Tag: Digitization

The 5 Trends Shaping the Future of Aviation

Read Time: 5 minutes

What Are You Doing to Remain Relevant?

“Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.” Those were the words of Jeff Bezos during Amazon’s all-hands meeting held last year in response to the question what Day 2 would look like. He continued with what he felt were some of the essentials for Day 1 defense, on how to fend off Day 2.

Among these essentials was the eager adoption of external trends – “These big trends affecting our world are not hard to spot,…. If you won’t or can’t embrace them quickly – or if you fight them – you will probably be fighting the future. Embrace them and you have a tailwind,” said Bezos. I absolutely agree, and I like the aviation analogy!

For those not familiar with aviation terms used as business jargon, a tailwind is a wind that blows in the direction of travel and increases an aircraft’s in-flight speed and reduces the time required to reach its destination. Thus, in business a “tailwind” refers to a situation or condition that will ramp up top-line or bottom-line growth, preferably both.

Every organisation – both large and small, public or private, for profit or not-for-profit – should be aware of today’s big trends that can become tailwinds to a more prosperous future.

As you read the following top five trends that are shaping the future of aviation, ask yourself some profound and important questions: “How can these trends impact our business? What capabilities do we need to build to exploit them and continue to delight our customers? How can they take our business to that next level of performance and value creation?”

Artificial Intelligence and machine learning goes mainstream

AI is quickly becoming a mainstream obsession that will affect every industry. In aviation, algorithms are learning to predict aircraft delays, giving airports and airlines a better chance at avoiding them.

Airlines like EasyJet and Emirates are using AI to redesign the ticketing process and improve the in-flight experience to cater to customer expectations.

But the real promise is in the cockpit, where AI autopilots could help manage the complex airline operation and even respond to emergencies as they arise in the cockpit.

For the moment, AI is augmented intelligence, i.e. man plus machine, where AI augments human performance. Instead of replacing productive workers, the use of AI technology will be pervasive – from piloting an aircraft, to aircraft maintenance and air traffic control, and to training and simulation – and is being used to amplify human performance.

The introduction of AI will be subtle but it’s taking hold as the pressures to improve performance continues to grow.

Ask yourself :

How can we exploit AI to enhance the performance of people?

How can we delight our customers with new insights this technology can give us?

Automation achieves dramatic growth

Automation, driven by data analytics, AI and advanced hardware, is set to disrupt work as we know it. We’re automating traditional jobs out of existence on a regular basis.

In the automotive industry, autonomous vehicles are fast-becoming a reality, and it will be a game changer for the trucking industry where it is forecast that there simply won’t be enough drivers.

Similarly, with the forecast pilot shortage, it is not hard to imagine that remotely-piloted commercial aircraft – first for cargo, followed by passenger aircraft – will take to the sky. And, while still some years off, as AI and further automation takes hold, we will eventually see a transition from remotely-piloted aircraft to fully autonomous aircraft, capable of self-separation and flying the most efficient flight trajectories.

The air traffic management function will therefore also see a major change, with increased use of AI and automation driving out the traditional function of the air traffic controller and heralding in the air traffic manager responsible for monitoring the efficiency of traffic flows.

Ask yourself :

What jobs in our organisation are ready to be automated out of existence?

What skills and capabilities do we need to build, and what does this mean for our training and development programs?

Experience management is the new quality management

Brought on by digital mobile technology and the online economy, customers today want companies to provide a consistently wonderful experience from beginning to end. And, if the experience meets expectations, customers will be willing to spend more.

We’ve seen this with Apple, Nike, Starbucks and other brands that have created a following and an entire ecosystem to support the customer experience.

There is no reason not to expect the same will happen in air transport where offerings are marketed that uniquely cater to the traveller’s needs and desires. Customers are looking for travel companies that fit with who they are and what they value. They want to work with companies that support the values, causes and ideals they support.

Quality is a given, and this is not something companies will be rewarded or recognized for. Quality is expected, and it’ll be an afterthought.

This shift in consumer expectations will require a whole new approach to customer engagement, and some airlines have only recently started to explore how this can be achieved.

Ask yourself :

What type of experience would our customers value most?

What would have them coming back for more, and evolve into a following?

Blockchain everything

While Bitcoin and other cryptocurrencies have received a lot of public attention lately, it is the underlying technology that is truly revolutionary and will disrupt several industries as well as government services.

In essence, blockchain is a different way to process transactions or records that does not require intermediation. Put simply, blockchain is a ledger of digital events that can be shared and trusted without the need for central authority.

Importantly, the blockchain resides in the cloud and isn’t located on only one computer, but on many computers, and every computer is directly in contact with all other computers in the blockchain network. Due to this constant synchronisation, it is tamper-proof and establishes trust in a transaction. This allows the transfer of anything of value between two parties without the need of an intermediary.

Blockchain is emerging in healthcare as well as financial tech.

In air transport, the technology can be the basis for virtual or digital passports that store biometrics in the form of a single secure token on a mobile or wearable device of the passport holder.

Further potential usage would be in baggage tracking, cargo manifests, aircraft history and maintenance records, aircraft spare parts logistics and a lot more.

Ask yourself:

What transactions can be simplified and made more secure using blockchain technology?

How can it affect our supply chain and what ecosystems must be built?

IoT to friendlier skies

As the costs of Internet-connected sensors and networking equipment continue to fall, IoT (Internet of Things) technologies will continue to play a bigger role in efforts to make aviation more efficient and improve the passenger experience.

While aircraft components such as engines have been providing real-time IoT data on everything from performance to required maintenance for some time, other industry players are increasingly finding new ways to deploy and use IoT technologies.

Airports are deploying interconnected sensor networks and data hubs to track and understand passenger flows and behaviour in the airport terminal to drive retail revenues, reduce connection times or improve the boarding process. And on the airport premises, airlines and airports are using IoT technologies to locate and keep track of their equipment.

Ask yourself :

Which activities can we learn more from through increased or improved monitoring?

Which of our processes can be improved or made more efficient if we had more data?

Keeping abreast of the trends affecting our world is of strategic importance and requires that you revisit your core assumptions on a regular basis. I observe that far too many executives devote their time to managing the day-to-day operation, and not nearly enough time to strategic and innovative thinking. Are you devoting equal time and energy to both?

Business resilience is about adapting quickly to trends and technological disruption as much as it is about maintaining and safeguarding the business operation. In the end, it is all about staying relevant, by continually and perpetually innovating and creating business value. How can today’s trends become tailwinds for you and your business?

P.S. Jeff Bezos’ 2016 letter to shareholders can be found here. I look forward to reading his 2017 letter, expected in the coming month.

The Building Blocks for Smart Airports

Read Time: 10 minutes

Grant Furlane, CEO of LocoMobi

How license plate recognition (LPR) technology and the Cloud will improve efficiency and provide better passenger services at airports

This week’s interview is with Grant Furlane, CEO of LocoMobi. Grant has over 35 years of experience as an entrepreneur in the technology sector, specializing in the parking, transportation, cloud computing and network security industries. He has been involved in over 600 million dollars of technology investments and was contracted to lead several initiatives for large public IT companies. He aggressively built three transportation technology companies that established the vanguard for tracking and monitoring vehicle movement, and developed and sold integrated control systems for major airports, hospitals and parking lot management companies.

Q: How did you get started and what got you going?

I’ve never really worked for anybody. I came right into being an entrepreneur from day one. But what got me into infrastructure – believe it or not, this is about 25-30 years ago now – is that I felt we were in trouble. At that time, I was really intrigued with the world of transportation, congestion, and how we were going to deal with the problems I’d already seen in places in Europe. I had co-founded the World Symposium of Intelligent Transportation Systems (ITS) in my late 20s, early 30s and there were three of us involved then. I think that forum has now grown to a membership of about 10,000 strong.

At that time, it was my feeling that to be more efficient in the transportation sector, we had to find ways to be more efficient in moving cars and people. And so, during the first 20-25 years of my career I developed companies that revolved around being more efficient in moving cars and parking cars, which is now leading me into an area that I have always had a passion for – how to manage the transportation infrastructure.

The problem was not that it couldn’t be done, but that the technology just did not exist to form the needed communications infrastructure. As it is still today, if you want to go from one building to another, you’ve got to go into a parking garage and take a ticket or use an ID card. If you want to go to yet another building, you will need yet another ID card because it could have a different building owner, and a different parking garage operator. If you go onto a toll highway, you need yet another pass. When you get on public transit, you need another pass….

Alternatively, if I could find a token as a unique identifier that you could pass around, then you wouldn’t need multiple passes. So, 20-25 years ago the only token available that could be moved around was a license plate. The problem was that the technology to get read rates high enough to make this plausible did not exist. So, for years and years I worked on different algorithms to improve performance – both in terms of speed and accuracy of license plate recognition (LPR.)

Then more recently, the cloud came about which allows a plate to be recognized anywhere, anytime, in real time. Both technologies had to work together for this to really work. And that is, scan a number plate – the unique identifier – and move it around via the cloud.

While I had been developing all the hardware, there was no enterprise hardware that could connect to the cloud directly. So, I designed and built it all – the payment terminals, the payment kiosks, etc., so that we could have an integrated solution. At the same time a fellow named Barney Pell, who is one of the most innovative people in the world, was working on a mobile way for people to pay for transportation and he started with parking as well. However, he was not getting any traction. He had heard about me and got in touch. I looked at his business plan, and said “the software is good but you will need to pivot to a different plan to hit the expected numbers” So, I helped him design some technology that would work with his software and we went out and patented the thing we called Card Kit and Gate Kit, which essentially allowed a cellular phone to find your location, and then when you pay, open the door or a gate.

We now started to see revenue, but it wasn’t very big. So, Barney then convinced me to merge and we formed what is now LocoMobi. A month later in May 2014 we went to the TiE50, which is Silicon Valley’s premier annual awards show for early stage technology startups, and we won. This followed with 2nd place in the “Smart Building” International Startup Competition in Nantong, China. This confirmed that we had leading edge technology as a startup, and so we went out to implement, not forgetting that my goal had always been to be in parking, transit and tolling – anything to do with managing people and transit, cars, trucks, toll highways, and parking. As we’ve become successful on the parking side, landing two huge contracts with Park ‘N Fly and WallyPark for airport parking, we were offered a tender that no one else could do, which was for the Chicago Skyway Toll Bridge – a 7.8-mile-long toll road built in 1958 that connects the Indiana Toll Road to the Dan Ryan Expressway on Chicago’s South Side. This launched us into tolling one year earlier than planned. And, we have now launched transit applications just a month ago.

Q: What got you interested in the airport scene?

I’ve always felt that the airport environment was a distinct and different market all on its own, because it has so many moving pieces. Airports are becoming smart cities themselves. Although I could tackle the airport environment for parking, I felt this was too limiting. An airport is very big in retail, it’s very big in customer service, it very big in parking, and it’s very big in so many other things like media and advertising. I’ve been holding back because I want to offer an integrated solution that makes sense for an airport to want to invest. And so, we’ve set out to build upon what we already have as infrastructure, so that we can manage not just parking, but ground-side and air-side transportation.

And there is security, which also can be managed with the same infrastructure. We’ve come from reading license plates to smart plates, for which we use artificial intelligence – machine learning – so, why can’t we go further? And so, we started a new company called Quest Intelligent Technologies that is one of the first companies out with machine vision technology – or artificial vision or vision intelligence – that provides automatic imaging-based inspection and analysis. This involves using cameras and giving them intelligence to see more than we can see with our eyes. By seeing the constant flow of people and/or cars we are able to see differences or anomalies that allows it to be predictable.

The technology is now at a level that we can see so intensively into something that it can actually layer itself into hard matter. For example, the vision intelligence cameras that we’re testing now can get about seven layers into your clothing. So, let’s pretend a guy walked into the airport in today’s world and had a gun. We would catch that as soon as he walked into the airport. Forget the security screening areas. You can’t afford to do that with all the people milling around. You need to catch the suspect right upon entry. So, this is using CCTV and vision intelligence. It allows us to see things and predict things. In addition to that, I can cover the entire ground side. Why is that car circling over and over? Why is that FedEx truck there for three hours when it’s supposed to be there only three minutes? With all this different information, you can manage the ground side traffic movements.

And, of course the parking is obvious – it’s what we do now. For example, what happens to my car when I drop it off at the valet service? Does it actually get to the garage? We make sure it does. As soon as we take a picture of the plate, we are watching for that car to enter the garage. We can make sure no one’s switching cars and doing things they shouldn’t be doing. Again, all this data is hosted and shared in the cloud.

Likewise, on the airside we can track assets. Why are there three planes in this area on the tarmac? Why is this delivery truck where it shouldn’t be? We can do this since from quite a distance we can read serial numbers, and we can even visualize differences associated with the asset. Like, why are there three people on that cart when there should only be one? With vision intelligence and machine learning, the possibilities are endless in creating what we can call a smart airport, just like the smart city concept. With the smart city, data are collected from citizens and devices using sensors integrated with real-time monitoring systems, that are then processed and analyzed. The information and knowledge gathered are then used to tackle inefficiency, and enhance safety and security. Technology and digitalization has allowed this to become a reality. It’s a great story.

Q: What are some of the bigger challenges that you’re facing in implementing this vision?

For a person like me who’s always working on the edge, the biggest challenge I have is in introducing change. People are very, very nervous about making changes. And airports have probably been the hardest. Most feel secure when everything is hardwired throughout the airport. Cloud computing as an IT paradigm is still not readily accepted, while for most businesses if you don’t go to the cloud, you’re probably not going to be in business for long. There’s been a real challenge at the middle management level and in the IT departments to accept where everything’s going. By going to the cloud, in many cases, you can eliminate half the IT department. Making such a move can make the operation twice as efficient. The return’s immediate as far as the investment is concerned. And the results for the operation are even better. Now you’re getting real time information and the ability to predict stuff. However, because it can be such a complicated presentation, we really need to get to the right people to show them what the technology can do for them. Then again, five years ago I couldn’t convince people to use LPR for parking management. Now it’s the standard in every single request for proposal (RFP.) People thought I was crazy at the time!

Q: The RFP process – it’s one of those things you come up against when you’re dealing with government organizations, which airports are for the most part. What’s been your experience with this procurement culture?

It’s primitive. Let me tell you why. You have people who have all this infrastructure already built in the airport, and they’re afraid to move away from it. So, when it comes to procurement, they end up asking leading edge technology companies to move backwards! They will ask vendors for a certain technology because that’s what they have. And they have relationships with the people who put that in. But here’s the biggest problem. And we all see this all the time. Typically, in order to bid on an RFP, you must reference up to five installations that have been running for five years, etc. Well, this means that you will have legacy technology. It’s like saying, “If you have anything new and innovative, you can’t bid it.” I come across this time and time again. The innovative companies that can provide most value in terms of new concepts and technologies are simply not given the opportunity to enter the market, because of this old-style procurement practice of very prescriptive RFPs.

Q: How have you been able to get around that? Would partnerships or joint ventures with established companies be a way forward for you?

Absolutely. Our approach has been to go out and talk to innovative owners; people who have money in the game. When you are a startup or inventor, you need partners not just customers who are prepared to work the good and the bad with you. Because there are tough times when you’re developing technology. Whether it be Bill Gates of Microsoft, or Steve Job of Apple, or Henry Ford, it doesn’t matter. You are going to fail and gain, fail and gain. But when you have partners who believe you can get to the goal line, it makes all the difference. So, we said, “Okay, let’s go after innovative clients – clients who would listen.” And, we also decided to pick up a couple of big ones.

So, the first one I went after was Park ‘N Fly in Canada. Why? Well, I knew who they were, they knew me, and they were bought by CKI, one of the biggest infrastructure funds in the world. As a result, it didn’t take much more than three weeks to convince them to go with LPR, automated payment, mobile transactions, everything, and all cloud-based. So, we probably concluded one of the biggest parking contracts ever, in short time, covering every major city in the country.

Now that we had a reference from seven city airports, we went south and did the same thing with a company called Wally Park that is actually bigger than Park ‘N Fly and we got 21 locations in the US. Technology acceptance is usually the biggest challenge, but suddenly we were gaining traction and the reaction I was getting was, “We get it, Grant. We’re prepared to take the risk.” What got us there quicker than most startups is that we got validation. We won the TiE50 for having one of the best technologies in the world. Then a week later, we won the Smart City competition in China. So, that was the route we took. Further, we created probably the most incredible board there is of any small company, and we brought in people from the industry. That gets you business and that’s what you have to do as a startup. Today – only two and a half years later and now with 40 employees – when I’m bidding for a contract, I have prime, platinum references.

We are still called a startup, but we don’t operate like one. We grew much quicker. We hit profitability near the end of our second year. It’s a much different company today. And all my other companies operate the exact same models – they all have one thing in common. They all can manage on my infrastructure.

Q: What would be your top three bits of advice you would have for any future entrepreneur?

The biggest one – and I’m going to write a book on it – is the word ‘Entrepreneur’. Don’t use it lightly. Entrepreneur doesn’t mean raising a bunch of money and spending it. You have to live it. You have to sacrifice. You really need to feel it, and have the passion, and that’s what a lot of people lack.

An entrepreneur is not a guy who goes and buys a Mac’s Milk or a 7-11. That’s a small business owner. An entrepreneur is a guy who has an idea, and literally will do what he has to do to make it a reality. When I met my wife, I was living in a campground, by choice. I had no money and I wanted to develop my first idea. I wasn’t trying to raise money so I could buy a $3 million-dollar house. That’s not an entrepreneur.

The second thing I’d tell everybody – and this very important – failure is not an option, because there’s no such thing. People will ridicule you and say, “He’s crazy.” You don’t fail. You experience. Everything you do, you build upon. And if you keep the focus, if you truly do it, I mean really keep the focus, you’ll get there. But then it goes back to what is a real entrepreneur? It’s a guy who won’t give up. He’ll be the last guy standing in the plant. He’ll be the guy at home working because he had to lay everyone off. If you don’t give up, there’s no such thing as failure. Most people don’t realize that 99 percent of the companies that fail didn’t realize how close they were to success. They just gave up. Unbelievably, they were almost there. But, that last one percent is the killer for all of us. I’ve never felt I had to give up, ever. There’s always a way.

And the last point is the most important. Be prepared to pivot. I don’t care how good you think your idea is. Don’t stick to it just because you think it’s great, and it has to happen. Don’t be afraid to pivot. Some of the greatest companies in the world started out with one thing, but found another opportunity through it and pivoted, and subsequently were very successful.

Aviation – An Industry Ripe for Disruption

Read Time: 11 minutes

How a technology company is revolutionizing aviation efficiency through better data management

This week’s Vantage Point interview is with Ian Painter of Snowflake Software, an award-winning provider of cloud and on-premise software solutions for the aviation industry, which he co-founded with Eddie Curtis in 2001. Its Laminar Data Platform is the world’s first commercial software platform dedicated to fusing, cleaning and organizing the world’s aviation data and making it available in real time. Ian and Eddie had been working for Ordnance Survey of the UK for several years before they decided to go off on your own to start Snowflake Software.

Q:  What got you started and what was the problem you were trying to solve?

So, it’s quite an interesting story really. My whole career’s been involved in data management, and at Ordnance Survey – the UK’s national mapping agency, which is the equivalent of the US Geological Survey – Eddie and I led a flagship program called OS MasterMap, which provides highly-detailed geographic data of anything bigger than 20 centimeters on the ground. So that’s a database with nearly a billion features in it. At the time, we built the largest spatial database in the world.

When the program was delivered in 2001 we resigned from our jobs to set up Snowflake, but the interesting part of the story is we actually resigned on September 11, 2001 which was quite a monumental day to start your own business. I mean, in the morning everybody was gossiping in the office that Eddie and I had resigned, and then in the afternoon the actual realization of what had happened in the Twin Towers brought everything down to a big bump. My boss at the time instantly said, “Well, the industry is going to collapse,” and it did. The IT industry in the UK pretty much collapsed within about three or four days. The consulting day rates and everything just tumbled.

But we decided to push on. We were very niche, focused on managing map data in big spatial databases. It was really the first time people were considering maps as data that could be analyzed and queried to get business insight from. This was a substantial change from when digital maps were just and efficient way to print paper maps. This is very similar to aviation, where you have a huge amount of aeronautical data, the sole purpose of which is to print a paper AIP (Aeronautical Information Publication), or a paper chart. Aviation hadn’t yet taken that journey, moving from products or paper publications to actual data sets – and aviation is still in the midst of that transition.

When we started we were very focused on local government in the UK – nothing to do with aviation. It was all about managing spatial data and databases and we created our first software product on the back of the work we’d done at Ordnance Survey. The idea was that anybody who knew something about databases could use our software product to manage spatial data and anybody who knew something about spatial data could use databases to manage it.

So, it was like trying to glue those two fields together that previously had been very separate. We were trying to bring spatial information closer to mainstream IT standards, rather than spatial information needing its own types of databases and its own type of software, which at the time they called “GIS,” geographical information systems. We were just saying, “You’ve got all these things like an object-relational database management system as developed by Oracle, and they have started introducing location-based data types, so why would you need something special? People don’t think that a string or a number type is special, so why should spatial data be special?” We were trying to produce a product that would simplify and commoditize spatial data and make it easy for people to manage.

And, we had a reasonable go at that. I mean, Snowflake started in 2001 and for the first 11 years we were 15 people doing around 1.5 million in turnover. It was doing okay for a business, but it wasn’t really growing; we were adding about one or two people a year.

Then we got to the stage where FAA and Eurocontrol were looking to introduce more standardization, the whole idea being how we could bring more mainstream technologies and non-industry players into the industry to try and expand the supply base and create more efficiencies. When you come from the outside and look at the air traffic management (ATM) industry, it’s incredibly proprietary. And it’s got a very, very narrow supply base.

So we applied and worked in some research programs where FAA and Eurocontrol were actively looking for players who weren’t currently in the aviation space, to work with a whole load of new standards they were planning. And we were able to – at the time – take our technology from the UK local government space, and within four or five days adapt it to work with some of the new aeronautical standards.

Once we did that and found how easy it was – mainly because FAA and Eurocontrol were taking the step to try and make things simpler and more mainstream – we started to think, “The aviation industry is incredibly proprietary. It’s very monopolistic. It’s very ripe to be disrupted. It has a huge amount of inefficiencies, and it’s very behind the technology curve.” And so, we were looking at that, thinking “It’s a global market, and growing. And, it’s much better funded than UK local government, which is getting budget cuts year on year.” There was much more of an opportunity to make a big difference, both from a financial perspective, but also from a societal need to drive efficiency and drive down environmental impact – all these things, by applying what is basically mainstream IT best practice. And so, we saw that opportunity and then jumped into it. And that’s how we got into the aviation space.

Q:  What was the early success story in terms of getting your “foot in the door” in the aviation industry?

We started doing bits of research for Eurocontrol, building prototypes for the new standards. And, then the SESAR Joint Undertaking created a competition called “SWIM Masterclass.” So, we approached NATS saying that we would like to work with them on this. At the time, they had an idea for extended arrivals management, which was an idea of creating an open interface on top of the Heathrow AMAN System and then sharing that data in a standard way to adjacent ATC centers (dubbed the XMAN project.)

To get a foot in the door, we offered to do that work for free. I think it cost us about 60,000 pounds to build the prototype, and NATS provided some subject-matter experts to help us. We built it and ended up winning the SWIM Masterclass for the first year. We had been up against some big players, we came out of left field and nobody really knew us at that time, so to win the prestigious award was amazing. We were very grateful to NATS for providing the idea, but they were also amazed at the speed with which we turned that around. We built in about five to six weeks.

The difference was that we did it in an Agile way, employing Agile SCRUM methodology to software development. NATS had never worked like that before. The idea was that we would be dropping what we call ‘thin slices’ of the system to them every two weeks, in a very transparent manner. We did three sprints, and were dropping the live system to them pretty much on a daily basis. This idea of continuous deployment and continuous integration is considered mainstream among software developers like Facebook and Google and all them use all the time.

In this scenario of developing the prototype, for which we won the award, we then went straight into a production pilot with a major UK Airline involved. We managed to get that pilot running pretty quickly, within a couple of months, and almost within another couple of months of it running, the airlines that were involved said, “Look, we’re making really good fuel savings here. You’re making a big difference to us. We want this to go to production.”

So, NATS went through an internal business case and gave us the go-ahead for the production system to build. And, about six months later we deployed that into their CTC (Corporate and Technical Center), which is their production environment. So, we’d gone from research idea to production deployment in a span of nine months. From an industry perspective, this was just unheard of.

And then, the XMAN project won a whole lot of awards and got media attention, because anybody’s who’s flown into London just hates going round and round in circles in the traffic stacks. I think we saved five million pounds of fuel for the airlines in the first year, which are a huge fuel savings.

The whole experience showed that you could do things very quickly, just by the simple means of taking an old legacy system and wrapping it in a modern interface, enabling other airspace users to get insight into the data that previously only NATS had. By getting that insight, the adjacent ATC centers could now make simple decisions to slow down a flight, knowing that – if it were to carry on at its current speed – it will be put into a holding stack when it would enter UK airspace. So, if you slow it down earlier, it burns less fuel and it’s much better from a safety perspective. Also, from a passenger experience, it’s a much smoother flight and a lot less frustrating. And then from an airline’s perspective, they save a load of money on fuel.

From there we started really growing as a business, building smaller production systems for other ANSPs. We have been trying to move up the value chain, so to speak, each system at a time, but that was the first one.

Q:  The ATM industry is beholden to proprietary systems. Do you see that changing, now that people see the realm of opportunity?

I can definitely see that changing from when we got into the industry some four years ago. You now see several forward-thinking ANSPs such as the UAE’s GCAA, NATS, US FAA, Skyguide, DFS of Germany, Airservices Australia, and Airways New Zealand trying to open the industry up, particularly around initiatives such as SWIM (System Wide Information Management), which is mainly where we focus our business. That’s all about trying to standardize the way that data is moved from system to system and organization to organization.

As soon as you start having those open interfaces, it provides an opportunity for someone like ourselves or any new player to come into the industry. Whereas previously, because the industry was based on things like AMHS (Aeronautical Message Handling System) or AFTN (Aeronautical Fixed Telecommunication Network) for the exchange of digital data, which is a completely proprietary network technology, you had to have a physical metal box to get access to the data, which costs several thousands of pounds.

So, there’s been a natural barrier in the aviation – in the ATM space – that stops smaller or newer players from coming into the industry. For ourselves, we came in and focused on the newer parts of the industry that was much closer mainstream IT technology. So, this was standards, web services, XML, open interfaces, and the NextGen view of the world. That enabled us to start building prototypes, get quick results, and impress customers. It enabled us to build a business around a “new world view” if you’d like, the new more-open ATM space.

I think what is surprising is that we expected the industry to move towards that new world a lot faster, because you can see the savings that are possible by just buying off the shelf software used in other industries. Suddenly, for the first time you can buy something from a non-aviation provider and get a lot of economies of scale. This transition is definitely accelerating at quite a pace now, but I think we were expecting it to open up a lot quicker.

Q:  What are some of the changes that need to happen, in your opinion, in terms of the current supply base? How do you see the market evolve?

What surprises me is how narrow the supply base is. I mean the supply base is tiny. But, I think that’s definitely changing. Certainly, from our perspective, coming in with new ideas and not having any legacy is in some ways to our advantage because we can just jump straight into the new. I think that has enabled us to grow significantly in the last three years.

Q:  What does that mean for procurement practices, which can be quite cumbersome? Do you see changes there?

That’s a really good discussion point. There are two things I think: there’s the practices of procurement; and then there’s the practices of implementation – the systems engineering process that exists over the life-cycle of the safety critical or semi-safety critical systems.

When you talk about the procurement side, because the industry has been incredibly proprietary, it favors these big, monolithic boxes, whereas in most modern industries there’s a much more collaborative relationship with the supplier. It’s less arm’s length and a lot of more Agile.  Currently most RFPs in the industry are fixed-price and Waterfall contracts that define thousands of requirements upfront and only deliver the business benefit at the end when all those requirements are complete.  Given the complexity of the problems in the industry, no customer truly understands the problem in enough detail to make this successful, so more often than not the supplier has to absorb the risk of the requirements being wrong and potentially make a loss on the project. This traditional type of procurement results in a very narrow supplier base who build a different “black box” for every customer with millions of pounds of services work.

Changing the procurement practices of the industry requires a change in mindset. It’s a case of “we’ve always done it this way, so we’ll continue that way,” which actually causes a major problem for the industry, as it just permeates more black boxes that cost millions to build, tens of thousands of pounds to change and more than six months to deploy that change. So, I think we’ll see a lot of change from a technology perspective but unless the procurement and system engineering processes change around it, it’s going to hold the industry back from realizing the benefits.

Q:  What advice would you have for future entrepreneurs entering into the aviation industry?

We’ve found that it’s best to start up a business with a domain expert. Domain expertise is huge. We’re four years in and now we’re very different because we have a pilot, and an ex-air traffic controller on staff. We’ve now hired domain people, but it took us a long time to learn the domain. Technology-wise, you know there are some really interesting problems here and they’re actually really complicated. But lots of people can solve problems. Not knowing the domain it was hard, because when you come across customers they talk like everybody knows what it’s like to be an air traffic controller or a tower operator. They talk in almost a cryptic language. And if you don’t talk in that language and understand the operational domain itself, you are going to struggle. I think it took us three years to get really, really, really into the detail of understanding the operational domain. So, that certainly held us back in the beginning.

I think you also must be realistic that the larger players are going to continue to dominate the industry. There are some larger players out there that are changing and are trying to bring in change, and you must be able to work with them and respect what they bring to the table. So, certainly getting some good relationships with the big system integrators is key as well.

We are relentless at trying to change things. So now there’s getting quite a few vocal ANSPs out there trying to change the industry, and trying to commoditize it, so it’s important I think to just keep pushing on. There are different ways of doing it; you don’t have to keep doing it the same way. You know, you can do things differently and still achieve the same safety output, the same data quality that’s needed, you can still do that and trying to bring more mainstream practices or more modern practices into the industry will be a good thing for everybody. So I think that’s a key thing. You’ve got to be relentless at, for us that’s our edge, is that we’re trying to be different in the way that we deliver operational systems.

Q:  What are your future plans; what’s the next step in your journey?

We won a flagship system with the GCAA in the UAE called SWIM Gateway, which will be a key piece of regional infrastructure for the Middle East. It’ll bring together the three main carriers of the Middle East with six airports and several other key stakeholders to create an information exchange hub.

That’s keeping us busy right now. From there we’re starting to get more involved in linking airports and airlines and ANSPs together. Previously, we had been focused on ANSPs only, and we’re starting to get good traction in that market right now. But it’s very important, we think, to start bringing in A-CDM by linking airports to ANSPs and airlines to airports. So, we’re expanding our core business out by trying to link those three together.

From a research perspective, we’re very interested in the data analytics side of things. There are a lot of people doing that, but it’s interesting because we’re working a lot on harmonizing multiple sources of data from lots of different organizations into one source. Because the industry has been very siloed, once you have the harmonization standards you can start bringing data together and running analytics on the data. That’s never been done before. And, it can start solving some problems in a reasonably straightforward manner, using analytics tools. So, we’ve been doing quite a bit of research into that side of things.

We’re also considering a different kind of business model where we embed our technology into a partner’s, rather than solely doing direct business. So that’s something we’re experimenting with as well. There’s lots of change and lots of growth to deal with, and we’re now actively seeking investment. That’s a big change in view of the fact that we’ve grown organically, with Eddie and me still being the major shareholders. So, that’s going to change for us, but to carry on growing we need external funding to keep pushing on.

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

Read Time: 3 minutes

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?