Category: Blog

Has covid permanently affected airlines? 

It is a very scary question and one that will not be answered completely for a few years. In the short term as countries enact their vaccination programs and enable their economies to open there will be a “sugar high” for domestic leisure and even some business air travel. Many believe that we will recover by 2024, but will air travel in 2024 get back to 2019 levels? 

We, business people, are far more optimistic than pessimistic. We all believed that travel in 2022 would be closer to 2019 levels than 2020. However, that has not been the case. International travel will be delayed in getting back to “normal” and many countries like Japan, due to covid variants, will be struggling over the next year. 

There are several other factors that airlines will be facing over the next few years. 

The first is the debt levels. Many of the airlines are burdened with a debt load that will substantially affect new investments and innovations. According to McKinsey, debt could be as large as $1.1 trillion by 2024. Another factor will be future government regulation. If governments make it too onerous to travel, many travelers will choose other options. Moreover, are travelers fearful of traveling on planes, for fears of new infections? As we have seen here in the United States there have been many instances of “issues” on flights around the requirement for masks.  

We have seen that in many of the countries doing better with the pandemic, there has been a bounce-back in air travel. That has certainly been the case with leisure travel but will it also be the case with business travelers? Airlines are hoping that there will soon be widespread fatigue with video conferencing. Again, there is fatigue, and we will see a tremendous rebound domestically for business travel. Will 2024 snap back to 2019 levels? – That question will remain open. Many companies will get their teams on the road to see their customers and prospects in person, but many organizations will not likely go back to 100% business travel, since it means adding far more to the cost of sales. 

Not all is negative, as there are tailwinds for us all to get out there and see the world again. Delta just announced a profit, the first since the pandemic started, and saw a rebound in business travel as well. As airlines get their planes back in the air, there is a fantastic opportunity that has resulted from the pandemic. The remarkable growth in e-commerce, as a result of the pandemic, has created an astonishing opportunity for airlines to generate additional revenue with low investment and tremendous ROI. By utilizing the belly space for e-commerce packages, airlines have a new way to grow revenues, be innovative and reduce debt through e-commerce package shipping.

There are many open questions as the airline industry deals with the pandemic. And not many of us believe it will be like it was in 2019 soon. Hope always springs eternal but we business people not only need to be optimistic but data-driven. Changes are coming, and with any change comes opportunities. It will be the airlines that are adaptable to change that will thrive and survive.  

The term “catalyst” is thrown around in business almost as much as “transformation.” In case you forgot from early chemistry classes, a catalyst is “an agent that provokes or speeds significant change or action.” Now, I know what you are going to say; the pandemic has been something of a catalyst for the Airline cargo industry. Well, actually, it simply sped up the global growth of e-commerce. As a result, e-commerce grew across all regions of the globe at over 20% last year and looks like there is no going back.

E-commerce growth has become a catalyst for growth and transformation, and those airlines that embrace this opportunity will flourish. That sounds like a hyperbolic statement but it may hold the truth that is key to the world’s airlines over the next 5 years. Global e-commerce is projected to grow 28% over the next three years from $5 trillion to $6.4 trillion by 2024. That sounds like a market that should get airlines’ attention. What is even more amazing is that most of the e-commerce packages are 2 kilos-to-4 kilos and can sit easily in existing belly space on airlines, regardless of size or aircraft type. While many organizations fail at transformations, a focus on e-commerce can address many of the issues that often lead to failure in business transformations. 

According to a McKinsey article about why so many transformations fail, there are 10 common weaknesses that emerge as culprits that hinder success. Now, I do not want to address all of them here, but utilizing e-commerce as your catalyst for change can be an easy antidote to transformation failure. All 10 are important to address, but if we look at a few of them you can see how airlines focusing on e-commerce are changing their company and generating a robust new source of revenue. 

The first and most important of these skills is alignment. Focusing on e-commerce forces alignment throughout your organization as well as in relationships with ground crews and logistics partners. Skill sets are another issue that often arises because workers do not have the new skills that are often required for transformative ways of doing things. This is an overriding reason to use a company that has the developed skills and experience required to build new processes and practices that create success, working alongside your teams. At SmartKargo, not only are we a complete e-commerce logistics platform but also have dedicated subject matter experts in all facets of e-commerce logistics. Finally, focusing on growth is key to being successful. There are tremendous growth opportunities globally for e-commerce as stated earlier. Moreover, many e-commerce sellers are competing with Amazon, at the glass. The option of using Amazon fulfillment services (FBA) to achieve speedy shipping of their products does not sit well with them. These shippers are looking for good alternatives that will differentiate their brand.     

For an airline looking to kick-start a transformation and kindle more revenue, e-commerce can provide an easy start, with a partner like SmartKargo. By providing a platform and expertise for change, your airline can connect with the e-commerce ecosystem. Your airline provides the differentiation needed for e-commerce companies to compete with Amazon. And it indisputably aligns your organization and the KPIs to meet aggressive revenue projections. In the process, airlines create a robust new revenue engine that can efficiently transform their organization. Many airlines are using this catalyst now to drive new revenue. After taking off on the e-commerce journey, they find that delivering on the promise of new revenues can happen quickly.

Great technology, Air Cargo, and logistics have been my business passion for some time. Trade is a phenomenal business and is the economic bedrock of the global economy. And I must say that the air cargo industry outdid itself over the past 2 years. And the Air Cargo market is estimated to be a $145.2 billion industry by 2027. But that being said, one should always assess the market they are in as well as future growth trends.

Currently, the Air cargo market has some fascinating stats. According to IATA, approximately 100,000 planes take off, 20 million parcels are sent, and $18.6 billion in cargo shipped within 24 hours period. The multiplier effect of air cargo is undeniable. The ecosystem for air cargo includes governments, freight forwarders, ground handling, technology firms, mechanics, security and so many others.  The estimate from IATA is that there are over 68 million people employed to support the aviation industry worldwide.

We understand that the covid pandemic nearly destroyed passenger airline travel over the past year and a half. We all know the reason why, but this prompted many airlines to shift more emphasis to their cargo business— converting passenger jets to cargo-only transportation to ensure revenue was being generated. Many airlines large and small have taken advantage of this trend. Additionally, the impact can be seen by the expansion of many airports to ensure more cargo capacity. In cities like Chicago, Philadelphia, Pittsburgh and so many others, airports are working to be sure they are ready to accommodate more cargo. Recently, Santo Domingo Airport in Latin America broke a monthly cargo record—and there will be even more airports setting new records. The local communities are aware of the multiplier effect that the air cargo industry provides their geographic area.

Then there is the simple proof of how so many of the airlines across the globe used their airlines and logistics expertise to support the people within their various markets. Many of the world’s airlines, including most of our customers, delivered vaccines to many, many people in local, regional, and international markets—a huge impact on restoring economic activity.

Air cargo is poised for great opportunities. The market is expanding and this is impacting the world. Given the tremendous growth in e-commerce globally, intersecting with the growth in air freight, there is no reason why air cargo cannot far exceed its current economic impact. This is especially true when you see the growth in customer expectations and demand for next-day package delivery. Air cargo is an exceptional, growing part of the overall global economy and a great place to have a career.

Wrap and Extend to Capture Critical E-Commerce Revenue

Airlines have faced some of their most challenging quarters in decades due to the global pandemic. According to ICAO, 2020 gross airline revenue fell close to $400 billion. Yet, one industry has proven to be relatively insulated from deep losses during the pandemic: e-commerce. As more and more people looked to online solutions during the pandemic, revenue shifted from retail to e-commerce worldwide. Before the pandemic, e-commerce accounted for 14% of all retail sales; however, in 2020, that number jumped to 17%. Experts anticipate that this trend will continue. Global e-commerce is projected to grow 28% over the next three years from $5 trillion to $6.4 trillion by 2024.

This surge in e-commerce will allow airlines to expand their cargo transport capabilities and grow revenue, even if passenger levels remain below the peak. E-commerce packages, usually averaging 1-10 kilos in weight, are a perfect fit for an airline’s domestic fleet. Plus, with passengers carrying less baggage due to baggage fees, more belly space is generally available today for additional cargo. These two realities, coupled with the fact that typical passenger planes only fly with about 50% of their cargo capacity utilized on any given flight, means that revenue opportunities exist and are optimized through SmartKargo’s seamless solution.

SmartKargo’s flexible and cost-effective cloud-based platform allows airlines to “wrap and extend” their current cargo solution in a turnkey fashion and start building additional revenue streams in as little as a few months—not years. Airlines in Brazil, Canada, Mexico, and Norway are early adopters of SmartKargo’s wrap and extend methodology.

This flexible approach allows airlines to “wrap” the e-commerce solution around legacy air cargo systems without starting from scratch. This innovative approach will enable airlines to add this rapidly growing e-commerce business within months, not years, as it has taken with others in the industry. In addition, SmartKargo facilitates revenue capture quickly and easily.

One of the key benefits of their solution is that implementation is seamless with existing legacy systems. SmartKargo deploys a team of the seasoned airline, technology, and e-commerce experts to integrate the method and establish business processes alongside the airline cargo team. This low-cost investment has proven to yield significant results for their customer base, mainly because airlines do not have to “rip and replace” existing legacy systems. Because SmartKargo can essentially take what airlines have in place and extend their cargo e-commerce capabilities, airlines have increased revenue from the first day of implementation.

SmartKargo supports air-to-air and door-to-door businesses with easy integration into e-commerce sites. One of SmartKargo’s key differentiators is its deep knowledge of e-commerce vendors and e-commerce logistics. Their solution, using existing APIs and EDI-enabled e-commerce technology, is disrupting the traditional air cargo business.

 

In today’s digital world, innovation is a key trait that great companies possess. Whether you’re talking about Google, Amazon, Alibaba or so many others, their ability to continually innovate and expand their vision is paramount to their success. Innovation used to be driven by necessity, with necessity being the proverbial mother of invention. We innovated to make life easier on us (washing machines) or make things easier to build (steam cranes), safer (electric lights), more efficient; and you can easily name a dozen of others. But as the digital age came upon us our innovation was guided by new principles and a series of questions, including “WHY and WHY NOT”.

Today’s innovation uses technology to challenge existing norms and markets on a variety of levels. Many of the people in those markets initially believed their status quo was safe and things would never change. For instance, whoever thought something like ride-sharing would arise to be competitive to Taxis? But now, Uber dominates in many cities and has now extended into food delivery. Uber has recently announced it will expand into the delivery of “just about everything” in an attempt to disrupt Amazon at the local level1. These mega-successful market disruptions by Uber have been enabled by technology. Uber is now one of the top 250 most valuable companies by market cap in the world. And there are so many others, namely Tesla, Amazon, Apple, etc. All have changed their markets and what it means to compete.

The keyword is disruption. And today, companies must disrupt themselves or be disrupted by someone else. Where necessity is often the catalyst for innovation, disruption, or “why not” thinking are now keys to innovation. Organizations must think critically, learning to challenge their perceptions and accepted norms as concrete. And many organizations make this mistake concerning highly regulated environments. PayPal disrupted the regulated payments market, Sofi and Robin Hood challenged investments and in the United States, even the highly regulated Healthcare industry has been changed with innovative healthcare applications and telehealth.

Air Cargo is also ripe for disruption now. It has long been fairly uninterrupted, safe, and was often an afterthought for many passenger airlines, with about 1%-3% of their revenue coming from cargo. So, why bother? Sound familiar? But now, more than ever, Airlines are looking to grow their revenues, as well as create brand new revenue streams. Our customer Azul has innovated and is now the leading e-commerce logistics company in Brazil, and growing fast. They did not wait for the competition to force their hand and be the catalyst – “why not” was the catalyst.

The expected total sales in e-commerce globally will grow from an estimated $5 trillion sales this year to a projected $6.4 trillion globally in 2024. Therefore, the entire e-Commerce logistics market should be innovating and disrupting. Airlines, 3PLS, 4PLS, freight forwarders, first and last-mile ground delivery companies, as well as warehouse operators, must innovate to gain access to the fast-growing and very profitable e-commerce logistics market. There’s a bigger piece of the pie for Airlines now if they choose to disrupt and own more parts of the e-commerce logistics market than they had before. Yet many airlines are afraid to disrupt the longstanding ecosystem. My question then is, do you still want to own a taxi in New York City?

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I needed to change my weight, like many of us, the pandemic caused me to become a little sedentary and gained some weight. So, I wanted to motivate myself and went looking for a great quote to put on my phone and screensaver – I found so many about change. But it got me thinking, airlines are currently experiencing an evolutionary moment in dealing with ballooning debt, loss of business passengers, and increased competition, even as leisure travel passengers are starting to return. Airlines are facing a time of intense change – but change is hard. With this in mind, I went with Socrates for my quote, “The secret of change is to focus all of your energy not on fighting the old, but on building the new.”

Airlines are at one of those points in the business where they can choose to embrace change or simply go back to the way things were in 2019. As countries open up and competition will heat up, airlines that are lean and innovative will thrive. In a recent article in the Wall Street Journal, there could be as many as 90 new airlines launching in 2021. Debt levels are at some of the highest levels ever for existing airlines and will be a drag on investment and innovation. Potential loss of future business travelers is evident, as companies and corporations adopt video collaboration tools for meetings and personal selling, successfully. With these factors affecting airlines, it is a perfect time to think about changing your organization by driving new revenue opportunities.

Some airlines are beginning to change by hiring different types of employees with different skill sets. In one of our previous blogs, we spoke about a new type of executive, who sees e-commerce cargo as a tremendous opportunity. New perspectives drive innovative ideas and new revenue streams. But these kinds of changes take commitments from the top and continuous communication throughout the organization.  As an example, Azul airlines have moved toward a complete commitment to the e-commerce logistics market over the past few years. The whole company has been committed to driving change and realizing this additional revenue source as part of its business model. The results have been phenomenal, and Azul continues to be one of the most successful cargo logistics companies in Brazil.

Change is hard. I’ve only lost 3 LBs, but change for airlines is hard as well. Airlines need to think about what they can evolve in their business models. Technology is not a panacea but it is a great vehicle to drive change, adapt to new cloud technologies, and let more new employees step up. As airlines begin to get back to serving global markets, post covid, they will also need to innovate. Airlines will need to innovate to drive more revenue to service the debt, compete with new airlines, and make up for less business travel. The essential focus must be on the change needed to thrive going forward and will also require letting go of what worked for us in the past, as in the old, “Socrates was a smart man.”

Let’s face it, Air Cargo has been an afterthought for many passenger airlines. With a focus on passenger traffic which brought in the lion’s share of revenues, resources were understandably concentrated on passenger operations and its corresponding revenue. While a few carriers may not derive any revenue from cargo, those that do have generally contributed only 4% to 5% of total revenues, at best, in a given year. However, the world was hit with the pandemic and things are changing.

As the pandemic caused a precipitous drop in passenger revenue, and the almost simultaneous demand for cargo capacity emerged to move urgent medical supplies and other goods around the world. With the world in lockdown, people also became more dependent on e-commerce for delivery of the things they needed to their door. Consumer demand for e-commerce plus new technology that empowers airlines to operate integrated logistics means the airline’s Cargo business can contribute a double-digit piece of the pie.

In the case of Azul Brazilian Airlines, it was unheard of 32% of total airline revenues after the adoption of the SmartKargo e-commerce solution. Carrying e-commerce cargo can be very profitable and airline executives are beginning to see the large revenue potential.

In today’s environment, airlines are scrambling to make sense of this shift and have begun to bring in a new breed of executives to lead their cargo teams. These leaders are disruptors. They are technologically savvy and have a vision of competing for the surge in capacity demand resulting from the growth of global e-commerce. The e-commerce retailers that shipped their packages via postal services now have better alternatives, and these executives are taking advantage of this opportunity. They are creating strategies to create more revenue from the biggest asset their companies have invested in – an airplane! In doing so, they are bringing in much-needed revenue for their companies while facilitating the airline industry in overcoming one of the toughest economic challenges they have likely ever faced. And they are making a substantial difference.

Understanding the promise of e-commerce for a passenger airline translates into incremental, profitable, and immediate revenue that can make a difference to any airline, as it weathers the current crisis and strives to bring in more revenue in the future.

The last year has seen the acceleration of e-commerce and the belief that we do not expect the in-store or terrestrial shopping experience to go back to the way it was in 2019. Regardless, e-commerce has grown much faster than expected and e-commerce globally will grow from an estimated $5 trillion sales this year to a projected $6.4 trillion in 2024.

In many ways, the e-commerce space is the story of the API economy. The integration of systems for content, catalogs, Martech, CRM, e-commerce platforms and so many other systems are paramount for hitting the $5 trillion target this year and in the future. The main purpose of all the integrations is to provide the greatest customer experience, one that puts the best product(s), at the right price, at the right time, for the customer to purchase.

Now, why bring all this up at a company like SmartKargo? Easy, in the logistics part of the e-commerce customer experience, it’s no different – API and EDI are paramount. And they are just as important to the customer experience and the brand promise to the customer. A logistics solution to a logistics e-commerce solution must connect airlines, warehouses, ground crews, freight forwarders, delivery vehicles, and of course, customers. All of these connections need to utilize EDI or APIs and must integrate into an easy-to-use platform for fast and flexible implementation and adaptability.

Does it matter if they are integrated? You know the answer, of course, it does. The integration provides real-time information to your partners, employees, regulatory bodies, and most importantly your customers. Our partner, Azul airlines, has implemented our solution in conjunction with their overall strategic focus. With their attention on building a long-term cargo solution focused on the high growth e-commerce market, they were able to increase revenue by 65.9% year over year.1 This helped in adding significant revenue to their top line, even with the pandemic. Azul is a disruptor in the Brazilian market and is now one of the biggest e-commerce logistics companies in Latin America. And the integrations empower an airline with the capabilities to expand their business and disrupt their normal course of business—with little upfront investment.

The interoperability of the e-commerce ecosystem is made possible by EDI and APIs. They are often the unsung components, but with an overriding need. These integrations make it possible to message within your full ecosystem, your partners all along the chain to drive revenue. The real-time insights that the end customer now expects are only made possible with an integrated system, which makes all e-commerce possible and the end customer happy.

It’s been a tough year for airlines – and that’s an understatement. CFOs are in the middle of the madness. Whether it is getting loans, working with local and federal governments, looking ahead to 2022, raising capital, or diving strategic decisions with their executive team, CFOs are busy. The lack of planes in the air has caused revenue shortages that have directly impacted CFO decisions. Air cargo is a great way to bridge the revenue gap, drive more revenue in the near term while diversifying revenue streams for the future.

All airline CFOs model for risks, for all kinds of scenarios from terrorist attacks to major market issues. But no one was ready for 2020 and the pandemic. All risk modeling essentially failed to help the CFO manage the crisis. The biggest issue faced was with the long-term assets of the plane and the lack of cash flow needed to keep the company afloat. Gerald Laderman, the CFO of United, said “Before COVID, we modeled our worst-case scenarios based on the financial impact of 9/11, followed by a recession,” – “It turns out we weren’t even close.”[1] In other words, the epidemic was far worse than any company or any airline analyst could ever have predicted.

Passenger airlines saw their passenger yields cave and the CFO had to do what is necessary to survive. But the airlines that chose to maximize cargo, especially e-commerce cargo as an additional revenue stream, did far better during the pandemic. Some airlines pivoted toward cargo to drive revenue. United and American grew their cargo revenues by 77% and 32% respectively.[2] Now, the expected total sales in e-commerce globally will grow from an estimated $5 trillion sales globally this year to a projected $6.4 trillion in 2024.

Many airlines even converted passenger planes to cargo planes to generate replacement revenue. A great example of this is Emirates. They converted 10 Boeing 777-300ER planes to all-cargo airplanes.[3] Companies like Emirates employ a nimble business model that allows them to take advantage of whatever market conditions may present both the passenger and cargo business. This flexibility is what CFOs should be advocating for in the future.

Airlines need to have a model that takes full advantage of their fixed assets, given a wide variety of risks, and market scenarios. This, unfortunately, must include the next pandemic. CFOs should be able to take advantage of the tremendous growth in e-commerce shipping and delivery to ensure revenue capabilities. Whether it’s cargo utilizing excess belly capacity on passenger airlines or all-cargo flights, the business drives yields and overall margin that can help to ensure revenues and drive sustained growth.

The e-commerce ecosystem is massive and growing. The expected total sales in e-commerce globally will grow from an estimated $5 trillion sales globally this year to a projected $6.4 trillion in 2024. The ecosystem is vast and is comprised of services, MarTech, AdTech, e-commerce systems, shipping and logistics, payments, communications and so many other factors that support the system. And, as the issue in the Suez Canal recently demonstrated, Air Cargo may be more important to the global supply chain than you first considered.

Most e-commerce retailers are striving to keep up with Amazon and they all want to be customer-focused. Being customer-focused means maniacal attention to customer needs and responding to their desires. When taking shipping into account, there are differences in what e-commerce customers will pay for with respect to shipping, but all customers want their “packages” fast.

Now, what do we mean by fast? Anything delivered in 2 days or less is considered fast. Moreover, Gen Z, on track to be the largest consumer base by 2026, and Millennials, who are the largest consumer base today, are willing to pay more for next-day shipping. In fact, recent studies by both PwC and Accenture show that higher prices for next-day delivery would drive a decision to make a purchase.

Now, it should be very evident that Air Cargo is the best, and in many cases, the only option for getting packages to the customer in 2 days or less. Cargo ships are the cheapest, and slowest, mode of cargo transport (and in many cases the right option). Air Cargo may be more expensive, but if an e-commerce company has based the fulfillment of their brand promise on fast delivery—then Air Cargo is key to their success.

As more and more e-commerce companies adopt faster package delivery to meet customer expectations and drive repeat purchases, there will be greater demand for Air Cargo. Air Cargo can be executed by all-cargo carriers like UPS, FedEx, and DHL who also rely on the belly capacity of passenger airlines. Azul is a great example of an airline that embraced e-commerce growth by implementing the technology to operate fully integrated logistics. Thus, meeting the demand for e-commerce shipping while optimizing the utilization of the entire fleet.

Customer expectations will only become more demanding, and the need for flexibility and speed by e-commerce companies to get packages from the shopping site to the customers’ door is paramount to their success. Air Cargo may just be the engine that drives e-commerce by facilitating this need for speed that customers demand.

It is redundant to say that 2020 was a difficult year.  And 2021, we all know, is on the upswing.  Many of us believe that 2022 will be a complete reversion to “normal.”  I do believe on a personal level we will start to go back to normal vacations, dining out, movies, concerts and etc. Humans are social and we crave to be a part of a group and shared experiences.  However, the business traveler will not be coming back at anywhere near the previous level—meaning that airlines will need to fill the revenue gap to meet their financial projections.

If we look at the work from home movement, it has changed the way we sell, service, and interact with our peers.  Moreover, it has shown that there is no need to always be in the office and no need to always travel to meet peers, prospects, or customers. The growth in applications that use camera applications has grown tremendously, for instance, Microsoft Teams grew from “44 million active users in March to 75 million by April.”[1]  Additionally, Zoom has also experienced tremendous growth of in December 2019 they had 10 million daily users compared to today there are about 300 million daily users.[2]  Another factor pointing to the “Work from Home movement”, is during 2020 computer sales grew 11% globally, 14% in the United States, most of these were laptops suggesting these were bought in further support of working from home.[3]  All of these factors point to a change in the way business is done.

We all know the huge impact to the airlines from Covid in 2020 and 2021  In 2020, airline traffic was down 67% compared to 2019.[4]  Moreover, some experts do not think all passenger airlines will recover until 2024 or 2025.[5]  Now business traffic is about 12% of total traffic but historically has brought in double the revenue of other types of air travelers.[6]  All of that that revenue will not be coming back – business air travelers will use applications to make deals, collaborate and build relationships online.  We will certainly see the return of some business travel.  I agree with Bill Gates that only about 50% of business travel will return.[7]  If there is a 50% reduction, many airlines are going to be searching for new revenue or face permanent cuts and write-offs.

Airlines can drive more revenue by embracing the growth in e-commerce shipping. Reduced capacity of passenger airlines is an opportunity to ship cargo and drive easy alternative revenue, which will help to fill the hole in passenger revenue.  Moreover, it can be a stop-gap measure for additional revenue until leisure travelers are back in 2024 and beyond.  Whether Airlines are doing it on their own or using a leading platform like SmartKargo, there is tremendous revenue to be made from creating a balanced revenue stream for any airline.

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[1] https://www.businessofapps.com/data/microsoft-teams-statistics/

[2] https://www.techrepublic.com/ /watch-out-zoom- article microsoft-teams-now-has-more-than-115-million-daily-users/#:~:text=Zoom%20and%20Google%20Meet%20have,logging%20into%20meetings%20every%20day.

[3] https://qz.com/1881730/us-computer-sales-spiked-67-percent-after-switch-to-remote-work/

[4] https://www.cnbc.com/2021/01/04/21-years-of-airline-passenger-traffic-growth-erased-in-2020-travel-report.html

[5] https://www.cnbc.com/2021/01/04/21-years-of-airline-passenger-traffic-growth-erased-in-2020-travel-report.html

[6] https://4-seasonslimos.com/travel-tips/what-percentage-of-air-travel-is-for-business/

[7] https://www.cnbc.com/2020/12/17/will-business-travel-return-with-covid-vaccine-executives-are-split.html

WHAT DOES IT TAKE TO GET INTO THE GAME?

 

The huge growth of e-commerce logistics is causing many airlines to rethink their business models and make the adjustments needed to meet skyrocketing market opportunity. There’s never been a better time to open new streams of revenue on both long-haul and domestic flights, especially as airline passenger revenues are down, way down.

eCommerce cargo shipments pay big dividends in higher yields per kilogram vs general cargo—and, all of this is driven by the need for speed in transport and delivery—from the shopping site to the customer’s door.

Here are 5 things you should know:

1. Airplanes are the most important assets in cross-border e-Commerce.
More than ever, e-Commerce shipping relies on the speed and capacity that global airlines can provide and that consumers demand. Airlines have both the fleet capacity and speed capability to meet the huge, and growing, demand of e-commerce logistics.

2. Fully integrated logistics is driven by smart integrations.
By connecting your Airline Assets + Technology + Ground partners, you can deliver higher revenues to the airline bottom line. The SmartKargo e-commerce solution can be integrated into the existing technology environment of an airline. Our team facilitates the EDI-messaging integrations with all members in the logistics chain.

3. Smart technology + mobile applications automate the process.
The end-to-end EDI-enabled B2B and B2C e-Commerce integration combines with real-time data visibility and transparency via mobile applications for the shipper, driver and end customer, all the way from the shopping site to the door.

4. The solution is live and producing great results.
One of the first airlines to adopt the SmartKargo e-Commerce solution has announced amazing revenue growth. Its current market share of 60% in e-commerce logistics vs. the integrators in that country illustrates that the SmartKargo technology and process for e-commerce logistics are proven. The solution is now being adopted by other forward-looking carriers across the world.

5. The technology can be deployed quickly.
The SmartKargo e-commerce solution can be up and running in less than a year—equipping an airline to get into the game – where consumer demand for speed in delivery drives higher revenue and premium yields. And airlines can operate e-commerce alongside their traditional B2B Air Cargo business.

So, why wait? Contact us today to learn how smart airlines are maximizing air cargo revenues with the world’s first, live e-commerce integration. For more information or to set up a demo, contact sales@smartkargo.com or visit www.smartkargo.com.

Learn more

Forbes Article

On-demand Flight Global Webinar

With robust markets and booming e-commerce, air cargo should be poised for spectacular growth in 2018. Right? Well, not so fast.

Ironically, right at a time when markets are more ready than ever for air cargo service, there is a serious disconnect with the future. To be fair, Air Cargo is already a global driver of world trade; 35% of total trade by value, representing close to $7 Trillion worth of goods being transported around the world by air. That’s a very big pie, much of which is owned by the integrators, as we know. So why the snag? In a word, technology.

While so many segments of the Logistics industry are moving at warp speed into technology advances, the air cargo carriers have been surprisingly slow in keeping pace with those sectors. At a time when the airline’s major logistics customers are faced with interfacing with forwarding technologies prescribed by Industry 4.0 protocol, air cargo shows up as the weak link in consummating 21 Century supply chain initiatives.

For example, while our forwarder friends and 3PLs are adopting tech like IoT, drones and more, air cargo is still grappling with delivering the low-hanging fruit of real-time information at every shipment milestone for tracking or real-time capacity decisions that impact the business. And take basic mobility which has become a customer expectation across the board, and especially for our passenger-side counterparts, to drive customer experience and loyalty.

The technology exists, again low-hanging fruit, to deliver mobility from booking to the destination and beyond, from a smartphone. And then there’s using apps on iPads in the warehouse to streamline operations and forward e-AWB paperless initiatives and more. The disconcerting thing is that all of this technology is available and as close as integration via APIs—yet not widely adopted— in spite of concerted efforts by IATA to move the needle toward paperless, e-freight, and more.

So, let’s talk solutions. If embracing the latest and best technology is the answer, this calls for the immediate adoption of transformative technologies like Cloud Computing, Big Data/BI and Mobility that are bringing about positive changes for others in the Cargo Value Chain.

The good news is that with recent innovations, these things can be implemented right now—and in months not years. Since the latest technologies are inherently cloud-based, there is no risk of investing in a lot of proprietary technology that becomes obsolete before it’s even installed. Digital transformation can be achieved at a fraction of cost, resources and critical time to market.

Whether it’s customer empowering moves such as self-service, customer experience and loyalty—or the many stripes of cost savings or other efficiencies that are desired—the fundamental technology is here, now, and easy to implement.

And with these easy, affordable solutions in plain view, perhaps air cargo carriers can think differently—to move more imaginatively—and thus be ready to intersect with the technology advances of our partners in the value-chain when the critical moment arrives. Just imagine.

Want to know more? I invite you to contact us to discuss innovative solutions for achieving Digital Transformation. Our solutions are designed specifically for Airlines competing in Air Cargo arena. We’re on a mission to help you:

• Achieve seamless Horizontal integration with partners and stakeholders across the entire value chain.
• Reach out to shippers and booming E-Commerce markets by providing an “end-to-end” value chain with first and last mile service.
• Continuous innovation and optimization at the core of the traditional Value Chain.

Feel free to contact me directly at olivier@smartkargo.com with any questions you may have.

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Bio

Mr. Olivier Houri is the newest member of the QuantumID Technologies| SmartKargo team, serving as Executive Vice President of Corporate Strategy since May 2017. Prior to joining SmartKargo, he has spent more than 20 years serving the Air Transportation industry, most recently as the President & Global Leader of Unisys Global Travel & Transportation Industry business. Prior to this, he led the Global Air Transport Consulting Practice at Cap Gemini Group and Cap Gemini Ernst & Young.

It has been said that there are often two ways to do things–the easy way and the hard way. And while this principle doesn’t always hold across the board, it does when applied to complex tasks or projects such as migrating from an old legacy system to a new one with leading-edge functionality!. In this case, complexity and resource drain can be managed by choosing the right partner(s). When each partner contributes core expertise in a collaborative spirit, the insight and knowledge base of each combine in synergy–to make the result greater than the sum of its parts. Yes, choosing the right partner can make all the difference between a streamlined process leading to success or one wrought with inefficiencies and delays, or worse.

When SmartKargo was faced with choosing a partner and platform on which to build the SmartKargo solution, we chose Microsoft and its world-class Azure platform. Businesses that select solutions powered by Azure benefit in a number of ways. In addition to cost, the Azure platform has a global network of data centers with high up time and extraordinary performance. And leading-edge global infrastructure is something they are continually investing in, so their customers don’t have to. Mobility, for example, is facilitated through the cloud solution and can be quickly deployed to any device or platform. And the best part is that our customers deploy systems that never become obsolete.

Take the example of infrastructure. Industry leaders like Microsoft have made huge investments—to the tune of $15 billion—to build the world’s leading global cloud infrastructure. Microsoft Azure delivers the exceptionally robust computing power needed by airlines that are not keen to invest capital in hardware and software.

Working together, Microsoft and SmartKargo continue to build a state-of-the-art, industry-leading platform that airlines can deploy in an out-of-the-box or a customized mode. And Microsoft is the only major cloud provider with a full hybrid model.

Using solutions powered by Azure, airlines and businesses in the cargo chain can extend their capabilities from on-premises to the cloud, seamlessly, to meet their particular business needs now and into the future. And perhaps, the greatest benefit is that after the investment in time and resources to get that system up and running–it is never yesterday’s news. Future ready and always integratable using a number of API’s that keep it agile and adaptable.

Our partners at Microsoft are simply the best. Our platform and our business model is inextricably linked with them, and so, they are your partners as well, by extension. Greg Jones is our Seattle-based Account manager and a Microsoft Managing Director of Worldwide Hospitality & Transport. He has summed up their commitment well: “Microsoft’s commitment to security, privacy and control, compliance and transparency, and our investments in this space, are unmatched. Airlines and their partners in the cargo chain choose the Microsoft Cloud because it is open, flexible and has a full spectrum of services that span IaaS, PaaS and SaaS,” he said. In terms of security, Microsoft invests more than $1billion in security research and development each year to provide the most secure cloud platform to customers.” The investment in global infrastructure is an additional $15 Billion!

Whatever you want from your cloud solution is likely obtainable. You can freely integrate the tools you need with the system you already have. And then, you can run virtually any application using your data source, with your operating system, on just about any device. Now that’s a partnership that keeps on giving.