Airlines can't justify ROI for mobile apps

Airlines can't justify ROI for mobile apps

Summary: Travellers are increasingly using their mobile devices to book, plan and pay for trips, but airlines worldwide are having trouble justifying mobile initiatives to their finance department, according to a report released by travel technology provider Amadeus.

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TOPICS: Travel Tech
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Travellers are increasingly using their mobile devices to book, plan and pay for trips, but airlines worldwide are having trouble justifying mobile initiatives to their finance department, according to a report released by travel technology provider Amadeus.

Smartphone infographic

The way that travellers use their mobile devices, and how it will evolve in the future.
(Credit: Amadeus)

The report, "The always-connected traveller: how mobile will transform the future of air travel" (PDF), written by Travel Tech Consulting president Norm Rose, and commissioned by Amadeus, assessed current airline and mobile technology, as well as upcoming mobile devices and possible uses in the next two to five years.

"Over 73 per cent of the world's population — which equates to 5 billion people — carry a mobile device of some form. And so, essentially, airlines need to work out how to effectively monetise the mobile channel ... crucially, they must also keep pace with ever-changing passenger expectations," said Rose.

With 50 per cent of smartphone users making some sort of purchase from their device, according to research firm eDigitalResearch, it would be an area that airlines would not want to miss out on. However, according to Amadeus' report, not many airlines have been able to justify a mobile investment to "traditional 'bean counters'".

The revenue that airlines could be making, but aren't, lies in the area of ancillary sales such as hotels, car rentals and activities, according to the report. Having mobile purchase avenues would encourage impulse purchases, it said.

"Mobile commerce is all about allowing the consumer to buy what they want, when they want it, on any device," said the report. "Triggering impulse buying should be a part of all airlines' mobile strategy."

However, some airlines have justified their investments by pointing out that mobile applications would reduce staff with self-service options such as mobile check-in, which would also lead to removing kiosks and saving on hardware, and make better use of staff's time by focusing on passengers who are not able to check-in via their mobile device, according to the report.

Airlines currently use mobile check-in, 2D barcode boarding passes and itinerary management. Some airlines have also added mobile booking capability, and use SMS to inform passengers of changes in their flight plans.

Topic: Travel Tech

Irene Mickaiel

About Irene Mickaiel

Irene is product manager in Australia for CBS Interactive sites such as CNET Australia, GameSpot, TV.com, ZDNet and TechRepublic. Before Irene became hooked on IT media, she worked on illustrated reference, lifestyle and education books.

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  • Am I the only one who finds those stats a little unbelievable. 75% of the entire world population use wireless services? Yeah, right.
    xBeanie
    • Maybe they mean the 'equivalent' of 75% of the world population. Many people have multiple wireless devices. Does a basic mobile phone service count as a 'wireless subscription'?
      scotton1