Ask Skift: How Are Airlines Using AI?

23.08.2024 - 21:12 / skift.com / Rashaad Jorden / Ask Skift

A growing number of travel brands — including some in the airline industry — are looking at ways they can get the most out of artificial intelligence. Five aviation executives recently told Skift about what AI is doing — and can do — for their businesses.

So how is AI impacting airlines?

We posed the question to our artificial intelligence chatbot Ask Skift, which used information appearing in our past news coverage and research. We also did additional reporting on the subject.

AI is significantly impacting the airline industry in several critical areas, leading to transformative changes in operations and revenue management. Key impacts include:

Revenue Management and Pricing Models: AI and machine learning (ML) are being implemented to enhance revenue management processes. This includes better demand forecasting, advanced pricing models, and improved customer segmentation. By leveraging AI, airlines can optimize inventory and personalize customer offers, which is expected to open billion-dollar opportunities.

Ancillary Revenues: AI is also driving an increase in ancillary revenues — additional revenues from services like baggage fees, seat selection, and in-flight purchases. This focus on ancillary revenues represents a multi-billion-dollar opportunity for airlines to enhance their overall profitability.

Customer Experience: According to a survey, 61% of airline industry decision-makers believe that AI will have the most significant impact on delivering personalized customer offers and experiences. This personalization is key to improving customer satisfaction and loyalty.

Operational Efficiency: AI helps airlines manage pricing, demand, and logistics more effectively, especially in today’s volatile environment. AI solutions enable airlines to leverage data for better business planning and more accurate forecasts, reducing the risk of disruptions and enhancing operational efficiency.

Total Revenue Optimization: About 23% of industry decision-makers see AI’s most significant impact in total revenue optimization, which includes fare, ancillary, and third-party pricing decisions. This holistic approach ensures that airlines can maximize their revenues across all streams.

Overall, the adoption of AI and technology is expected to revolutionize the airline industry, providing immense benefits to both airlines and passengers.

Go deeper into the business of travel with Skift’s new AI chatbot.

Combatting waste: Airlines are looking at AI as a vehicle to help reduce waste, especially since taking fewer items onboard across thousands of flights can save a large amount of money and benefit sustainability campaigns.

KLM is one carrier bullish on AI as a tool to cut down on waste.

“We already have a team