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Lessons for Kenya Airways in the Collapse of Thomas Cook

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It was the world’s oldest travel agency. At one time it was issuing traveller’s cheques and was very trusted. But last week saw the demise of Thomas Cook.

When the news came and more than half a million travellers around the world were stranded, the British government asked the UK Civil Aviation Authority (CAA) to launch a repatriation programme over the next two weeks, from Monday, September 23 to October 6, to bring customers home.

However, the news of Thomas Cook is just but a start of what was to happen that week. According to reliable sources, two smaller operators – Aigle Azur and XL Airways – were before the French bankruptcy courts on Monday.

Turbulence in the skies

The list of failures is building, not to mention Monarch, Air Berlin and Alitalia failed in 2017, then followed by Primera and Cobalt last year and Germania, Flybmi and Iceland’s WOW so far in 2019. Flybe’s sale to a Virgin Atlantic-led consortium has narrowly averted this trend.

The travel industry has been faced by disruption with the internet taking up most of the traffic that would have steered it into profitability. About 50,000 tourists were stranded in Greece alone, mainly on islands, a Greek tourism ministry official told the press.

Such disturbing news from the aviation industry is not uncommon owing to the fact that there is need of right pricing of air transport to make it attractive to the normal holiday maker since they form the bulk of travellers. What Thomas Cook has been competing is not just the internet but instant access of customers to prices and the cost of comparison between competing brands being so low and almost effortless.

As for Kenya, when it comes to legislation to ensure that our national airline does not have to follow the route taken by Thomas Cook, there have been positive developments. According to Michael Joseph, the chairman of Kenya Airways, the government has already adopted a report that is to be turned into legislation to make the airline a semiautonomous company that is run in a commercial way.

Digital technology for airlines

The problem with Thomas Cook is one of failing to adapt to the changing times, which a company is more than 100 years old should do. Today’s customer has almost perfect information and is able to cherry-pick the properties he is to be housed in the destination of choice. Therefore, the internet has been awash with numerous travel sites offering customers more value for money.

According to SITA, the world’s leading air transport IT and communications specialist organisation, any aviation-related body, must enhance the passenger experience through the biometric single token travel. In this system, the face of the customer represents all the travel documents.

Already a form of this technology is being used in the United Arab Emirates among other places. Through the use of such technology, it will be easier for passengers to commute through airports seamlessly while still security being maintained. This way, airports with the best technology will have the edge since more customers will choose to connect through them.

Artificial Intelligence will ensure data owned by airlines is mined and interpreted into revealing customers’ needs.

Mwangi Ngamate

What Thomas Cook found out was that technology has already changed processes on aircraft operations. Digital retail is here to stay and expensive jewel and watch outlets tie in could not translate to revenue like it did in the 1980’s to 90s.

According to SITA there will be a time when one pilot will be operating several aircraft from outside. Through this system it will be easy for parts to be availed in real-time before they break down. Using software it is now predictable to ascertain what the needs are. This will improve aircraft turnaround times, using artificial intelligence and computer vision to capture different underbelly events for better visibility.

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So there is a huge opportunity for digitisation and this will play a big role in the development of other areas like finance, transport and even media. Digitisation will improve airline operational performance and disruption of management capabilities.

Artificial Intelligence (AI) will ensure that data owned by airlines is mined and interpreted into revealing customers’ needs and enhancing the overall experience of passengers. Therefore, there is need to promote collaboration between all staff and machine learning to crunch data from several sources to eventually improve punctuality and lower operating costs of airlines.

As such there will be an injection of cash that will make airlines competitive since disruptive technology will mean that those aviation bodies that do not change with the times will be shown the door, just like Thomas Cook.

Will Uhuru Kenyatta act?

However, there is a rider the British government refused to give Thomas Cook £150 million bailout. Prime Minister Boris Johnson said that such a bailout would have set a wrong precedent for the government.

“You don’t have to be a mathematical genius to know it would have been cheaper and more cost-effective to save what is a cornerstone of the British high street,” said Manuel Cortes, the general secretary of the Transport Salaried Staffs’ Association.

President Uhuru Kenyatta also faces such a decision. Whereas it is not as dire as the situation of Thomas Cook, before long it might get there.

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