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Airline Executives Address Data Fragmentation, AI, and Consumer Behavior

Airline Executives Address Data Fragmentation, AI, and Consumer Behavior
The aviation industry has long integrated machine learning and artificial intelligence (AI) into various operational areas, including dynamic pricing and predictive maintenance. As AI technologies advance rapidly, airline executives are now turning their attention to the transformative potential of AI in customer service, marketing, and retail.
AI in Customer Service and Retail Transformation
At Phocuswright Europe 2025, Olaf Backofen, head of global retail partnerships for Lufthansa Group, discussed a recent pilot project involving the AI assistant Swifty in collaboration with SWISS. This initiative offered travelers a conversational booking experience. Although market research indicated that the majority of customers still prefer traditional booking methods, younger demographics, particularly Generation Z, are showing increasing openness to conversational AI interfaces.
Filip Filipov, chief operating officer at AI specialist OAG, joined Backofen in emphasizing the critical need for enhanced collaboration and data sharing across the aviation sector to fully harness AI’s capabilities. Filipov remarked that this period marks a significant shift, with airlines and related industry players beginning to connect disparate data points across the customer and traveler journey.
Challenges of Data Fragmentation and Legacy Systems
Despite the enthusiasm surrounding AI, both executives acknowledged persistent challenges, notably data fragmentation and outdated legacy systems. Fragmented data complicates the integration of real-time insights into consumer behavior, demand fluctuations, and competitor pricing—elements essential for effective AI-driven marketing strategies. While some airlines have successfully employed AI for targeted advertising and personalized offers, others continue to grapple with privacy concerns and the technical difficulties of consolidating diverse data sources.
Backofen underscored the necessity of developing a unified booking system comparable to the seamless experiences provided by leading e-commerce platforms. He explained, “We need to have one database, which enables us to have in one passenger name record the possibility to buy tickets, ancillaries, and everything else. But it will take four to five years until we have this in place.”
Industry Trends and Consumer Behavior
The discussion also highlighted broader industry trends, including the exploration of new retail channels such as social media platforms for selling tickets and ancillary products. Competitors are increasingly adopting AI tools to enhance both customer service and operational efficiency.
Shifts in consumer behavior continue to influence airline strategies. Market responses to AI-driven initiatives vary widely; some brands have successfully implemented targeted campaigns, while others face challenges balancing personalization with privacy concerns. In markets like Canada, limited competition among discount carriers has resulted in higher fares, prompting calls for increased foreign competition to reduce prices—an issue that AI and data integration alone cannot resolve.
As the aviation sector confronts these complexities, executives concur that addressing data fragmentation and embracing AI-driven innovation will be essential to meeting evolving consumer expectations and sustaining competitiveness in a rapidly changing environment.

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