Accelerating the pace of digital transformation
The COVID-19 pandemic has had a devastating impact on the aviation industry. As a leading airline IT provider with more than 350 customers worldwide, Lufthansa Systems has its finger on the pulse of the industry and knows the current challenges of the sector inside and out. In this interview, Olivier Krüger, CEO of Lufthansa Systems, discusses how innovative solutions will help overcome the ongoing pandemic, and he shares the most valuable lessons he has learned on the rollercoaster ride of recent months.
Almost a year ago, COVID-19 hit the world and triggered an immense crisis in the aviation industry. In your opinion, what was the biggest challenge at the time?
In the early days of the global pandemic, airlines were faced with an unprecedented situation. On the one hand, passenger numbers had collapsed and aircraft fleets were almost completely grounded. On the other hand, the systemic importance of air transportation once again became evident in this historical situation, as airlines had to return citizens to their home countries and cargo flights maintained supplies. We took our responsibility as an IT provider very seriously and worked hand in hand with our airline customers to help them respond to these new requirements in the best possible way. In a very tight time frame, we provided many airlines with all of the data and charts they urgently needed to conduct repatriation and cargo flights, including transporting protective equipment to where it was needed.
From your perspective, what are the most significant aspects of successful crisis management?
In these entirely new circumstances, airline executives had to manage two major tasks: protecting the health of their employees and passengers, and safeguarding liquidity. As the crisis continues, we are seeing a consolidation process on the market, and only the airlines that can adapt to these new circumstances will emerge stronger. With this in mind, it is evident that the investments made in innovation and digitization in previous years are paying off now. Smart technologies and solutions help airlines respond quickly to changing demands, particularly as they face increased complexity due to the global pandemic.
How does increased digitalization offer a substantial advantage right now? Can you give us a specific example?
Digitalization affects almost all airline processes and can make them safer, more efficient and even more comfortable, whether on the flight deck, in the cabin, or on the ground. The air transportation industry has repeatedly attracted the attention of other sectors with groundbreaking innovations such as electronic passenger tickets, flying hotspots, and the development of the paperless cockpit. Digitalization can and will play a massive role in tackling the current pandemic as well. Just think of the different travel restrictions and imminent vaccination requirements. Smart technologies that are integrated into an airline’s core system can help airlines manage these demands, and simple, well-integrated processes also support the passenger journey. But over the last year in particular, airlines have needed a faster and more flexible way to adapt to new market conditions in terms of demand. To tackle this particular challenge, we developed an innovative solution that promptly supplies reliable market intelligence. This New Demand Indicators Dashboard (NDI) is a brand-new tool we created within just a few weeks by leveraging an agile development framework. It displays schedule insights, weekly market size updates, and current travel restrictions. Based on this comprehensive information, decision-makers can make smart, data-driven choices when rebuilding airline networks in the recovery phase.
What does this shift mean for Lufthansa Systems? How is the company dealing with it?
For over 25 years, we have been shaping the digitalization of the airline industry with groundbreaking ideas, many of which we have turned into market-leading IT solutions. The COVID-19 crisis showed us that we were right to start our digital transformation journey so long ago. When we had to shift our operations to home offices from one day to the next, we were well prepared to continue serving our customers’ needs. The pandemic forced us to interact fully digitally, but at the same time, we learned to appreciate the power of the virtual workplace. This brought us to a completely new understanding of collaboration at our sites in more than 16 countries worldwide, and we have definitely grown closer as a company.
Effective collaboration across functions and locations is critical to handling a crisis. How can organizations achieve this?
The pandemic has undoubtedly driven new ways of working, and we all had to adapt to new models almost overnight. Our top priority was to assist our employees as much as possible and offer them guidance in this transformation process. As a forerunner in digitalization in the Lufthansa Group, we made it our mission to proactively shape the concept of “New Work” throughout the Group by providing an interactive guide in the form of a Playbook. Anyone who would like to learn more about this might be interested in joining me in the panel discussion about “combining effective workforce management and intelligent operations to help rebuild in 2021” on Wednesday, April 21 at 5:00 PM at the World Aviation Festival Virtual Week.
Before we close, do you have a piece of advice that you would like to share with industry colleagues, given the uncertain future we all face?
Almost one year after the World Health Organization declared the outbreak of the coronavirus disease to be a public health emergency, the aviation sector is still flying low and struggling to strategically adjust to the “New Normal.” COVID-19 has accelerated the need for digitalization for years to come, and this digital wave will probably transform our business forever. Adopting smart, innovative technologies will be a source of cost efficiencies and a competitive factor when adapting to new requirements and passenger expectations. The crisis should be an incentive for us to rethink our industry, reassess digital strategies, explore the potential of new technologies such as artificial intelligence, big data and analytics, and take inspiration from these promising developments. Other challenges, such as the sustainability agenda, are just around the corner. We need to pull together and make every effort to prepare for the future.