By Nicolas Parasie
DUBAI -- At the headquarters of Emirates Airline, techies have
taken over an entire floor. A sign hanging on the wall captures
their ambition -- and challenge.
It shows an airplane with Google written on its side, a fanciful
reminder of the company the airline considers one of its biggest
future competitors, not in the air but in cyberspace.
Emirates is the world's largest airline by international
traffic. But it worries that nimble tech giants like Google that
hold massive amounts of customer data could start using all that
information to get into the business of selling trips.
The nightmare scenario for Emirates is that it could be reduced
to a mere inventory provider of flights to companies with the
technological understanding to develop and offer high-margin
products to its customers -- privatized services like ground
transportation, entertainment, restaurant bookings and hotel
stays.
Instead, Emirates wants to provide those services itself. To do
that, it is building a proprietary information-technology system
that will rely on mountains of data and artificial intelligence to
anticipate each of its customers' travel needs before, during and
after their flights -- and have the technological power to fulfill
those needs.
The goal is for passengers to be able to make arrangements not
only for their flights but also for their entire trips on the
airline's website, and for them to be offered various activities
and entertainment based on their established personal preferences.
In addition, AI will be used to expand on those services by
predicting what passengers might be interested in based on factors
such as age and gender.
This digital revamp is being driven by Christoph Mueller, chief
digital and innovation officer of Emirates Group, the airline's
parent.
"The transportation wallet of a given individual might be a $500
budget per year, whereas the travel wallet including the hotels and
other transportation is $5,000," Mr. Mueller says. "But the
lifestyle wallet is $10,000. Lifestyle is basically driving the
whole thing: tickets for rock concerts, soccer, sailing courses,
going skiing, going to a spa."
Mr. Mueller, who turned around Ireland's Aer Lingus and helped
Malaysia Airlines recover after the disappearance of one plane and
the shooting down of another in 2014, joined Emirates in 2016. He
spoke with The Wall Street Journal about his plans; edited excerpts
follow.
'We are disrupted'
WSJ: Why is there a need for a digital revamp at Emirates?
MR. MUELLER: In the past, you would simply ask the question:
Where is my competitive advantage? Who is attacking me with
conventional weaponry? The new thing is that we are disrupted.
These are social-media companies, these are the search
companies, these are the retail companies, basically everybody is
trying to get into the travel space, and that of course would
degrade us to a pure transportation company, and that is what we
are not willing to accept.
WSJ: What does the revamp entail?
MR. MUELLER: We have rewritten our business model. The
supporting technology has not been invented yet. So we had no
choice but to start to build it now and with our partners in a
bespoke platform for the Emirates Group. What other airlines do --
a new app here, a new app there -- won't change the game. We want
to change the game.
WSJ: What is Emirates trying to accomplish here?
MR. MUELLER: It's really the personalization of travel. The best
example of personalization, you carry in your pocket. You buy a
cold piece of metal in the store and one hour later there's no
other iPhone like yours: the combination of music, pictures, the
combination of apps, it is basically your digital fingerprint, it's
almost a carbon copy of your brain. And that's how we believe
people will want to travel.
WSJ: As an airline traveler, how would I benefit from the
digital revamp?
MR. MUELLER: Let's say you watched the first two episodes of
"House of Cards" at home before your flight. [By linking your
Netflix account to your Emirates account,] we could upload No. 3
and 4 for your convenience.
Or you come on board and get into your seat and you could think
about flight attendants approaching you and saying: "I just saw you
had that New Zealand Sauvignon Blanc in the lounge. Would you like
to continue with that white wine or would you like to try out
something else?" It's seamless customer experience.
In-flight entertainment might start in the pickup limousine,
from your home address, where you start watching a movie, you
continue watching that movie in the lounge, you finish that movie
in the aircraft.
WSJ: You talk about a professional wanting to work on his
outbound flight but perhaps sleep on his return. How does that fit
into the company's digitization effort?
MR. MUELLER: There is an infinite choice of combinations of
transportation class -- first, business, economy, food and
in-flight entertainment, lounge access, ground transportation,
fast-track security, etc. The endgame is really that you can
personally combine that on our website exactly the way you
anticipate your travel is going to happen. One sector of your trip
economy, one sector business, with limousine service on one end and
Uber service on the other end. That is basically what we believe
customers want.
Privacy issue
WSJ: How would you collect this type of personal data from your
passengers?
MR. MUELLER: Every data point that would enable us to learn your
preferences better will be voluntarily given by you. So if you
enter in your profile that you're a fan of U2 or the Rolling
Stones, then we will be able to curate an individualized offer and
send it to you if you want and draw your attention to the fact you
can combine a business trip to New York with visiting one of those
concerts.
WSJ: So will Emirates not be fundamentally an airline after this
digital transformation?
MR. MUELLER: Emirates Airline alone has an asset value of more
than $100 billion today. The airline won't be a sideshow, ever. But
we need to support the transportation proposition with the travel
and lifestyle proposition end-to-end.
The user experience let's say for in-flight entertainment will
be benchmarked against capabilities of modern tablets and streaming
services, not so much against the in-flight entertainment
capabilities of other airlines. Our payment solutions will be
compared to the everyday online shopping experience during iPay,
you pay with your thumb, you pay with your face, you pay with all
other kind of biometric things. Our business will be benchmarked
against the day-to-day experience that particularly our young
customers have in their life every day.
WSJ: How does the new strategy tally with what your owner, the
Dubai government, is doing to attract visitors?
MR. MUELLER: If you board the plane in Seattle with your
electronic boarding pass, it should pay in every restaurant and
water park in Dubai. That's what we are working on. Can you imagine
that your boarding pass opens your hotel room? You don't have to
check in; once you booked the hotel in conjunction with the flight
you just simply go to the fourth floor and open room 31. I believe
Emirates will just be the key to unlock the experience of the
U.A.E.
WSJ: How do other Emirates managers view your plans?
MR. MUELLER: We developed a digital induction program for our
entire management team, because the big elephant in the room is
still that the vast majority of managers believe that they have to
become tech-savvy in the digital age. That's totally wrong.
The true challenge for management in the digital age is to let
go, to delegate decision power to lower levels, to allow
cross-collaboration to happen and to resist the temptation to
micromanage -- to keep their hands off and their eyes on. We will
expose our management to successful and not so successful
enterprises on the digital journey so that they can learn the do's
and don'ts firsthand.
Mr. Parasie is a Wall Street Journal reporter in Dubai. He can
be reached at nicolas.parasie@wsj.com.
(END) Dow Jones Newswires
May 20, 2018 22:23 ET (02:23 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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