually how to apply the technology to solve a problem. I joined the team, bringing industry expertise: I have a variety of expertise in the industry for airlines, airports, transportation, travel sellers and services, as well as in hospitality for accommodation, lodging, cruise lines, casinos, restaurants, catering and food services.
1:01
GLO: Looking at the big picture, what would you say were the most significant technological developments this year, and what technologies do you see developing in the next 12 to 18 months?
Massimo Morin, Global Head of Travel/Passenger Airlines, AWS: We have seen digital transformation happen pretty much for the past 10–15 years. Everybody was talking about digital, but it wasn’t taking off or accelerating. The pandemic has accelerated the digital transformation as people wanted to be contactless, use their mobile apps, etc., to do everything. They’re saying that the pandemic was the best digital transformation officer for any organisation. We commissioned Skift to interview more than 1000 travel professionals prior to the pandemic and found that technology was mostly focused on customer communication, advertising, and marketing—sharing the value of the brand and the value of the product that they were selling. But after the pandemic, we have seen an increase in focus around customer service: how to take care of business, how to take care of the customer, and how to assist them, not only when they’re selling the product but when they are actually servicing the customer. So, when you’re travelling, when you’re flying, when you get disrupted, and when you reach your destination.
We see this trend continuing for a variety of reasons. Firstly, the aviation industry is ramping up capacity, but there is pent-up demand, and the load factor is very high. Ryanair is probably at 95% industry-wide it is 85%. You have all the traffic controller restrictions that are there. So if there is a missed connection on a cancellation, how do you re-accommodate the passengers? How do you make sure that they reach their destination? So there is an acceleration of that. And clearly, the adoption of technology for those specific use cases is really important, specifically machine learning and artificial intelligence. In the past 12 months, we have been talking about generative AI (GenAI) and how that can be used to ramp up customer care and how to assist the employee in supporting the customer. We’ll see an acceleration of that in the months to come.
3:51
GLO: Yes, generative AI has been really talked about in the past eight to 12 months. What are you doing at AWS? How are you helping your customers to achieve their goals?
Massimo Morin, Global Head of Travel/Passenger Airlines, AWS: AWS and Amazon specifically have been using machine learning and artificial intelligence since the beginning. If you think about your Alexa device, or if you go to amazon.com to search for a product, the personalisation and product recommendations are all using ML/AI. We have a lot of experience in that. What we are doing is extracting services from Amazon and making them accessible to our customers—video recognition, speech-to-text extraction, etc.—and applying that to customer care. So, you see a ramp-up and adoption of contact centre modernisation and chatbots. What is going to happen is that when you pick up the phone, the system recognises from your phone number that you have a reservation, and now they can prioritise you to the right agent. Take the call if you have a reservation for a flight that is tomorrow morning, or call you back if you have a reservation further in the future, or use a recorded message or chatbot to actually provide information and offload this high-volume, low-value type of transaction, and reserve the contact centre agent, which is a very expensive resource, for top-tier or more complicated tasks.
How is generative AI going to help? Think about it. You want to create a more sophisticated, single view of the customer. You want to serve them better. Generative AI can actually go through the recording of your call and make a summary, answer a question in a more natural language, or identify training opportunities for the contact centre, as it can help you identify the patterns that are occurring and why your customers are unhappy. What are the things that are happening all the time? That is how generative AI is being used for customer care. But remember that even on the operational side, keeping the plane flying, not being delayed, etc., all have implications for customer care. So helping mechanics, planners, and gate agents to ramp up faster, to make more sound decisions and to execute faster. That is what is happening, and we are seeing a lot of traction.
We are working with customers like Ryanair that use generative AI, for example, to help the flight attendants ramp up faster or to write up their reports on what happened during the day. Or (for customers) answer a very simple question like, “I don’t feel right. What should I do today?” Or “How soon should I get to the airport?” and things that otherwise would require you to go through a lot of paperwork.
7:07
GLO: AWS is part of Amazon, which is the most customer-centric company. I love their philosophy of “customer first.” I have one login for everything: I can shop, I can read my Kindle, I can watch a movie, and I can listen to audiobooks. And I believe you also have a project called Single View of the Customer. Can you tell our members a little bit about that?
Massimo Morin, Global Head of Travel/Passenger Airlines, AWS: We heard a lot about the single view of the customers, and we have seen a lot of projects from travel suppliers and hotels that are trying to consolidate customer data. Most of the projects fail miserably because of scope creep or cost. At the end of the day, you have this organisation and their objective is actually to fly the plane and make the customer happy. The development of a core solution, like single view of the customer, has always been fairly challenging. So we took that upon ourselves, and we looked at how we could help with the heavy lifting. The challenges that we’re facing are also related to the legacy technology that is there. The PSS system, the loyalty system, and the CRM system extracting the data, collecting, merging of the duplicates and making it accessible to the downstream systems. They were relying on a lot of CDP systems (customer data platform), but those are actually more oriented toward marketing and collecting third-party data like social media information. So we are developing a solution, which you can download from our website. The solution is called “Unified Profile for Travelers and Guests”. With a click of a mouse, we connect with the back-end system, the passenger service system, the property management system, the loyalty management system and the CRM, and we actually merge the duplicates and make it accessible to the downstream system for messaging, for contact centre and customer care, for operations, etc. In the loyalty space, you see that happening every day: if you don’t log in with your password and your frequent flyer miles number, they don’t recognise you. But you can actually recognise the person as the phone number is the same, and the email may be the same. If you’re able to capture that and merge it, you can avoid, for example, duplication of accounts. Or you can identify customers who are recurring fliers and recurring users, but they’re not yet loyalty members, and you can actually target them better with promotions and give incentives to become loyalty members. These are the things that we are doing today. It is available on our website. We are really testing with a couple of large organisations, we are ingesting hundreds of millions of profiles in the safety and security of your own AWS environment. So, it’s still data that stays and sits with you. We don’t look at it; we don’t touch it; simply make it more accessible.
10:21
GLO: Your customers are large airlines, and they are now opening up and talking about partnerships, ecosystems, and the daily earn and burn capabilities. They want to give their loyalty members the ability to pay with loyalty points. If you’re, for example, at the airport, you go to Starbucks and pay with your loyalty points. How challenging do you find it to work with different systems? Most airlines, as you said, run on old legacy systems. How do you deal with that challenge at AWS?
Massimo Morin, Global Head of Travel/Passenger Airlines, AWS: We have customers who are indeed looking at that. The example that you mentioned is actually from Air Canada. They had a couple of projects that they were working on. The first one was the acquisition of Aeroplan to have access to the data. The second thing is that they were redesigning their mobile app and their website. So, what happened is that they decided from the get-go to put a thin layer on top of the PSS systems, expose some API’s, and build a mobile app and a website on top of these API’s. The interesting thing is that they then expose this API to a third party, like Starbucks or Uber. So with those APIs, you are now able to purchase a coffee or a ride with miles or money through the mobile app of Air Canada. And now, when you are at the airport, maybe your flight is delayed, or maybe you’re just waiting for your flight, you can spend 100 miles to buy a coffee at Starbucks, which is around the corner. Now servicing, retaining, and providing customer care have become much easier. That was the project of a couple of very bright individuals, who then started to lead a large transformation inside the organisation, inside Air Canada. Mark Nasr has been a visionary on this, and he is spearheading all this now. Air Canada is a large customer of ours; they are expanding this to the contact centre, the chatbot and support and moving into operations. It’s phenomenal to see what they’ve been doing.
Now, where does it take us? Where do we start? The idea here is that the legacy systems that are there usually tend to lead people to have a legacy mentality. So, you have all these data silos but also organisational silos and these risk-averse decision-making processes. Now, with the advent of the cloud and the use of AWS off-the-shelf services, you can scale it up and down the way you want. You can actually pay as you go, you can go global in a second, and you can innovate at scale. It makes it very easy to try things out. So now the concept of experimenting, trying stuff, and seeing what works and what doesn’t changes the dynamic. We help the organisation with workshops and explain how we do things at Amazon. We create teams of five, eight or ten people where you have the user of the application, the coder of the application, and the designer, and they own the process, and they run in sprints of four, six and eight weeks and see what works. That gives them the ability to be agile, to experiment, and to learn. And now, when they have an idea, they try it out, and they go into partnership with Uber, Starbucks, etc. This is happening throughout all the companies that we work with because what is really holding them back is not only the legacy technology, but also the mentality, the way of operating. That is actually what makes a difference.
14:25
GLO: Sometimes it’s also the fear of new technology and the fear of failing. It’s much easier to stay with the same technology because you’ve been using it for years, and nobody can blame you if it goes wrong.
Massimo Morin, Global Head of Travel/Passenger Airlines, AWS: There are a couple of aspects. You don’t know what you don’t know. And people are afraid of the unknown. The other thing is that if you break it, you own it. So this was working, but now it doesn’t work. And the thing is that the code is so old, the legacy is so old, running on mainframe, and you can’t find any more coders, let alone coders who will design and implement it. I think there is fear, but you can actually really peel it away, build on top of it, and start taking it away piece by piece. This really requires the vision of the executive. For that reason, I really like to talk and work with CEOs, CTOs, Chief Commercial Officers, and Chief Operating Officers, so we can show them what is possible and what they can do. And we simply do a proof-of-concept that you can execute very quickly and see what works. Those are the kinds of things that start to change people’s mindsets. But it has to come from the top down. I, for example, like to cook. You can be a great chef. You can have all the tools that you want. You can have the best ingredients that you want, but you always have to have the salt—the salt that binds everything together. And I think the executives at an organisation are the salt in your recipe. So you have to create a vision, communicate the vision, reward people who take risks and learn from what they do, and provide incentives to be part of their career plan and their career path. This is actually a winning strategy that will help you with other challenges like retaining and attracting talent by providing the right incentives and the right tools. I’m an engineer by training. So, what the engineer wants to do is play with the latest toy. If you give them a mainframe, it’s kind of hard to motivate them, but if you give them the opportunity to experiment and try new things, that is what they will love.
16:44
GLO: Are there any regional differences in the approach?
Massimo Morin, Global Head of Travel/Passenger Airlines, AWS: So there are differences in approaches and appetites for experimentation. The low-cost carriers are usually much more agile because they have a flatter organisation. The CTO is usually sitting next to the engineers. There is not this ivory tower kind of technology or organisation that you might find in a larger organisation. So you have that distinction. You also have companies that are more digitally savvy and digitally aware, like, for example, Expedia, Booking.com, or Priceline, which are asset-light. The other thing is the culture of risk-aversion. And that varies regionally. In Asia Pacific, the leader is dictating the marching order, or in America, it is a bit more entrepreneurial; it varies from organisation to organisation. We try to overcome this by bringing diversity. If you have diverse teams with different roles and different perspectives, it’s actually what helps to expand the horizon. We try to overcome this, but yes, there are some regional differences and cultural differences that can impact productivity.
