Tag: Airlines

Setting the Tone for Growth

Read Time: 13 minutes

The team at Nolinor

How giving up control will allow your company to grow

Nolinor is a Quebec-based charter airline that started operations in 1997, providing air transport services to hunting and fishing outfitters, eventually receiving permission to also provide its own aircraft maintenance. In 2004, the Prud’Homme family trust became majority shareholder and the company has been expanding rapidly since, first growing its fleet of Convair 580 aircraft and more recently acquiring a fleet of B737 aircraft. Then in 2005 came an opportunity to move operations from Montréal–Dorval International Airport to larger facilities at Montréal–Mirabel International Airport north of the city, which proved to be a milestone for the company’s growth. Shortly after, in 2006, the company was named one of the best-run enterprises in the province of Quebec by the National Bank of Canada. More recently, the company purchased a hangar at Aeroport Montréal Saint-Hubert/Longueuil and is the official carrier for the Montreal Alouettes football team. My interview is with Marco Prud’homme, Vice-President and shareholder of Nolinor.

Q:  You have a big story to tell, for a relatively young company. What’s next for you?

The vision that we had for the company has remained the same. We are listening to the customers’ needs, so we don’t have a long planning process or vision or strategy that we would need to change each year anyway. The way we envision growing the business is by listening to our customers’ needs and the need in the market and trying to address these. In that way we won’t have any aircraft stuck on the ground for long periods of time. So far, this has been pretty much the key to our success. We’re not romantics in the aviation field. We’re not here to prove a point. We’re not here to have a statue at the airport. We’re just here to listen to the customer and make sure that we find a solution that matches their needs, at a price point that is fair.

It took a few years to figure out exactly what we were doing. I mean, we were working really hard and doing a bunch of stuff, and at one point in time we had to sit down and ask, “Okay, the team is growing; why are we having success while other people are failing? What’s the difference?” We had to think about it and try to figure out exactly what was the key thing that we were doing differently from other people.

“We’re not romantics in the aviation field. We’re not here to prove a point.
We’re just here to listen to the customer and make sure that we find a solution that matches their needs,
at a price point that is fair”

Q:  So, I guess what you’re saying is, being self-aware is a key element of success for a management team.

Yes. Even if you work seven days a week, at one point you have to sit down and think a bit, try to understand what works, what’s not working, and so on. It’s not only for the management, but for anybody at a company. When we started at Nolinor, there were about 25 employees. We’re now over 275 and for sure, we cannot take everyone by the hand and explain to them in detail what they must do every day. You must put in place a culture – a way of doing things, or a way of dealing with issues. This gives leverage and empowers employees so that they can solve problems. Yes, sometimes people make mistakes, and other times they overachieve in what they set out to do. But, as long as the average is positive, people will learn from their mistakes and the company will grow.

Q:  This acceptance of failure is really part of setting yourself up for success, isn’t it? Would you say that acceptance of this at the management or leadership level is quite important?

I think it’s a game-changer in the sense that, if you’re trying to micromanage everybody inside the company, your growth will get stuck. There are only so many hours in a day and hours you can track, and there’s just no way you can micromanage everyone and everything. For many years, in an earlier business venture my family was involved in before Nolinor, we had placed a lot of importance on controlling every single decision in the company. We arrived at Nolinor with this mentality, but we soon discovered that this approach would not work. We needed a new approach – one that would give us more free time to think about how we can grow the business and acquire new customers, enter new markets, and initiate new projects. You cannot micromanage every single employee, otherwise you’re paying people for nothing.

Q:  Did this realization come from experience, or was it from talking with other businesspeople who had tried different approaches?

To be honest, it came from an issue. I left the company in 2008 for a few years, at a time when the company was stuck. My father [Nolinor President Jacques Prud’homme] could not keep up with being involved in every single decision, so he had to hire more people and he had to trust them – he found out on his own what I was trying to tell him for a long time. When I came back in 2013, I came to a completely different company. There was no intention on my part or his to go back to how we used to do things, between 1999 and 2007. I guess sometimes you learn from good experiences; sometimes you learn from bad experiences. For us, this situation created more potential for growth.

Q:  What you are describing is really a change in management style, in leadership style, that I’m seeing in younger companies that are growing very rapidly. We call that style agile, for lack of a better term, but it’s completely contrary to the traditional management approach that you’re taught in business school – the command-and-control type of approach to management that’s been instilled in society since the industrial age. I think it’s very relevant in this day of more complexity and rapid change. Would you say you’re riding the wave of that new trend in management?

I’m not sure we’re riding any trends. I guess what we’re doing right now is part of our personal business culture that we grew. My father started in aviation on his own – he was only 21 at the time. He didn’t have any formal management experience; his background of knowledge was that of a bush pilot. So, every single dollar he earned was through trial and error. Those things take time and I learned a lot from him. But I have a more academic background and so we did clash when we were trying to push new ideas.

Right now, we’ve been able to find a rhythm under which I would say that neither of those two extremes are better. Even when you manage in a very academic way, it doesn’t work. It has to be a mix of both, and it has to be a mix of trusting people who have the competency to actually deliver and keep following those people who need more guidance and who you need to grow. And, it all comes back to trying new things, and I guess my father was not always open to that. Two years ago, we hired a consulting firm to give us a hand in one area of the company. That required a very different mindset, because we used to close the door to any outside help. That was the first try, and we hit a home run on the first try. When you have those small successes, it changes your view of how you see things, and you’re more open to new experiences.

Q:  How would you describe the culture of Nolinor? Obviously, you and your father have developed a certain approach – how has that further permeated throughout the organization? How do employees embrace your central philosophy?

It’s not easy. I would say that there’s not a day that is the same. There’s no big plan for how we’re going to achieve our objectives. Once a situation comes up, before we react or do something crazy, we try to figure out exactly how we should do it and what would be the best course to take, and how can we create synergy with other stuff that we’ve put in place. It’s very hard and very much case by case.

There’s no clear-cut way of doing it, but I guess with an open mind, and the reality of it is that there are so many hours in a day. You don’t really have a choice but to test your folks with new challenges and then just trust them to deliver, and touch base with them from time to time to see what they’ve done and what works and what doesn’t work.

Q:  So, do you have teams within Nolinor that are formed spontaneously to deal with certain issues as they come up? Are they self-organizing, or how would you characterize the approach?

Because we’re in the aviation business we have this structure that we must follow, to meet Transport Canada regulations and all that. But that covers only the operation. It doesn’t cover managing change. It doesn’t cover managing growth. It doesn’t cover managing R&D. It’s a very specific task-oriented structure, so flights can leave on time, and that everything works properly and safely. But that’s only half the game.

The other aspect is trying to improve and grow the company, so for this there’s no real structure. It’s more like when there’s some new topic, or new project on the table, we have a look at who can deliver on that, and we trust that person to first get all the information she or he can gather on the subject. Then they give us their feedback, and we come up with a solution. We empower them to move forward, and we do the follow-up after that. It’s all a question of who’s best to do the job, not just who’s in the structure, who’s supposed to do it. So it’s very different. So the structure is there for regulatory purposes, but for anything else we try to figure out who’s the best person on the team to do it.

We used to have a lot of meetings. We don’t do that anymore, since these were not giving any results. We now have a structure where everybody works in different cells, and those cells are not really structured. They’re very flexible in the way they organize work. Most of the time we don’t have any timetable either, since every time you fix a deadline, there’s a surprise. When you have a very linear approach, something can happen that will throw you off. The way we look at it is that we know we are going to reach our goal. The date we’re going to reach it is not very important. It just puts extra stress on everybody, and it’s not a good way of going about it. We’re more into flow. Case in point, we started a project about a year ago and it started one way. However, during the process we found other opportunities, and we took a different approach that ultimately gave us results.

We therefore also never announce anything in advance. We announce only what we are able to close, what we are able to realize, and in that way, we only celebrate success. When we look at our competitors, they are eager to share what they’re working on. That’s not the way we work. We give a lot of information on what we accomplish, and don’t share much on what we’re working on.

Q:  So, you’re quite opportunistic in your approach, scanning for opportunities and then gauge whether you can make a difference?

I would say that for an important project to get closed, and delivered, there might be between 10 to 20 other projects that we’ll just cancel along the way. Opportunities come and go, and you have to make the right call at the right time. Sometimes timing is everything.

I’ll give you a past example, which is quite funny in retrospect. We were considering equipping our aircraft with iPads so that people could view movies. At one point in time, having an iPad was something rare, and when they came out we looked at that possibility. Today, it’s a no brainer that this project would have failed. Everybody has an iPad or a smartphone device on which to watch a movie. So, sometimes it’s like, we look at a project that seems interesting, but at some point, upon closer inspection and reflection somebody will raise their hand and say, “Well, there might be an easier way,” or “Do we really need to do that? What’s the ROI on that?” and “Why are we doing this? Did we fall in love with this idea, or do our customers really need that?”

We’ve put in place a system that encourages every passenger to give us feedback on the flight they’ve taken. It’s a very simple process, and we’re able to gather a bunch of information that we didn’t have before. And, with this information we can go back to our customer and say, “Oh, by the way, your passengers on this particular charter flight do not appreciate this feature, or the departure time,” or so on. We’re able to give that feedback to the customer so that a contract that may have started out in a certain way, will end up being improved with an easy solution that works, I would say, 80% of the time. And, we get this information for almost nothing – from our passengers.

It’s all a question of giving the tools to the right people, trusting them to find the right path, and not being romantic about your own ideas. This also means that if the president or I have a concept, or an idea, and once we put it on the table it’s very important to understand that we don’t own that idea anymore. If somebody comes and destroys it, or changes it, or modifies it, or finds something better, it’s very important that you don’t take it personally, because once it’s out in the open – inside the company – it’s for everyone to improve it and ownership no longer rests with any specific person. That gives a lot more leverage for people to take risks, I think.

“It’s all a question of giving the tools to the right people, trusting them to find the right path,
and not being romantic about your own ideas. This also means that [if you have an idea] and once [you]
put it on the table, it’s very important to understand that [you] don’t own that idea anymore”

Q:  So, would you say that it’s a completely open, and transparent work environment you have created that encourages creativity and ideas?

Yeah, but it’s not always easy since the natural reflex is to intervene and decide. However, if you’re able to take the time, and I guess, sleep over it, and then come back the following morning, you’ll have a more clear view on it. Everybody has the same goal – we all want Nolinor to thrive and be a success. How to achieve that can be viewed differently by other people. So, you must sit back and relax, and say, “Well, that’s completely different from what we had in mind, but it’s not a bad idea, and it’s actually cheaper, and it’s actually better,” and so on. Because if every time you cut someone off or find a way to just destroy what they’ve worked on, nobody will want to jump in and do something new. You have to give people the right feedback, so they can thrive.

Q:  It’s counter intuitive, isn’t it? Give up control to gain more control in terms of where you are going as a company.

Yeah, and this is true not only in the aviation field, but in many other fields. Sometimes you meet people, and they micromanage their team so much that you kind of wonder why they’re paying their employees a significant salary when, at the end of the day, they don’t allow them to make any decisions. If your management team or your team leaders can’t make any decisions, then you don’t really have a need for them. Their job then becomes more about managing email.

For myself, I try to send as little email as possible. I prefer to have a one-on-one chat with someone and help solve an issue quickly. I guess, if you’re sending an email for someone to confirm or share information, that’s okay. But if you’re sending an email to solve a problem, then you’re only creating a bigger problem. You need to talk with people. People do not send me any long emails. I don’t read them. I have given that scope to everybody, that if they send me an email after 9 o’clock, or if they send me an email that is more than a couple of lines long, I won’t read it. So, they don’t waste time writing long emails. If they have something to say, the door is always open, and they can just sit down, and we can talk about it, solve the issue, and move on. Because, otherwise you’re just managing email. The purpose of email was never to take up 100% of your waking hours while at work. It’s a tool, not a job.

Q:  As Nolinor grows, how do you avoid what has been called the bureaucracy trap, in that procedures are created, and systems, and so forth, to keep everyone kind of moving in a certain direction?

Well the one thing that has happened over the last few years is that we have someone inside the company who had the great idea to create an information system under which almost the entire the operation is now managed. We share all information, i.e. schedules, travel, employee profiles, flight schedules, airport information – everything is within that system that was built in-house. We have two people working full-time on upgrading the system with new features. It has cost a lot of money so far, but it has saved way more, and has made it possible for us to reduce the amount of paperwork, and bureaucracy inside Nolinor by a factor of maybe five. The system has taken a lot of time to build and now we just keep improving it. Our mindset is now more into connecting with our customer. This system is now part of our customer service, and our customer receives real-time information about their flight. That’s something that’s not been done before by any other carrier that we know of. I’m not talking about only basic information – I mean very important information. We share a lot of information with our customers. We have created a need for them and it’s automated, so we don’t have somebody sending emails to customers like we used to do in the old days.

Q:  Then, the trends that we’re seeing – more and more digitalization, automation, the use of AI – are you staying in tune with this?

We try to. If you have some spare time, you must go outside your business and see what new opportunities exist and learn about new ways of doing things. I purposely don’t attend any of our industry trade shows. I’m always into stuff that is not related to aviation, because that’s the only way to find other opportunities or ways of doing things that are not present in our own industry. You can’t just simply copy what everybody else is doing; you need to do things that nobody is doing.

Many of our management travels the world, attending different events, getting training, or learning new skills and tools. Sometimes you look at the budget and say, “Ooh, why are we spending so much money on that?” It’s not like we expect an employee to come back with a great idea every time we send them somewhere. But maybe they’ll meet someone and that someone might call him six months after with an opportunity, and so it’s very hard to figure out the ROI on that. Every time we have something that works really well, and we go back down the line to track down its origin, it comes back to somebody who was in touch and learned about something new.

We also share a lot of books. I like reading a lot, every time I read a good book – it could be on management, or marketing, or something completely different – I tend to share it and encourage others to read and share it with somebody else.

Q:  You are creating a learning environment and connecting on the edge, if you will, which is where innovation really happens. It doesn’t happen in your own little world. It happens on the exterior of your world.

That’s right, so you have to be open to that. You have to have an interest in learning and trying new stuff. I’m not interested in being aware of the new type of oil that’s going to go inside an aircraft. For me, that has zero value. It really comes down to how we manage things, how we grow customers, how we get more visibility on the Internet, how we treat people, how we train and grow our people. Those are the issues that, for me, are more complex and more interesting than what is going to be the next type of aircraft we’re going to buy. Because basically, we’re not buying aircraft to fulfil our own personal dream. We’re buying aircraft to be able to provide a service our customers want and need.

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Cost-cut Yourself to Prosperity

Read Time: 2 minutes

Cost reduction as a strategy for rapid growth

During my career, I have saved millions of dollars for the organisations I’ve worked for and helped avoid billions of dollars for the industry I’ve represented. Cost reduction and cost containment is the name of the game in the air transport industry. Over the course of the last 60 years, the airlines have not been able to make an adequate return on the cost of capital employed, with profit margins being less than 1% on average over the period. Net profit margins of close to 5% in recent years are truly exceptional, and are the result of strong demand, improved efficiency and reduced interest payments. But operating margins are being squeezed again by rising fuel, labor and infrastructure expenses, and thus cost management will continue to play a crucial strategic role. And herein lies a useful lesson for any industry and any business.

Last week I spoke of price simplification, whereby you dramatically reduce the price of the product or service by making its delivery simpler, thereby reducing its cost. This can be achieved in one of two ways, through both product redesign and business process redesign. Through product redesign you can reduce the product or service offering to its bare essentials and nothing else. Think of Southwest Airlines, and other low-cost carriers that offer no complimentary food or drink, no reserved seating, no lounges, and no free baggage handling. You can also reduce the variety on offer, as in the case of an airline reducing multiple class travel to a single class, as the low-cost airlines have done. For a product, think of the simple Swatch that provides the basic function of telling time, but not much else that more complicated and luxurious watches do.

Once the product has been simplified, its cost of delivery can be further reduced through business process redesign, for a simple and standardized product can be produced more easily and efficiently through automation and mass production. In the process, an entirely new mass market can be created through an accelerator effect that can cut the price of the product or service by half or more. The classic example is that of the Ford Model T, which was designed in such a way that it could be easily mass produced on the production line. It became the affordable car for the masses. The most successful low-cost airlines have simplified and standardized their product and redesigned their business processes to such an extent that traditional carriers have had a hard time to compete.

During my days with KLM Royal Dutch Airlines, while in the midst of yet another cost reduction initiative, I was told by those who questioned such draconian practice, “you cannot cost-cut yourself to prosperity.” At the time, I felt there was some truth in that. Today, I couldn’t disagree more! A sure way to prosperity and profitable growth is to cut costs – dramatically – for it has been proven that radical price reduction will lead to an exponential growth in demand and the creation of a new market.

The Difference between the “Complicated” and the “Complex”

Read Time: 3 minutes

And its implications for your approach to introducing change

What’s the difference between sending a rocket into space and getting children to succeed in school? What’s the difference between a surgeon extracting a brain tumour and judge and jury deciding guilt or innocence for a person accused of murder? Answers: sending a rocket into space and surgeons extracting brain tumours are complicated tasks, while getting children to succeed in school and the criminal justice system to function properly are complex activities.

Complicated activities like rocket launchings and brain surgery require engineer-designed blueprints, step-by-step algorithms and procedures, well-trained staff, computer software and special equipment. A complicated system assumes expert and rational leaders, top-down planning, smooth implementation of policies and procedures, and a clock-like organisation of tasks to be performed.

Complicated systems operate in standardised ways and everything is done to improve performance and reduce uncertainty and mistakes. The emphasis is on process and procedure, command and control. This is much like what happens in the cockpit when flying an airplane. Yet, even those sophisticated systems fail from time to time when an anomaly enters the picture, such as smoke in the cockpit that led to the fatal crash of Swissair 111 off the coast of Nova Scotia in 1998.

Complex systems like education and criminal justice, however, involve interactions between numerous players of varied expertise, independence and inter-dependence. They are rather unpredictable and uncontrollable, and can produce surprises, primarily due to the participation of and interaction between people.

Complex systems are constantly evolving and adaptive. Blueprints, technical experts, strategic plans and managers simply are inadequate to get complex systems to operate effectively. Think of the interface between front-line airline staff and their customers – the passenger. Often when dealing with complex situations such as flight delays, these require good judgement and leadership on the part of customer-facing staff, as opposed to following strict operating procedures. One only needs to be reminded of the incident when a passenger was dragged off a United Airline flight in April.

The practical implications of this distinction between the complicated and the complex is that the approach to dealing with situations and change needs to be different. Those who run complicated systems can introduce change by laying out a detailed design of what is to be changed, step-by-step procedures to implement the change and overcome employee resistance, and reduce variation in performance once the change is implemented. It is a highly rational, mechanical approach that can be managed, much like a machine.

However, this will hardly work for those who inhabit complex systems where conflict and unplanned changes occur all the time. Imposing procedures from complicated organisations onto complex systems are bound to fail. Working in a complex system means adapting to changes, dealing with conflicts, and constant learning. Introducing reform requires leadership. Management is about control; leadership is about change.

Most organisations exhibit both complicated and complex environments – just think of airline operations, a highly complicated activity, versus sales and marketing and customer service, which are highly complex activities. Employees, and particularly those at more senior levels, must be able to recognise the environment in which they are interacting and adjust their style accordingly – to that of the manager or that of the leader, and often it is a subtle combination of both.

Travel Industry Adoption of Digital Wallets is Ready for Take-off

Read Time: 7 minutes

How one company is helping to turn the smartphone into a digital engagement tool

This week’s Vantage Point interview is with Andrew Phillips, Director and Founder of Flon Solutions  –  a start-up based in Lausanne, Switzerland founded in 2012. Flon Solutions provides everything to turn smartphone digital wallets into customer engagement and marketing tools.

Q:   You started in telecommunications, and then decided to go off on your own. What was driving you in this and what was your vision?

I’m an electronics engineer by training and worked many years for a large European telecom operator, Orange. It was part of France Télécom Group (now renamed as Orange), which has operations across many countries in Europe and Africa. I had several project management roles and increasingly reported into head office functions – including the IT & Networks and Devices divisions.

These days the most popular smartphones are iPhone or Android, but a few years ago there was a much larger portfolio. Orange was buying and reselling €5+ Billion devices to their customers each year. This was a portfolio of around 130 devices that largely changed every quarter. So, picking the right device for the right customer segment, making sure that you’re giving them something to maximize their customer experience, was really important.

I worked with a team to analyze the specifications, features and pricing options for all upcoming devices from various manufacturers and match them to the right customers and assist in quarterly purchasing decisions for each country and segment. That was quite a challenging job. So, when I decided to leave Orange to start my own venture, I applied these data analysis experiences to customer engagement.

Then in 2012, Apple announced a new digital wallet application originally called Passbook. I thought “this looks nifty” and realized it was a great way to follow your customers’ behavior when interacting with your organization or brand.

In the airline industry, Passbook became quite popular – especially for e-boarding passes. Most airlines around the world now support digital wallets as a convenient, secure and standard way to present boarding passes to their passengers. They’re quick and easy to use at the boarding gate.

Passbook has since been renamed Apple Wallet and clone applications are available for Android. It’s also great for things other than boarding passes – coupons, event tickets, gift cards, loyalty programs and more.

So, Flon Solutions provides everything to create and manage digital wallet programs for customers and staff. We make it really easy to set up, distribute, and control these programs, and then measure how effective they are.

Q:   What’s it like switching from a corporate environment to now being an entrepreneur and running your own show?

It’s certainly very different from working in a very large company like Orange. You have to wear every hat there is, instead of expecting that someone else is managing sales or finance and you can just concentrate on technology or R&D. Now everything’s up to you and you quickly realize that sales is the most important thing.

There are a number of companies building products and services around digital wallets – though the market is still relatively small. In some cases, an existing IT department or contractor builds a custom implementation. For example, an airline usually already has a large contract with a service provider to manage their bookings, ticketing, billing and so on. And, they will usually engage the same team to add the digital wallet boarding pass functionality to their systems.

Other companies are specifically focused on digital wallet marketing. Some concentrate on the mobile payments side of digital wallets, such as Apple Pay. Others are more engaged with the consumer loyalty side – coupons, loyalty cards, events ticketing, and so on.

We often help our clients to understand the great advantages of using digital wallets to engage with customers or staff. In the airline industry, the use case for boarding passes is well known, but not always for other applications.

A key advantage is that you don’t need to build, maintain and distribute your own mobile App. Digital wallets already have everything you need to easily engage with your audience. To create a really engaging application for your customers linked to back-end web services and databases can easily cost $100+ K of development work.

Then, you have to promote your application in App stores that are already filled with over two million apps – both for iPhone or Android. So, you need to continuously push and maintain your app. Today, most people have stopped installing apps. In fact, 65% of smartphone users now install on average zero apps per month. Instead, they just use a few communication apps like Facebook, Instagram and WhatsApp.

So, we think a better way to go is to use all the powerful features in a platform that’s already installed on every iPhone – and something similar can be installed with one-click for Android users. It’s ready and waiting for any type of engagement program you might be interested in – loyalty programs, membership cards, coupons, events and more.

The nice thing is that the user has a consistent interface. They get a Pass that’s fully interactive, always up-to-date, works in multiple languages, has built-in geolocation or beacon alerts and push messaging. And, colors and logos are easily customized to your brand.

Most airline passengers are enrolled in frequent flier programs. However, many don’t really know how many points they’ve got on their card, what they’ve got to do to get to the next level, when their points might expire, or these sorts of things. This is because they usually have a static account and get occasional updates by post or email. With a digital wallet pass, everything is immediately available and always up-to-date.

Q:   What verticals or market segments have the most potential for adoption of the solutions you’re promoting?

Airlines already have a well-established understanding of digital wallets for boarding passes. They’re not always using it for loyalty programs. These tend to have their own mobile apps that have been developed separately and, consequently, as a customer you end up needing to use several different apps for the same airline.

If you fly regularly, you may even have several airline company apps on your smartphone – all with a different interface. This is difficult to remember and cumbersome for customers to use. So, consolidating these onto the same platform that the passenger is already familiar with for boarding passes is a better way to increase engagement while lowering marketing, development and maintenance costs.

Airports have different requirements. They’d like to provide benefits to their airport shopping retailers to make it easy for customers to find special offers or be encouraged to return, as we have done with our successful points-based loyalty program called StatusPass.

Airports have different requirements. They’d like to provide benefits to their airport shopping retailers to make it easy for customers to find special offers that may only be available at the airport, and be encouraged to return.

We also work with Swiss Tourism (and we’re currently reaching out to similar organizations across Europe), with products such as interactive digital coupon books or competitions for travelers – encouraging them to visit different places, events, attractions or hotels in a touristic region.

There are many opportunities in the travel and tourism industry that really work well with digital wallets. For airlines, because most travelers are already familiar with digital boarding passes, there’s a lot more that they can do.

For HR management, we have other products designed for staff, such as interactive ID badges. These digital cards help to confirm identity, but also provide easy access to work schedules and secure time-clocking. This is especially useful for staff that don’t usually sit at a desk and have access to an intranet. Instead, it’s easier to access everything they need during their workday via a smartphone.

And again, to develop and customize a mobile application for each division of an organization would be very expensive. Instead, we can easily assemble the right information all in one place for each team using a digital wallet pass. Our product – TeamPass – makes it super easy to set up and distribute the right information to different groups across an organization. You can easily interface with other systems – such as payroll or scheduling – putting everything in one place.

Q:   This is all part of the trend of digital engagement – whether it’s peer-to-peer or within groups – which is really taking off. Would you say that we’re still at the beginning of this innovation adoption curve?

Airlines have already adopted digital wallet technology for many years – for boarding passes and so on. Some have used the same features for other functions, in other verticals of the travel industry. Some hotels and car rental agencies are also using digital wallet programs for booking vouchers and special offers. Over 50% of travelers are familiar with digital wallets.

On the other hand, general consumer adoption of digital wallets and mobile payments is low, but it is increasing. In North America, over the last few years new mobile payment options like Apple Pay and Android Pay have been launched and are slowly gaining popularity. So this makes the digital wallet a great place for a brand or organization to have a presence. If a user is opening their wallet app multiple times a day to access a stored credit or debit card, and at the same time your logo is right next to that card, then they’re receiving brand reminders every day.

Q:   How do you stay ahead of the technology changes that may come?

In fact, things don’t really change that fast, in terms of the mass adoption of new technologies. It’s often a little bit frustrating when you build something and think, “Wow, this is going to be really great and everyone’s going to love this!” and it then takes longer to catch on than you had expected. It takes a long time to change consumer behavior for certain things. You also must make sure the people in charge of marketing or loyalty programs understand the benefits and are willing to try things out. Of course, hundreds of different ideas pop up all the time, and there are a lot of trials going on that sometimes bring good results and sometimes not. But, it certainly takes quite a bit of effort to get a large group of users to change their behavior to adopt a new technology.

Q:   What is your biggest lesson learned and what advice would you have for future entrepreneurs?

People talk about this famous “product/market fit” concept to ensure that you build something that the market really needs. It sounds like an obvious concept, but it’s really, really hard to get this right. There are a lot of adjustments and changes and pivots that you end up going through along the way before you really build something that a lot of customers are going to want. Then you need to figure out how to scale your business to meet the demand. It sounds like a simple concept, but it’s very hard to get right. It’s easy to spend a lot of time being a kind of consultancy firm, working on different projects for different clients. To push that into compelling, scalable products takes a lot more work.

Back to the Future

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A re-think for the think-tank on ATM policy.

Yesterday, during the World ATM Congress, a group of industry players launched a think-tank on how the efficiency and performance of air traffic management (ATM) can be improved through greater market liberalisation. I have worked the related policy questions for close to 20 years, first at IATA and then at CANSO in its representation to ICAO, so I cannot help but comment on yet another noble initiative…. Unfortunately, over the years there has been lots of study and debate, but little action to effect the real change we want to see. If we want to improve the efficiency and performance of ATM, and fundamentally change how air navigation services are provided, then we would do well to look to the past – how it all started – with a view to what the future could look like.

In the early days of commercial aviation, it was the airlines themselves that provided for their own navigation aids. Companies like KLM and Imperial Airways established beacons along their routes to the far east. And, traffic control techniques at airports were introduced by the airports themselves, working with the aircraft operators. This all changed after WWII, with the signing of the Chicago Convention wherein each contracting State committed to provide air navigation facilities and services in accordance with international standards. In essence, the responsibility for these tasks was taken away from the airlines and airports. Unfortunately, liberalisation of air traffic management as proposed in the policy paper, either through competition for selected ATM services (i.e. competition for the market) or corporatised (or privatised) ANSPs operating independent of government, does not offer a suitable alternative to true competition (i.e. competition in the market) since both approaches can be gamed by the actors involved. This approach would amount to a mere “tinkering at the edges”, and has already been variously tried.

The best way to accomplish true competition and real change is to turn over the responsibility of service provision back to those who do in fact compete in the market – the airlines themselves (“Sorry, as States we have made a mess of it, and we wish to turn the responsibility of service provision back over to you!”) In meeting this responsibility, the airlines can contract with global companies that provide the communications, navigation and surveillance services that are needed en route in a more efficient manner, much of which is now already satellite-based, and making full use of modern aircraft capabilities. Airports likewise can contract with entities that provide traffic control services in and around the airport, or provide the services themselves. These services would need to be provided at competitive prices since airlines can and do make choices on where they fly and at what frequency. Airports have long maintained that they compete for traffic, thus it stands to reason that they are already incentivised to be cost-competitive. If they are not, their connectivity to the world and the cities they serve will suffer.

Article 28 of the Chicago Convention will at the very least need to be re-interpreted to reflect modern times and available technology. At worst, it will need to be rewritten to reflect the fundamental responsibility that only the State can and should provide – regulatory oversight. States should ensure that aircraft operators have made the necessary arrangements for the availability of facilities and services to facilitate air navigation in a safe manner, to be provided in accordance with international standards and practices agreed for the most part by the industry itself. This will also put a stop to the micro-management by the regulatory community in a service function that should rightly rest with industry. The pace of technological change is just too fast for ICAO and the regulatory community to keep pace, and therefore it must adopt a performance-based regulatory regime.

Yes, what I am suggesting is radical. It entails a break-up of the monopoly air navigation services industry and a fundamental restructure that will result in new organisational forms and arrangements. This is not dissimilar to telecommunications deregulation and the break-up of the PTTs in the 1980s and 90s, which was urged on by public calls for dependable, technologically advanced and reasonably priced services. Further, the advent of the internet has been a significant disruptive force for the telecommunications industry. Such disruptive forces are equally at play for air traffic management that can render the role of the air navigation service provider irrelevant. States can best serve this industry by preparing it for competition, for it will be overrun by technology advancements. The question is: will the industry step up and be the change it wants to see?

Rwanda – a Country on the Move in Aviation

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En route back to Montreal after participating in the AviationAfrica conference this week in Kigali, Rwanda, I was struck by the enthusiasm participants had for the future of aviation in Africa. The event was expertly organised by Alan Peaford and his team at African Aerospace magazine, and brought together leaders from airlines, airports, manufacturers, technology providers and many others to address the challenges, but also the tremendous opportunities Africa presents for aviation – from open skies policies to airport expansions, financing and manpower training, safety and security, as well as the introduction of UAVs. And, in many ways Rwanda is leading the way – it is a country on the move. The event was honoured by the presence of President Paul Kagami, who expressed that for Africa to achieve significant success in tourism and trade, the continent must embrace open skies. Rwanda has stepped up, and is pursuing efforts towards the creation of a single African air transport market. This is the kind of pro-business and visionary leadership that a panel of airline CEOs confirmed as essential to building a vibrant air transport market in Africa.

The panel on UAVs that I participated in also demonstrated how Rwanda is leading the way in reaping the benefits of this new technology while addressing the risks in a pragmatic way. The approach of the Rwandan CAA – the regulator – has been to work in a collaborative manner with UAV operators who must demonstrate the safety case for UAS operations. UAV operator Zipline is providing a valuable service to public health in Rwanda by being able to deliver vital drugs and blood products to remote locations that are otherwise hard to reach. As Will Hetzler – COO of Zipline – explained, Rwanda has been an ideal proofing ground for the beyond-visual-line-of-sight delivery drone concept, the type of operation that is still not allowed in most jurisdictions, but is the way of the future. Much in the same way that Africa was an early adopter of mobile phone payment systems, it is also at the forefront in the adoption of UAV technologies, which in my view will extend to the integration of artificial intelligence and fully autonomous operations. While the adoption of new technologies in Africa has been driven by necessity, the continent also does not have to contend with legacy systems and institutional hurdles that stymie their introduction in the West.

Safety is often raised as a major hurdle to the development of aviation in Africa. Yet, what I heard from participants was tremendous concern over this reputation and interest in improvement and learning from the experience of others. “Knowledge without wisdom is like water in sand” is a Guinean proverb I cited to start off the panel discussion on safety. There has been a great amount of planning, best practice guidance and training material produced over the years to improve aviation safety, especially in Africa. The knowledge exists. It is now necessary to make use of this knowledge and experience for deeper understanding of what drives safety improvement. It starts with good governance. In Africa, political will and commitment is essential, as are strong and sustainable institutions that will ensure good governance and safety performance. The development of a robust safety culture requires a solid foundation. Further, the operational level needs to be empowered to “live and breathe” safety in such a way that it becomes the number one priority and concern for those on the frontline, who can act and report without fear of retribution. In the end, safety is everyone’s business. It’s a team sport. My sum-up was that safety improvement requires good governance; good safety culture; and above all, good teamwork. And, my sense from the conference participants was that this was the wisdom they had already embraced.