EL AL ISRAEL AIRLINES: THE ‘SMART AIRLINE’ OF THE STARTUP NATION
IT'S NOT JUST AN AIRLINE. IT'S ISRAEL
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EL AL ISRAEL AIRLINE NAVIGATING DIGITAL T TO BECOME A ‘SMART WRITTEN BY
AMBER DONOVAN-STEVENS
OCTOBER 2019
PRODUCED BY
K ANE WELLER
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ES: TRANSFORMATION AIRLINE’ e uro pe .busi ne ssc hief. com
EL AL ISRAEL AIRLINES
SHAHAR MARKOVITCH, THE CHIEF DIGITAL AND INFORMATION OFFICER OF EL AL ISRAEL AIRLINES, EXPLAINS HOW THE ADOPTION OF AI AND DATA ANALYTICS IS STRENGTHENING EL AL AS THE ‘SMART AIRLINE’ OF THE STARTUP NATION
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L AL is Israel’s national airline, boasting close to 6mn customers a year and US$2bn in annual revenue. Before joining
EL AL as the airline’s Chief Digital and Information Officer, Shahar Markovitch was the Chief Digital 04
Officer of Bank Hapoalim, one of Israel’s largest banks. Prior to that he was a partner of the consulting firm McKinsey & Company, and as such brings experience of shaping the digital strategy and leading digital and IT transformations of organisations all over the world. A little over a year ago, Markovitch brought this expertise to EL AL to assist in the creation of a new division that combines IT and digital to drive the technological transformation of the company. Markovitch begins by sharing that there are two key disruptions in the airline industry today. The first is “the digital airline, which is a combination of both new business models like the low-cost carrier model with new open sky regulation.” Secondly, he adds that “the customer is becoming more digital” with access to dozens of options for booking their flight. Yet Markovitch also says that there is a new OCTOBER 2019
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EL AL ISRAEL AIRLINES
revolution hurtling towards the airline
business, airlines are one of the
industry: what he calls the smart airline
industries to benefit most from AI and
revolution, major disruption fueled by a
machine learning technologies,” he says.
combination of data and machine
“When we built our strategy for EL AL’s
learning. A key component of a ‘smart
technology and digital transformation,
airline’ is the ability to leverage AI,
we realised that we need to win in these
machine learning and analytics to deliver
two fronts at the same time. On the one
a better, more personalised customer
hand, we had to fully transition to a
experience, drive revenues and
‘digital airline’ to remain competitive,
profitability, and improve operational
on the other hand, we must build capa-
efficiency. “According to research,
bilities for becoming a smart airline
due to the massive complexity of the
in order to remain ahead of the next
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OCTOBER 2019
CLICK TO WATCH : ‘EL AL ISRAEL AIRLINES: MILESSTONES’ 07
disruption.” EL AL also realised that one of its main differentiators in the technology space is the fact that it is the airline of
native” capabilities in its day to day life? 3. How do we make ELAL’s “IT factory” a competitive differentiator?
the ‘startup nation,’ being immersed in ecosystems in the world. This gave birth
1. IMPACT OF TECHNOLOGY AND ROADMAP FOR THE ‘SMART AIRLINE’
to its vision of becoming the smart airline
EL AL started with defining a clear
of the startup nation.
roadmap on how technology as a
one of the most vibrant tech and startup
To achieve this vision, the company
whole will transform the company.
defined a transformation plan centered
“This is what our business should
around the following questions:
look like in the future across all areas
1. How will technology affect every aspect of our airline operations? 2. How will ELAL infuse “digital
of operation, from front to back – anything from having leading digital websites all the way through having e uro pe .busi ne ssc hief. com
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automated back-end operations to
nance of its planes. As components to
dynamic and smart routing to giving
planes are expensive, aircraft are
our employees better smart digital
regularly maintained. Every few
tools,” says Markovitch. Given the
months each plane is taken apart and
importance of operational excellence
reassembled again to inspect all of its
for airlines, a large part of the roadmap
components. To manage this, Marko-
addressed these areas. For example,
vitch explains, EL AL has implemented
one of the areas where EL AL sees
a system designed by Swiss Aviation
huge potential for leveraging technology
called AMOS, which digitised the
to transform operations is the mainte-
end-to-end maintenance process.
E XE CU T I VE PRO FI LE
Shahar Markovitch Shahar Markovitch is Chief Digital and Information Officer of EL AL Israel Airlines as of March 2018. Shahar joins El Al from Bank Hapoalim, Israel’s largest bank, where he served as Chief Digital Officer, responsible for digital strategy and roadmap, customer experience, digital platforms, and all digital related projects. As part of his role there, Shahar launched a number of award winning digital products, including bit, Israel’s largest P2P payment app. Previously he was a partner in McKinsey & Company, focusing on digital, technology, and innovation, and leading digital transformations for the world’s leading organisations. Before McKinsey Shahar held technology and leadership positions in a number of Israeli high-tech startups and partner communication. Shahar holds a Bachelor of Science degree with distinction in Computer Science and Maths from the Hebrew University in Jerusalem and a Master in Business Administration from MIT in Cambridge, USA, with a 5.0/5.0 GPA. He was recognised as one of Israel’s top 100 people in digital for 2017.
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EL AL ISRAEL AIRLINES
“ A KEY COMPONENT OF A ‘SMART AIRLINE’ IS THE ABILITY TO LEVERAGE AI, MACHINE LEARNING AND ANALYTICS TO IMPROVE THE AIRLINE WITH THE EXTRACTED DATA” 12
— Shahar Markovitch, Chief Digital and Information Officer, El Al Israel
OCTOBER 2019
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C O M PA N Y FACT S
• One terabyte of data is generated from every flight • EL AL is Israel’s national airline boasting close to 6mn customers a year, and US$2bn in annual revenue
OCTOBER 2019
EL AL is also extending this system to create a fully paperless maintenance process where all of the ground technicians will use tablets for maintenance activities. Another example is end to end management of finances and process management. “We are working with SAP to digitise, automate and create the technology backbone for our entire finance and procurement operations, including some of our warehouse management activities.” This allows a greater streamlining of operations, saving time and money.
2. INFUSING “DIGITAL NATIVE” CAPABILITIES IN THE DAY TO DAY LIFE OF THE AIRLINE As part of the transformation, ELAL is focusing on embedding “digital native” capabilities that are a must have for every company operating in the digital age in the areas of customer experience, digital platforms, and data and analytics. “We start with customer experience, and how our plan fits with the end to end customer journey,” Markovitch explains. “It’s about how we leverage methodologies like design thinking to drive the actual value e uro pe .busi ne ssc hief. com
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$2.1bn Approximate revenue (USD)
business makes, and using insights to increase profitability. These capabilities work together to deliver innovative digital products to EL AL’s customers. For example, customer
1948
research showed that one of the pains for customers traveling abroad is the
Year founded
cost of a taxi to the airport. As a
6,000
innovative digital platform called
Approximate number of employees
response EL AL developed an “Taxi Pool”. This is one of the first services of its kind, designed to facilitate sharing taxis for customers who travel from the airport to the same hotel or hotels in close proximity. The system connects people who are
proposition that we offer our customers
taking the same flight, matching up
as part of our overall transformation
groups who can pool a taxi to save
roadmap.” Then EL AL considers its
money. This service is provided by EL
digital platforms, which includes not
AL to customers all over the world, no
only upgrading its digital channels but
matter what airline they are using.
also transforming the way the company
These capabilities are further
thinks of and develops these channels,
accelerated by implementing start-up
moving from “a project view of the world
technology solutions. One example is
to a product view of the world” with the
a hybrid chatbot EL AL launched to
aspiration of operating like a “native
assist customers, which can be
digital player”. The last value multiplier is
accessed through WhatsApp or
leveraging data and advanced analytics,
Facebook Messenger. The hybrid bot
which Markovitch says is essentially
mixes state of the art AI with human
managing data as an asset, embedding
support. Should the bot be unable to
data-driven tools into every decision the
provide a solution to the customer, e uro pe .busi ne ssc hief. com
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AMOS. AGAIN.
AMOS, the world-class M&E software solution, supports EL AL’s vision to become a paperless company. Swiss-AS recognizes EL AL as one of the early adopters when it comes to digitizing and then later digitalizing all maintenance processes. EL AL is a customer that is investing a lot of effort in fully understanding the potential that lies in AMOS and exploiting it to the maximum.
“ Implementing AMOS in our organization enabled us to have end to end solution with full transparency of M&E processes & costs. We can now better control the work in all our departments, improve our inventory management and establish better automated connections to our customers and suppliers. AMOS enables us to constantly improve our processes to be lean & efficient.” EL AL’s Department Manager SW implementation in M&E
SWISS-AS.COM
member of the support team, without
3. TURNING THE IT FACTORY TO A COMPETITIVE ADVANTAGE
the customer ever needing to be aware
Markovitch highlights that the third pillar
of this shift. Another example of a
of the company’s digital transformation
digital platform that combines data and
is upgrading its technology factory. This
analytics with advanced data analytics
focuses on transforming the entire
is Bid2Fly. This solution uses data
technology stack to enable faster time
analytics to analyse low sale flights
to market and greater flexibility while
and combine that with the buying
ensuring resilience and security in
patterns of a customer. If a customer is
everything EL AL does. Part of this
unlikely to buy a flight, they have the
includes moving towards a more agile
opportunity to save up to 50% on a
way of working and changing the
flight by bidding on it at auction that
software architecture and infrastructure.
may not have sold at all otherwise.
In this activity as well, the focus in on
there is a seamless connection to a
OCTOBER 2019
bringing business value and competitive
flexibility the business demands.
advantage through the technology
EL AL has also implemented a Big Data
factory. For example, “How do we
solution based on Cloudera. “The
enable better services for our custom-
queues, the various dates, and the
ers through API and open systems?
analytics we run on the Cloudera
What value can we bring by accelerating
infrastructure are to decide what kind of
our move to the cloud, and how will the
marketing message we should provide,
automation of our IT operation improve
and how to better appeal to each
our customer satisfaction”
customer,” he explains.
When faced with the goal of creating a
As EL AL looks to the future,
more personalised customer experience
Markovitch says that there is already a
using its Adobe marketing automation
lot in the pipeline. After a recent upgrade
solution, the focus was on finding a
to the mobile app, the company has
solution that could process large
launched a new website, which will
amounts of data but also provide the
improve upon customer engagement and allow customers to access and better understand their frequent traveller miles. Additionally, the airline is acquiring new planes including the Dreamliner 787 which are being equipped with Wi-Fi. “Overall, we’re going through quite a lot of changes and technology is a vital part of these changes.” With a clear path set, it is without a doubt that EL AL will continue to strengthen its position as the ‘smart airline’ of the startup nation.
IT'S NOT JUST AN AIRLINE. IT'S ISRAEL
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El Al Israel Airlines www.elal.com