Airlines Build Out Mobile Apps, Wait For Consumers

Airlines have been gearing for mobile commerce in a big way and now are awaiting more smartphone activity by consumers.

Three out of four airlines now have mobile boarding pass and check-in capabilities, features expected to be in 90% of airlines’ mobile apps within three years, according to the latest gauge.

Despite the wide availability of such services, most travelers still aren’t using them.

In the last year, check-in by mobile app accounted for 12% of passengers, which was up from 9% a year earlier, according to a study by SITA, the airline industry organization.

The annual airline tracking study is based on a survey of executives at the top 200 passenger air carriers conducted by SITA and Airline Business. The survey represents the views and insights of more than half of the top 100 airlines.

The reality is that in many cases the mobile platforms have to be put in place and well established before masses of mobile consumers flock to them.

This has been one of the main stumbling blocks for mobile payments: they aren’t available everywhere. This means they have no strong chance of becoming part of a new consumer behavior.

Airlines find themselves in a similar situation. If consumers can’t use their smartphones for air travel activities they regularly perform, no matter the airline, it can be tough to get them to trust mobile apps for all air travel actions.

The good news is that airlines are marching along, building the mobile platforms pretty much across the board so that all ends of travel can run through smartphones.

For mobile check-in, airlines expect almost a third (31%) will be doing it within three years. Not a majority, but more than double what it is today.

There’s also a gap in mobile bookings by app.

About two-thirds of airlines offer flight bookings via app, with another 18% with plans to offer it.

However, the sales of flights through mobile apps is low, with airlines globally seeing about 4% of their total revenue coming that way. That number is expected to triple to about 12% within the next three years

In the silver-lining department, airlines are finding that mobile app ancillary revenue, such as from lounge access fees, Wi-Fi and seating, is projected to go from 4% of ancillary revenue to 14%. As a result, airlines are adding more non-airline services to their apps, such as car rental and travel insurance, with expectations of driving the number of airlines doing that from 45% to 80%.

It’s not only airline commerce involved in mobile apps here.

Customer support features and notification services are being added to apps to enhance the value and more quickly interact with travelers.

We’ve had flight status updates via app for quite a while, but airlines are adding more time-to-gate notification capabilities, expected to be in 70% of airlines within three years.

It’s not only travelers that airlines are getting better at tracking and serving based on location.

Lost baggage. I’m sure many of you can relate.

The majority (60%) of airlines are planning to launch baggage-related features to their smartphone apps over the next three years. These include baggage location updates, missing bag communication and lost bag reporting.  Here’s what airlines have planned or already implemented around mobile by 2019:

  • 72% -- Missing baggage communication
  • 71% -- Real-time baggage status information for passengers
  • 70% -- Location-based notifications
  • 66% -- Baggage location status updates

You may not get your luggage any earlier, but at least you may know where it is.

Some of these are major changes from today. For example, only 12% of airlines today have missing baggage communication as part of their mobile phone services but most (72%) plan to have it within three years.

Interestingly, almost half (47%) of airlines expect to implement smartwatch check-in and boarding, even if most consumers don’t have a smartwatch, another case of airlines at least building the platform ahead of consumer adoption.

When they get in the air, passengers also will find more connected services. While a third (33%) of airlines today offer Internet connectivity, most (74%) will by 2019. Here’s what airlines plan to offer within three years:

  • 74% -- Internet
  • 70% -- Multimedia file streaming
  • 61% -- Internet with airline supplied device
  • 58% -- Mobile phone capability
  • 57% -- Multimedia file streaming with airline supplied device

Flyers may be using their smartphones here and there during their travel experience. Meanwhile, airlines are moving to making that device indispensable for any trip.




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