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Lufthansa CIO Dr Roland Schütz describes the airline's digital transformation

Thomas Macaulay | April 4, 2017
The CIO of the largest aviation group in the world explains how he uses technology to unlocked new revenue streams.

Schütz divides Lufthansa's digital transformation into three separate clusters: digitising its core through automisation and the streamlining of processes, enhancing its products with digitised features such as in-flight entertainment, and finding new business models for the airline to exploit.

The company is finding new revenue streams by acting as what Schütz calls an "Amazon in the air", offering services and products at 40,000 feet. Lufthansa now provides internet connectivity on both long and short-haul flights.

"The value of having a connected passenger in the air cannot be overestimated," says Schütz. "Imagine you are sitting there, you are bored, you are fixed to your seat, you are reasonably rich and since you are personally known, somebody can sell things to you based on your profile and based on your behaviour.

"It's even beyond Amazon. You can not only entertain the passenger, you can sell to them; you can give them discounts until the landing or you can provide some stuff they take home when they have landed.

"The seat in the air is one of the few remaining white spots on the merchandising landscape, and I think that it's important that we find business models for how we can monetise these hours up in the air to the mutual benefit of our customers and third parties involved."

Keeping customers can be more difficult once they're back on the ground.  Lufthansa does this by embracing the consumer technology its customers are most comfortable with through innovations such as a chatbot created for the Facebook Messenger platform called Mildred who helps passengers find cheap flights.

"We have to enter the comfort zone of the customer in the future," says Schütz. "I think that's the way in the future we have to approach our customers, not only hoping that they approach us, but that we get in all the channels our passengers or potential customers are in.

"Of course we have different groups of customers and age groups and budget fliers and premium flyers, and all of these of course need the individual approach."

 

Mobility and cultural change

The adaptation to developments in human behaviour also extends to Lufthansa staff. Changing working environments and increasing professional mobility requires a supportive infrastructure that may have only limited measurable business benefits.

"You have to develop your infrastructure. It's eating up enormous amounts of money but it cannot be directly linked to top-line effects," says Schütz.

"This modernisation of the overall infrastructure in terms of mobile and cloud computing which is expected by the modern workforce, by the millennials, that's something which is really challenging us.

"We are especially impacted because we do have a globally mobile workforce. Most of our crews are continuously travelling, and so of course we've already reached the state where we've got way more mobile devices, smartpads, iPhone and stuff like that than standard office communication.

 

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