How AI is Influencing the Airline Industry

How AI is influencing the Airline Industry

Today, the modern consumer is constantly shifting across buying channels, and businesses that adapt to this can minimise the impact of disruption of their passengers experience across all touchpoints of their journey and drive brand loyalty.

Artificial Intelligence (AI) is playing an increasingly important role in the airline industry. The global AI in the aviation market is expected to increase in value from $152.4 million in 2018 to an expected $2,222.5 million by 2025. This upward trend is likely to continue and thrive as the industry evolves to remain competitive and profitable.

Airlines need to reinforce their people, processes, and technologies. By building AI solutions into processes across organisations, airlines can leverage their data, analysis, and revenue management capabilities to take advantage of new business opportunities in an increasingly sustainable environment.

AI is a key cornerstone of many of today’s retail customer retention strategies, by allowing airlines to interact with their customers and nurture the relationship organically and in a personalised way, that is key to building strong customer loyalty and promote retention.

From providing a seamless omnichannel experience to better personalisation, AI opens new possibilities for the airline industry. By tapping into the power of data far faster and more efficiently than humans ever could, AI can help airlines to become more efficient, cost-effective, and competitive.

In this article, we identify the ways how AI can be of influence on the airline industry.

1) Predictive Analysis Keeps Stock Levels Relevant

AI can provide personalised service to customers by implementing predictive analytics and insights that can help airlines identify potential opportunities and make decisions more quickly and accurately.

To recap, predictive analysis describes the use of statistics and modelling to determine future performance and demand requirements based on current and historical data.

It’s impossible for humans to manually process all the information airlines are collecting from digital sources. Predictive analysis looks at patterns of data to determine if those patterns are likely to emerge again, which allows decision makers to adjust where they use their resources for every flight.

For instance, it allows warehouse management teams to know the right quantities of product to pack onto bar-sets to reduce stock waste. Teams can use these powerful insights driven by AI to accurately predict sales, in particular, the understanding of the demographic of customers and destination for every flight is of key influence to determine what is delivered onboard as there’s an increasing likelihood of sales.

Conversion rates can be driven from sub 15% to over 80% of bar-sets instantly.

2) Price Optimisation

One of the primary differentiators for consumers when considering different brands with similar products or fill similar needs for the individual is price.

Price should be a key consideration to ensure suitable profitability for the organisation – while providing clear and competitive value.

After scanning vast amounts of data and analysing different pricing scenarios, AI tools can generate pricing suggestions. Usually from past transactions, pricing of competitors, contextual data, to conduct a win/loss analysis.

The findings can help airlines gauge the sensitivity of passengers to price points  for any given product. It is a solution that can help airlines predict the price optimisation strategy that is most likely to generate sales and deliver margin whilst monitoring market trends and customer preferences.

3) Revenue Optimisation

AI generates accurate forecasting that can be leveraged to make better informed decisions, and directly impact the bottom line both from a revenue and cost perspective. It’s based on the premise that customers perceive product value differently, so the pricing and product mix offering  need to be matched to the profile of passenger target groups and their flight times.

4) Cost Savings

By leveraging AI-driven automation, airlines can reduce operational costs and increase operational efficiency, as a result, increasing profitability and market competitiveness.

For example, airlines can automate their inventory management, pricing, and revenue management processes to optimise their operations. Using AI algorithms, they can analyse historical data and current market trends to form real-time pricing, product and crewing decisions, thus reducing the complexity of manual labour and human error.

5) Personalised Recommendations Generate Unique and Personalised Experiences

Manually running through each user’s history is too labour-intensive. AI can help you discover exactly what your customers like quickly and easily by identifying patterns in purchasing behaviour and trends. Based on these patterns, airlines can tailor what’s available and product suggestions at scale.

AI automation has helped many retailers already and can help airlines to understand their passengers better and predict future behaviour. By analysing customer behaviour, airlines can ascertain their requirements, likes and dislikes. Accordingly, airlines can offer products and exclusive discounts based on preferences that customers will admire and improve their experience when interacting with the airline.

6) Less Weight, Less Waste, Less Fuel Consumption

There’s a missed opportunity for airlines to use AI-driven insights to minimise the supply of product while making the customers experience still feel more personal.

Previously, we spoke with technology expert Raza Barkatali, demonstrating his key point “don’t fly what you don’t sell”, with many current carriers frustrated by barely achieving 15% conversion rates conforming to a traditional retail format and sales strategies. Available here.

“The planet is obviously prime for all of us, and with the challenges the aviation industry faces on environmental protection it is a case of understanding what can be done to reduce the fuel usage whilst recognising the huge part the aviation industry plays in creating a better future for the planet.” – Raza Barkatali

To attain real value out of AI, airlines need access to high quality data to inform strategic decision-making. With this, airlines can deploy solutions through dynamic bar-sets, freeing the crew from administering unwanted product, allowing greater time to deliver a tailored passenger experience, all while not burning fuel on unsold products, but instead creating profitable, and sustainable aviation.


It’s a given that AI can revolutionise the airline industry. By automating routine tasks, making better decisions, and improving customer experience. When customers feel like their needs are met and their voices are heard, their allegiance and retention is assured.

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