Despite multiple challenges from rising fuel costs, economic uncertainty, trade tensions and, above all, climate change, the airline industry is forecast to double passenger numbers over the next 20 years.
Against this background, the future belongs to those who can leverage the latest digital technologies to push the boundaries of innovation in all areas of their operations. No part of the business can be off limits.
Like airlines around the world, Scandinavian Airlines (SAS) faces the twin challenges of becoming more sustainable while meeting ever-rising customer expectations.
SAS President and CEO Rickard Gustafson is clear about the responsibility that rests on his shoulders. “Aviation truly matters,” he says. “It enables people to connect, it enables people to meet and be inspired by each other. We need to ensure that the next generation can travel as much as we can, but they need to do it in a more sustainable way. And it’s our job to make that happen.”
For SAS, the region’s biggest airline group, the answer lies in technology-enabled innovation. Gustafson says: “Right now, I believe the biggest challenge is we can quickly transform our business towards a more sustainable future.
“Beside huge investment in aircraft, technology is the largest single investment for us in order to ensure that we continue to innovate. To stay ahead of the competition, we have to completely digitize all parts of our organization.”
“This has not only increased our sales but also improved our customer satisfaction,” says SAS Vice-President and CIO Mattias Forsberg. “We are now using AI to automate all different kinds of processes in SAS, for example to improve customer service and reduce response time for customer queries.”
To drive innovation, the airline has set up SAS Labs in collaboration with Tata Consultancy Services (TCS). The first fruits of the project include the chatbot Turi, a digital companion that’s available to help passengers from before their journey to when they reach their destination and pick up their bags.
Other recent innovations include a personal baggage tag, linked to Turi, which allows travellers to speed through a self-service airport bag drop. And the team are working on aircrew apps to help pilots plan their lives around crew rosters.
Massimo Pascotto, SAS Head of Innovation, says it’s important that SAS Labs remains small, lean and agile. “We know that innovation is about impact, so we want to prototype, as fast as possible, experiences for travellers to make their lives easier.”
SAS and TCS have worked together since 2012. Forsberg says their first collaboration was a Cloud-based finance and accounting platform that was rolled out across the 55 countries in which SAS operates. As well as increasing productivity and compliance, the new platform generated savings of up to 40%.
A rapid turnaround
SAS’s fleet of 160 airliners serve 125 destinations carrying more than 30 million passengers a year. A strong financial performance in recent years has allowed the airline to invest heavily in new sustainable aircraft, such as the highly fuel-efficient A320neo and the long-range A350, deliveries of which began in 2019. It marks a transition to SAS as a modern, innovative airline ready to disrupt its markets.
Last year, SAS entered into a joint initiative with Airbus to develop hybrid and electric airliners. It’s all part of its plan to steer a course towards its goal of sustainable, attractive, safe, smooth and modern travel for its customers.
With the help of its new fleet, SAS plans to cut CO2 emissions by a quarter by 2030 and to halve them by 2050. And it wants to switch all its aircraft to biofuel and to cut noise levels from its operations by 50% by 2030.
As Gustafson says: “Without aviation, we wouldn’t have the society that we all enjoy today. Through aviation, people can meet, people can get inspired and explore the world. And corporates can have access to their global customers in an efficient way. We need to continue on that path.”
“It has been a fascinating change journey with SAS,” says TCS Europe CEO Amit Bajaj. “It’s been built around TCS’ Business 4.0 framework, helping SAS move from an airline brand to a lifestyle brand and a digital-first airline.”