Mobile Technology Set to Transform Air Travel in the Next Five Years, According to Amadeus

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New report, ‘The always-connected traveller,’ identifies how mobile functionality is likely to be used by airlines in the coming years. Location-based services, integration with social media, mobile payments and ‘push notifications’ to become mainstream Although still in its infancy, the market for mobile ancillary purchases is set to quickly grow

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Mobile technology is set to transform both airline operations and the overall traveler experience, according to a new industry report published today by Amadeus, a leading travel technology partner and transaction processor for the global travel and tourism industry. ‘The always-connected traveller: How mobile will transform the future of air travel’ is a global report that identifies changing traveler attitudes to airline mobile services while also highlighting the specific, emerging mobile technologies that will revolutionize each stage of the travel experience in the future.

Developed by Norm Rose of Travel Tech Consulting Inc., the report includes an assessment of airline mobile capabilities today, the emerging mobile innovations that are likely to be launched over the next one or two years, and also the advanced functionality that is set to entirely change the traveler journey as we know it, over the next three to five years.

Designed to stimulate new thinking and drive innovation in the travel sector, the report draws on a range of qualitative interviews with airlines from across the globe, complemented by primary data gathered from a global study of 2,978 travelers conducted by JD Power on behalf of Amadeus.

Traveler demand for mobile services high
While mobile services are still emerging in the travel industry, it is apparent that travellers are clearly beginning to expect, demand and adopt them: 16 percent of travelers surveyed currently use smartphones to book trips. That figure rises to 18 percent among the 18-35 age group and to 33 percent among frequent travelers. In addition, 3.4 percent of all travelers use their mobiles today to check-in for their flight, with this figure rising to 7.4 percent in Asia.

Asian and North American carriers have greatest mobile functionality today
Following qualitative discussion with nine airlines from around the world, most carriers indicated that basic mobile functionality such as schedules, check-in and disruption management are currently part of their existing offer. However, Asian and North American carriers provide virtually all of the 12 mobile services classed as ‘basic functionality,’ while European and Latin American airlines prefer to focus on only a select core of services.

Emerging mobile capabilities: limited ancillary services expected in the next 12 months
While still in its infancy, the mobile device is also increasingly becoming a channel with which to book ancillary services: 1.4 percent of travelers had to date used their mobile to purchase ancillary services. However, despite ancillary services providing both increased incremental revenue opportunities and the ability for airlines to differentiate themselves from the competition, the majority of the airlines interviewed felt that the ability to sell ancillary services through the mobile channel was still over a year away. Only in North America did a carrier have the ability to sell ancillary services through mobiles today, and even then only extra baggage was available for purchase. Bucking the general trend, the Scandinavian and Middle East-based airlines outlined plans to aggressively increase their mobile ancillary offering within the next six months. Premium seating, the option to pre-purchase meals and club access are among those services due to be made available via mobiles in the coming months.

Advanced functionality: location-based services, payments and push notifications prioritized
It is evident that airlines are becoming increasingly aligned with consumer demands, as many plan to implement ‘push notifications’ in order to deliver real-time information updates relating to baggage or flight status. Six airlines are currently planning to actively implement this technology, which clearly shows an appreciation and understanding of changing traveler needs. Indeed, Amadeus’ recent survey with JD Powers found that close to 40% of today’s travelers would use real-time baggage and flight updates via their mobile, if they were available.

At the same time, all of the airlines surveyed are investigating the ability to enable mobile payments in the medium term, in order to be able to process payments for flights and ancillary services. There is a particular drive for this from emerging markets, where the ‘mobile wallet’ is seen as a secure, long-term replacement for cash. Location-based and social networking services are also highly prioritized, with one Latin American carrier seeking to integrate its services with the popular social network Foursquare in order to enable check-in from airport shops.

Julia Sattel, VP, Airline IT, Amadeus, said: “Mobile continues to shake up how companies interact with and meet the needs of customers. It provides travelers with a personal, always-connected device that offers unlimited potential to transform how people travel. The challenge for the industry is to deliver an intuitive and compelling mobile user experience and services that help travelers get the information they want and buy the things they need. However, instead of just transplanting what airlines do online to the mobile device, we encourage our customers to explore what can be done to exploit the unique characteristics of mobile."

Norm Rose, Travel Tech Consulting, Inc., and the report’s author, said: “According to iSuppli Corp, over 73 percent of the world’s population – which equates to five billion people – carry a mobile device of some form. And so essentially, airlines need to work out how to effectively monetize the mobile channel. Airlines across the world currently have an incredibly unique opportunity to use mobile technology; not only for product differentiation but also to allow incremental sales and encourage increased brand loyalty. But crucially, they must also keep pace with ever-changing passenger expectations.”

“The always-connected traveller” report will be launched at the 18th annual Amadeus Airline e-Commerce Conference in Cannes, France, from June 15-17, 2011. The theme of the event is adaptive commerce, with over 290 delegates attending including more than 70 airlines worldwide. The discussion will center around how organizations are able to best anticipate and respond to evolving business, user and technology practices in the world of digital commerce.

To download a copy of the report, please visit: http://www.amadeus.com/alwaysconnectedtraveller

Notes to the editors
Amadeus is a leading transaction processor and provider of advanced technology solutions for the global travel and tourism industry.

Customer groups include travel providers (e.g airlines, hotels, rail, ferries, etc.), travel sellers (travel agencies and websites), and travel buyers (corporations and individual travellers).

The group operates a transaction-based business model and processed 850 million billable travel transactions in 2010.

Amadeus has central sites in Madrid (corporate headquarters and marketing), Nice (development) and Erding (Operations – data processing centre) and regional offices in Miami, Buenos Aires, Bangkok and Dubai. At a market level, Amadeus maintains customer operations through 73 local Amadeus Commercial Organisations covering 195 countries.

Amadeus is listed on the Madrid, Barcelona, Bilbao and Valencia stock exchanges and trades under the symbol “AMS.MC”. For the year ended 31 December 2010, the company reported revenues of EUR 2,683 million and EBITDA of EUR 1,015 million. The Amadeus group employs over 10,130 employees worldwide, with 123 nationalities represented at the central offices.

To find out more about Amadeus please go to http://www.amadeus.com.

To visit the Amadeus Investor Relations centre please go to http://www.investors.amadeus.com

Media inquiries only:

Debbie Iannaci            
Director, Public Relations        
Amadeus North America        
Tel: 305-499-6448            
Email: diannaci(at)amadeus(dot)com

Christian Munson
CRT/tanaka for Amadeus North America
Tel: 804-675-8151
Email: cmunson(at)crt-tanaka(dot)com

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Christian Munson
CRT/tanaka for Amadeus North America
(804) 675-8151
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Debbie Iannaci