How_mobile_technology_will_enhance_passenger_travel by Paul Langer

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HOW MOBILE TECHNOLOGY WILL ENHANCE PASSENGER TRAVEL

New Frontiers Paper No.1 Frontiers in the Mobility New Paperseries

Specialists in in air air transport transport communications communications and and IT IT solutions solutions Specialists

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Contents

Part I – Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 How mobile devices will impact the air travel experience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4 Can mobile-based services meet the hype? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6 Part II – Making the case for mobile based services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 Setting the scene . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 Where can mobility services help?

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

Keeping passengers informed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 Enabling self-service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 Realize paperless travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 Enabling m-payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10 Passenger flow management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 As a channel for one-to-one marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 Inflight entertainment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 The way forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14 Building a business case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14 Need for integrated infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14 Development standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14 Theft and loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 Passenger acceptance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 Notes and references . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16

At-a-glance e-wallets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10 Content rich v Context rich . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 Near Field Communications (NFC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12 Google Android . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15

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Part I – Overview Foreword If you travel by air the chances are you are carrying a mobile device. Surveys consistently reveal that 90% or more of airline passengers carry a mobile device with them. In five years time, these ‘digital travellers’ will have on-demand access to a range of mobile enabled services, giving passengers, for the first time, a proactive role in their travel experience while on the move. Mobile check-in and SMS paging for flight information are already available today. But in the future mobile devices will be increasingly used at every stage of the journey, including onboard the aircraft, giving passengers the option to avoid many of the traditional travel touch points, as they conduct their journey. Mobile enabled services, such as automated boarding, mobile payment, and baggage tracking will be the rule rather than the exception. A glimpse around the corner Imagine taking a flight where as a passenger: I

Your mobile phone holds all your travel documents, including an e-passport

You can avoid travel stress points

Spend less time queuing

Receive a timely reminder that the aircraft is boarding, with directions to the gate

Avoid waiting at the carousel for late bags

Have immediate access to applications that allow you to change your travel itinerary wherever you are

And where as an airline or airport you can: I Re-think your customer service by communicating directly with each passenger to personalize their entire travel experience I

Achieve cost savings through operational efficiencies

Boost ancillary revenues through one-to-one marketing and mobile payment

Mobile-based services will be the enabler of this vision.

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How mobile devices will impact the air travel experience

Keeping passengers informed. Surveys indicate passengers are highly concerned about delays and cancellations, but particularly in times of disruption it has been difficult to get accurate information to passengers quickly. Rapid dissemination of information, via mobile devices, can reduce frustration and also give passengers a degree of personal control of the recovery process using self-service technologies. By the end of 2009, over 90% of the world’s airlines expect to offer SMS notification as an optional service to their passengers1. Enabling self-service. Mobile self-service applications will offer passengers greater control throughout their journey – including in the aircraft cabin. Check-in using a mobile device is already available. By the end of 2009, over threequarters of airlines will offer mobile check-in, compared to only one in five airlines currently2. Progressively new mobile functionality will become widespread, such as allowing seat selection or meal preferences to be specified, or even filling in e-landing cards for immigration, during the flight. Making travel paperless. Often cited as the end game for modern air travel, the vision of global paperless travel will take a big step forward as mobile devices become increasingly capable of acting as personal travel folders by storing information presently kept on paper or plastic – from boarding passes and baggage receipts to frequent flyer and credit card data. There is also no technical impediment to having visa and immigration forms stored on a mobile device.

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Enabling payment. Increasingly mobile devices will contain e-wallet capabilities making them perfectly suited to the travel experience, with passengers making relatively low-value purchases, and often having to deal with more than one currency. A range of goods and services from excess baggage or airport taxes to duty free shopping or a sandwich on the plane could soon be paid in this way. Total transaction values for mobile payments globally could grow tenfold over current levels to reach US$22 billion by 2011.3 Managing passenger flow. Location sensing via mobile devices will make it increasingly easier to locate late boarding passengers and guide them quickly to the aircraft. Cambridge University’s Auto-ID Lab suggests that location-sensing technology could reduce delays by as much as 6%4 – saving airlines at least US$600 million a year. Providing a channel for one-to-one marketing. Marketers will be able to send targeted content to passengers’ mobile devices. One trial at Manchester Airport has seen recipients of vouchers sent to a mobile phone spend 45% more than ordinary shoppers at the retail outlets. As ‘context-aware’ applications and services - that take into account criteria such as location, user profile, and time – become mainstream, there will be widespread adoption of one-to-one marketing and customer care through mobile devices – not just by airport retailers but also by airlines. Providing a primary conduit for inflight entertainment. Passengers will increasingly use mobile devices to create their own personal entertainment system for use onboard the flight. New mobile devices give passengers the ability to download content from the Internet before leaving the ground, giving airports the opportunity to charge users for accessing the content.

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Can mobile-based services meet the hype?

As with any new technology, trying to separate reality from hype is a challenge in its own right, and mobile has proved no exception. Nevertheless, there are strong expectations that mobile device based services and applications will eventually become mainstream within air transport. Not least because mobile phones will be an indispensable tool for the next generation of passengers, as they are for frequent flyers now, as well as further opening the door for the air transport industry to relinquish paper documents. However, recognizing this vision and reaching it are two different things. At the heart is the need for robust business cases for the different services. Significant financial benefits could be achieved from incremental improvements in areas such as on-time departures, customer satisfaction, and reduction in knock-on delays across an airline network. However, for these to materialize, mobility technology will need to be fully integrated into the operations of the airlines, airports, and ground handlers. Inevitably, a proportion of passengers will not carry mobile devices or will suffer theft or loss of the device. Mobile technology will therefore be a complementary technology in the medium term, running in parallel with existing systems and processes. However, despite this added level of complexity, mobile based services will create value for airlines by delivering improved passenger benefits, such as personalized services, while also generating revenue opportunities and operational efficiencies. Nevertheless, privacy and trust concerns of passengers will need to be addressed. Services such as location sensing and m-marketing will require travellers to engage in some trade-off of privacy in order to realize the full benefits that mobile based services can offer. Despite the challenges, within five years it should be easier for passengers to access their flight bookings and perform tasks such as check-in while on the move rather than from a fixed location. The travel experience will also be increasingly paperless and plastic-less as payment card and frequent flyer information finds its way into mobile devices. That should translate into a better-quality travel experience all round, with more time to eat, shop, and relax. For time-pressed business travellers, that should also mean less time wasted in airports.

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ÂŠ SITA 2009

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Part II – Making the case for mobile based services Setting the scene While there’s inevitable hype about any new technology, there are clear signs that mobile has something to offer the air transport industry. Surveys consistently reveal that 90% or more of airline passengers carry a mobile device with them when they travel5, indicating that there are few people who now transit an airport without being connected. Increasingly, people are ‘digital travellers’. This is not surprising. By the end of 2007, mobile penetration had surpassed 100% in over 59 countries, with some 3.3 billion mobile subscribers in 224 markets worldwide6. At current rates of growth there will be five billion mobile cellular subscribers worldwide by the year 20117. By then, most mobile phones will combine the functionality of communications devices with that of computers, TVs, wallets, personal navigation systems, as well as other sophisticated software to browse and search the Internet. This is a continuation of a trend that has seen communications move beyond voice towards data-oriented ‘conversations’, whether SMS, email, Instant Messaging, or the web. For travellers, these devices will also carry frequent flyer profiles, itineraries and e-ticket information, boarding passes, and biometrics. There is increasing interest from airports and airlines to tap into this trend. Airports want to maximize revenues, as well as keep airport visitors happy. Mobility services provide an opportunity to do both. Likewise, airlines also expect to leverage mobile devices to deliver passenger service benefits in situations where this can be achieved at little added cost. However, the main drivers for large-scale investments in mobility technology are likely to be access to new revenue streams or incremental improvements in operational efficiencies, such as reductions in passenger processing costs or flight delays. In 2006, delays were responsible for some US$7.7 billion in direct operating costs to US-based airlines8. If even a small percentage can be avoided by getting passengers to the departure gate on time, it will have an immediate effect on the bottom line and improve customer satisfaction. Mobility services for passengers have already moved beyond countries with high mobile penetration rates. In particular, SMS is proving increasingly popular in large fast-developing markets, such as India, as a means of booking, rescheduling or cancelling flights. A number of airlines, mainly in the Asia-Pacific region, have also instigated trials of voice recognition check-in.

Operational efficiencies

• Self service • • Paperless travel • • Managing passenger flow •

Better CRM

• Keeping passengers informed • • one-to-one contact •

Revenue opportunities

• Access to entertainment • • one-to-one marketing •

Improved customer satisfaction

• Reduced passenger frustration • • Better travel experience •

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Where can mobility services help?

Using mobile devices to keep passengers informed Lack of information has always been a major source of frustration for passengers, particularly at times of disruption. In a SITA Passenger Self-Service Survey in 2007, ‘staying informed’ came third on a wish-list of travel elements passengers most wanted to change about the travel experience, just behind baggage retrieval times and security screening9, while 79% of passengers would want to receive an SMS notification service. In the past it was difficult to get accurate information to passengers quickly. But with almost all travellers now carrying a mobile device, airlines and airports are able to deliver effective communications to passengers and in so doing provide a valued customer service benefit. Today, close to half the world’s airlines offer SMS notification as an optional service to their passengers, and 91% expect to do so by 200910. Currently, the range of information is limited, consisting mainly of routine flight status notifications, but mobile technology will increasingly allow richer information to be delivered to passengers wherever they are – at home, at work, on their way to the airport, at the airport, and even in the air. This will include both ‘nice to know’ information, such as flight status and frequent flyer mileage, but also more importantly, information that keeps passengers informed of any disruptions to their journey. In particular: I Flight delays or cancellations – possibly saving an unnecessary journey to the airport I I

Changes to a departure gate Failure of baggage to be loaded or transferred – saving unnecessary waiting at the destination carousel and allowing instant initiation of the reclaim process.

Once informed about a particular event, passengers can then follow the status of the recovery process or use self-service technologies to take some control of the situation – through services such as interactive baggage tracking, or onward check-in.

Using mobile devices for self-service Mobile self-service applications will progressively offer passengers the ability to play a more active role throughout their journey – including in the air. To date, it has focused mainly on mobile check-in, where passengers check-in on their mobile device and are sent a 2D barcode in return. However, despite the 2007 Airline IT Trends Survey indicating that around one in five airlines currently offer mobile check-in, passenger uptake has so far been limited. Data from the 2007 Passenger Self-Service Survey 2007 revealed that less than 1% of all travellers used the service at three of the busiest airports globally. Nevertheless, the same self-service survey found that almost half of respondents would use mobile check-in if it was available, suggesting that adoption rates will improve as more airlines offer the service and passengers awareness of its availability increases.

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As travellers become more accomplished using mobile self-service, airlines will expand the functionality to cover all aspects of the passenger’s journey: I Making bookings and managing reservations, including registering personal preferences such as meal selection I

Handling the check-in process, including seat selection

Accessing airport lounges

Filling in e-forms – for anything from visa applications to landing cards required at immigration

Checking baggage status – for tracking lost or delayed baggage and commencing lost baggage claims

The widespread adoption of mobile self-service applications by passengers will be closely linked to the acceptance of, and ability to standardize, paperless travel. The technical and regulatory framework already exists in many developed countries to make services such as mobile boarding for an individual on a domestic flight a relatively easy proposition. However, it is likely to be some time before airlines are able to deliver a consistent mobile experience to passengers making an international, multi-segment journey. Even in markets where the environment is favourable, the successful uptake of mobile self-service applications will be driven by the relative ease for passengers to use them. A simple portal design, which is both intuitive and delivers quick and easy access to relevant functionality, is therefore paramount. Mobile portals need to complement existing web portal capabilities rather than replicate them. Mobile self-service will therefore also remain for the foreseeable future a complementary technology, not a replacement one. Existing processes, such as those for online and kiosk check-in, will need to be kept in place, maintained and evolved at the same time as new mobile services are introduced.

Using mobile devices to realize paperless travel The concept of paperless travel has a compelling logic for all stakeholders, from airlines, airports, and governments to passengers and the environment – and much has already been achieved with the global adoption of e-ticketing and the introduction by IATA of a new global standard for mobile boarding passes based on the 2D bar code. Paperless travel is already a reality in a number of locations, including some domestic departures in Norway, Japan and Germany; a number of other trials and pilot programmes are also taking place in different countries, including Canada and Spain. With mobile devices omnipresent and increasingly capable of acting as personal travel folders, they are an obvious place to store information presently kept on paper or plastic – from boarding passes and baggage receipts to frequent flyer and credit card data. In the future, more airports and government authorities will authorize the use of electronic boarding passes, with forwardlooking countries taking this further by making the visa application and issuing process fully digital. Ultimately, there is no technical impediment to stop the visa and immigration form from being stored on a mobile device, where it can be scanned on departure or arrival, along with the ticket and boarding pass. This will likely be enabled by Near Field Communications (NFC) technology, which allows data to be stored and small applications to be run on an RFID-like chip (see box on page 11).

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Within specific regions or markets – such as the EU – the use of biometrics for personal authentication in combination with a mobile device offers a genuine opportunity for cross border paperless travel.

Using mobile devices for payment Another area where mobile devices will bring convenience to passengers is as a means of payment. Contactless transactions are perfectly suited to the travel experience, with passengers on the move, mostly making low-value purchases, and often having to deal with more than one currency. Today, mobile payment is already making its presence felt in airports, particularly in highly-advanced markets such as Scandinavia and parts of Asia-Pacific. Applications which are particularly appropriate for mobile payment in the air transport environment include: I Airport parking I

Excess baggage charges

Ticket upgrades

Access to airport lounges

Retail airside (including vending machines)

Onboard shopping (duty free, plus food and drink)

Wi-Fi access

At-a-glance: e-wallets e-wallets – also known as digital wallets – allow users to make digital payment transactions quickly and securely. An e-wallet essentially functions just like a physical wallet, in that it is used as a means of storing various forms of electronic money (e-cash) which can then be used to pay for goods or services. The mechanism for payment varies, but usually relies on either a card being swiped through a reader, or some form of contactless payment using wireless technology such as Near Field Communication (NFC) technology. (See box page 11.) So far, mobile payment technology has been fairly slow to take off, but that is expected to change rapidly within the next few years with the widespread adoption of e-wallets (see box) and e-wallet capabilities in mobile devices. Total transaction values for mobile payments reached US$2 billion in 2007 (1% of all transactions), but is predicted to grow tenfold, to US$22 billion by 2011, according to Juniper Research11. As e-wallets and contactless payments become more widely adopted and used, customers and providers alike will come to benefit from the key advantages they offer over other payment methods, including: I Enhanced security I

Removal of the need to manage labour-intensive cash collection processes

The need for fewer payment cards; and importantly

Reduced queuing time

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The successful uptake of services will depend on widespread user adoption, which in turn will mean reassuring passengers that the services are not just beneficial, but safe and secure as well. Mobile payment applications must also be intuitive. Small transactions are easy to manage and are low risk, but secure systems will need to be put in place to manage larger payments – such as buying air tickets. The NFC trial taking place in London (see box) may point the way forward, since it involves a credit card company and a bank as well as a hardware manufacturer, a mobile phone operator and a transport authority.

Using mobile devices for passenger flow management One of the biggest issues facing airlines and airports is passenger growth, which is forecast to rise from just over two billion in 2006 to 2.75 billion by 201112. This will challenge many aspects of passenger flow management and aircraft turnaround. Airlines, in particular, have a strong interest in knowing where passengers are at any particular time, as late boarding passengers and no shows have a negative impact both on operational efficiency and on the bottom line. Delays, which cost the industry tens of billions of dollars a year, can be mitigated by the prompt arrival of passengers at the gate. Currently, barely discernable public address announcements for late passengers are a common feature of the airport experience, but with the ‘opt in’ of users, airports and airlines will be able to use location-sensing applications to determine the physical location of any mobile device within the airport environment and send a message direct to the person with directions to the gate. Evidence indicates that such one-to-one contact with the passenger is highly effective, raising genuine hopes of tackling the issue. Cambridge University’s Auto-ID Lab suggests that location-sensing technology could reduce ‘passenger to gate’ delays by as much as 6%13 – saving airlines at least US$600 million a year14.

At-a-glance: Near Field Communications (NFC) When combined with a mobile device, NFC becomes particularly powerful, as it can be used to store data such as a mobile boarding pass or frequent flyer details, as well as containing an e-wallet. Since NFC is powered by the scanning device, not the phone or PDA, it also works even when the battery has run down – thereby overcoming one of the key concerns about mobile device dependency. NFC in a transport-related context is currently under trial in the UK, where operator O2 launched a large-scale six-month pilot project at the end of November 2007. The trial allows some 500 subscribers to use their mobile phones as tickets on public transport in London, as well as to pay for goods, process credit card payments and even communicate with interactive billboards. If successful, it will see Londoners able to use their phones as e-wallets across the capital. “It’s easy, it’s simple, and it’s safe,” says Sébastien Fabre of SITA’s Innovation and Planning team. There are still some standards-issues to resolve, and much will depend on how rapidly NFC is taken up by the makers of mobile devices – but the indicators are strong, with Frost & Sullivan forecasting that a third of all mobile phones will be NFC-equipped within three to five years, and ABI Research projecting that 450 million mobile phones will be NFC-enabled by 2011, representing close to 30% of handsets shipped worldwide that year.

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Knowledge of a passenger’s location makes it possible to influence their behaviour and deliver a personalized service throughout their journey. Examples include: I

Directions to the nearest available parking space

Directions and time needed to get to the gate from the passenger’s current location

Delivering a map of their immediate vicinity

Informing ‘meeters’ and ‘greeters’ about the progress of arriving unaccompanied minors or passengers with special needs

Location-sensing and context-aware technologies (see box, below) – that take into account criteria such as location, user profile, and time – also have great potential benefits for improving an airport’s operational processes. Congestion is already a problem from the car park to security screening to baggage handling and there is evidence that this may be impacting the growth in non-aeronautical revenues on which airports increasingly depend. Figures from ICAO show non-aeronautical revenues remained fairly static at around 40% of total airport revenues between 2003 and 2005. Preliminary results from trials taking place at a number of airports around the world, including Geneva, Manchester and several airports in the Asia-Pacific region, indicate that mobile based services are effective in helping reduce delays for airlines by improving the flow through the airport, as well as being popular with passengers.

At-a-glance: Content rich versus context rich The PC Web experience has been built largely on a ‘content rich’ model where "editors" would publish information on the web, for the users to find and read. The first opportunities offered by mobile-based services are likely to follow this path despite some inherent limitations, such as small screen size. As this evolves it will drive the proposition towards using mobile devices mainly for specific transactional applications following a "request / respond" type of model, keeping the "surf and search" part of the experience for the PC world. These types of mobile-based services are already being deployed in the air transport industry for SMS notification services (for example, flight delays). An alternative evolution is that as the next generation of mobile devices make the current constraints, such as screen size or network speed, irrelevant. Applications will be developed specifically for mobile usage based on a ‘context rich’ model. In this reality, mobile devices will know who you are, where you have been, where you are going, what entertainment you like (movies/music), what you buy (transaction history), and much more. This will enable the user to be “directed” rather than needing to click or enter a URL to move around. These services will push to passengers just enough content for them to get done what they want to do...while on the move.

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Using mobile devices as a channel for one-to-one marketing Mobile devices provide a highly attractive channel for delivering marketing messages for two main reasons: I Generally, the device is always on. This will soon be so even in the aircraft cabin I

Mobile devices already contain a high degree of personalization

When combined with location sensing, mobile devices can be a driver for revenue generation through one-to-one marketing of product and services, with local content, such as making local weather or tourist information available. The PhocusWright Travel 2.0 Consumer Technology Survey found that 30% of travellers, during their trips, would be interested in receiving special offers via their mobile device about local restaurants and activities. Trials, such as the one with Bluetooth enabled phones at Manchester Airport, show a significant commercial upside to welltargeted advertising sent direct to passengers’ mobile devices after they opt in for the service. At the moment this takes the form of using location-sensing to send promotional messages or vouchers when a passenger is close to the point of sale – for example offering 10% off duty free goods, or a three-for-two offer from a book shop. As mobile technology evolves, location-sensing will be combined with ‘context-aware’ applications and services to ensure that the passenger’s pre-set preferences are respected so that the personalized content is delivered to the mobile device at the right moment. Scenarios include informing a passenger where the closest Wi-Fi or network coverage can be located. Retail sales have been shown to strongly increase without unduly annoying the passenger when there is a close proximity to the retail outlet sending the message, as well as a careful limitation concerning the volume of messages sent and their appropriateness to the passenger’s time constraints. Widespread adoption of one-to-one marketing of this kind will not just be restricted to airport operators and retailers but also used progressively by airlines. Carriers will solicit their frequent flyers to shop online, for example, prior to collecting the goods onboard or in the airline lounge – or have them shipped home by post.

Using mobile devices for inflight entertainment The mobile phone is “by far the most popular distraction” for UK children under 16 years old, a survey by the UK media and communications regulator, Ofcom revealed15. It underlines the belief that the next generation of passengers will increasingly use their mobile devices as personal entertainment devices while they travel. Apple® has already teamed up with six major airlines to deliver integration between iPod® and in-flight entertainment systems by allowing iPod video content to be viewed on aircraft seat back displays. This is just the start of a new trend in which passengers will have the ability to download and view content from the Internet while on the move. US-based Aircell has signed up a major US carrier to provide wireless broadband connectivity for domestic passengers in the cabin, while in Europe, Air France and OnAir launched the world’s first in-flight mobile phone service on board international flights in December 2007. As these types of services evolve, airlines and airports will both have the opportunity to provide mobile inflight entertainment to passengers from portals before or onboard the flight – and take a cut from content providers at the same time. Airports will also have an additional opportunity to charge users to access this content.

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Over the next five years, delivering mobile based services and applications to digital travellers will create new opportunities and benefits for stakeholders in the passenger’s journey: I Cost savings I

Operational efficiencies

Personalized relationships with customers

Higher customer service and satisfaction levels

Additional revenue opportunities

However, to bridge the gap between now and then requires new challenges to be recognized and addressed.

Building a business case For airports and airlines to view mobile-based services and applications as a strategic opportunity rather than a cost burden will require a robust commercial case to determine the business value. To extract the full benefits, mobile technology will need to be fully integrated into the existing operational processes of airlines and airports, making software, systems integration, process redesign and organization impacts, a significant part of the business case. Trials and pilot programmes form a crucial first step for airlines and airports to gain real situational data to act as inputs, as well as identifying obstacles and issues that will need to be resolved before larger scale deployments. Without them, concerns will remain over costs, the maturity of the technology and its ability to deliver the promised benefits, which will lead many in the industry to adopt a ‘wait-and-see’ approach. One consideration is to perform trials in collaboration with telecom service providers and consumer-led businesses.

Need for integrated infrastructure The delivery of mobile based services for passengers will require a strategy rethink for airline and airport Information & Communications Technology (ICT) infrastructure. The challenge will be to create a platform that can integrate data located in dispersed systems – some local, others remote – and then deliver it in a reliable, secure and efficient manner to provide ‘real-time’ information and context aware services. The task is made harder by the heterogeneous nature of the mobile world, with a diverse set of mobile devices running a variety of software and operating over a fragmented network infrastructure. Such a fractured environment inevitably acts as an inhibitor to widespread adoption of mobile-based services. Airlines, in particular, need to assess their overall mobility infrastructure requirements at the airport, including the needs of their work force, some of whom will use mobile services to serve passengers and carry out operational tasks.

Develop standards If mobile technology is to be used pervasively throughout the air transport industry then a key requirement is cross-industry collaboration with the IT community to develop standardized processes and applications to allow interoperability. Google Androïd, being developed as part of the open handset alliance project, may be a way forward. It aims to deliver the first complete, open, and free mobile platform. (See box.)

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At-a-glance: Google Android and the Open Handset Alliance On November 5, 2007, Google announced the creation of the Open Handset Alliance (OHA) consisting of itself and 34 other companies to create an open-source handset Operating System and Java-based application programming environment. The other members include many of the key handset manufacturers and network providers. The idea is to create an open, non-proprietary environment for publishing application services on the mobile handset. Any application written on the platform will be available on all handsets that support the platform. If this platform becomes ubiquitous, the opportunities will greatly expand for publishing travel-based application services. However, at this point further analysis is required to understand these opportunities better. In particular, for the vision of international paperless and plastic-less travel to be realized, common processes will need to be widely agreed and deployed. IATA has already developed a standard that paves the way for global adoption of mobile phone check-in using 2D bar codes, but to take it further will only be possible if standards are available in areas such as e-forms for immigration and border controls. Industry standards will help mitigate both the risk and expense of developing solutions individually and furthermore provide a solid foundation for facilitating global implementation.

Theft and loss Theft and loss will be ever more disruptive as passengers become increasingly dependent on their mobile devices. Figures vary widely, but estimates indicate that up to half a million mobile phones may be left in airports worldwide every year. At London Heathrow Airport, according to mobile security company Pointsec, around 3,500 phones and up to 1,800 laptops are left in the airport annually, and while 60% are eventually reclaimed, the remainder are auctioned off after three months – with a quarter of these having no security on them16. The message is clear: airlines and airports will need to ensure there are back-up scenarios available to support affected passengers. When deployed properly, however, mobile technology can ensure higher levels of security than is available with most payment and verification methods today. A lost phone can be immediately ‘switched off’ by the operator, rendering it useless to anyone who picks it up, and credentials and services can be transferred directly to any new mobile device.

Passenger acceptance Usage will be the ultimate success criterion of mobile-based services, making the need to address passenger requirements the driving force for mobility innovation. In particular, airlines and airports will need to persuade passengers that the benefits of the services far outweigh any perceived or actual loss of privacy, if widespread adoption is to occur.

Conclusion Despite the challenges, mobility done right will give passengers the ability to proactively manage their travel experience while on the move rather than from a fixed location. It will also offer airports and airlines new opportunities to inform, empower, sell to, and serve their customers. However, mobile devices represent a disruptive technology making it difficult to plan with confidence. Even so, air transport stakeholders will need to confront this technological change if they are to address the next-generation travel needs of their customers.

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Notes and references

‘The 2007 Airline IT Trends Survey’

Source: Juniper Research white paper ‘Paying by Mobile - Mobile payments strategies and markets 2007-2011’ (July 2007), available at www.juniperresearch.com.

Source: ‘Aircraft Turnaround in the Auto-ID enabled environment’ report. Auto-ID Lab, Cambridge University, UK.

Source: Surveys carried out for SITA and OnAir during 2005 and 2006.

Source: Informa Telecoms & Media article, available at www.telecoms.com/itmgcontent/tcoms/news/articles/20017483752.html.

Source: Key Global Telecom Indicators for the World Telecommunication Service Sector, available at www.itu.int/ITUD/ict/statistics/at_glance/KeyTelecom99.html.

Source: Air Transport Association of America data, available at www.airlines.org/economics/specialtopics/ATC+Delay+Cost.htm.

Source: SITA Passenger Self-Service Survey 2007, available at www.sita.com/NR/rdonlyres/FB7A902D-6C61-4546831D-85214877CC23/0/2007PSSHighlightsFINAL.pdf.

10. Source: ‘The 2007 Airline IT Trends Survey’, published by Airline Business (www.airlinebusiness.com) and SITA (www.sita.aero). 11. Source: Juniper Research white paper ‘Paying by Mobile - Mobile payments strategies and markets 2007-2011’ (July 2007), available at www.juniperresearch.com. 12. Source: IATA forecasts passenger growth rates of over 5% from 2007-2011 and 2.75 billion passengers in 2011; see press release at http://iata.org/pressroom/pr/2007-24-10-01. 13. ‘Aircraft Turnaround in the Auto-ID enabled environment’ report. Auto-ID Lab, Cambridge University, UK. 14. SITA estimate. 15. Financial Times 23/08/2007 16. Survey conducted by Pointsec, in the summer of 2006 – see www.checkpoint.com /press/pointsec/2006/08-31.html.

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Notes

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Notes

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ÂŠ SITA 2009

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For further information, please contact SITA by telephone or e-mail: Africa +27 11 5177000 info.africa@sita.aero East & Central Europe +41 22 747 6000 info.east.central.europe@sita.aero Latin America & Caribbean +55 21 2111 5800 info.latin.america.and.caribbean@sita.aero Middle East & Turkey +961 1 657200 info.middle.east.turkey@sita.aero North America +1 770 850 4500 info.northamerica@sita.aero North Asia & Pacific +65 6545 3711 info.north.asiapacific@sita.aero North Europe +44 (0)20 8756 8000 info.northeurope@sita.aero South Asia & India +65 6545 3711 info.south.asia.india@sita.aero South Europe +39 06 965111 info.southeurope@sita.aero

ÂŠ SITA 09-THW-009-4. All trademarks acknowledged. Specifications subject to change without prior notice. This literature provides outline information only and (unless specifically agreed to the contrary by SITA in writing) is not part of any order or contract.