Top flight: Air NZ's sky-high innovations

Innovators are often guilty of searching for solutions before identifying problems; of finding gaps in the market, without being sure if there’s a market in the gap. But, as Ben Fahy discovers, Air New Zealand can’t be accused of that and, in many cases, its clever use of technology is providing answers to a range of customer concerns, some voiced, some not.  

Since the Wright Brothers headed skyward on December 17, 1903, a host of aeronautical advances – whether airplane technology, improved airport infrastructure, better crew training, stricter regulatory requirements or self-reporting programmes to analyse pilot errors (and stop them from happening again) – have made flying much safer. As Patrick Smith of the Ask the Pilot blog says: “I’ve heard 8x, 9x, 10x safer than we were 30 years ago, even with double the number of airplanes in the sky.” 

While it’s understandable that some humans are still concerned about the thought of getting into a heavy, flying metal tube—thanks in part to media coverage of the extremely rare incidents that makes them seem much more common than they actually are – the risks of dying in flaming wreckage are miniscule. New advances will inevitably come on stream to further reduce those odds, but now that planes generally get to where they’re going without any mishaps, airlines are increasingly harnessing technology in an effort to make things easier and more pleasurable for passengers. 

Flying, despite its general awesomeness, is an activity humans love to hate. And, in many cases, whether it’s the dynamic pricing, the laboured check-in process, the delays, the lost baggage, or the sneaky arbitrary fees, it’s warranted. But Air New Zealand has made it its mission to improve the entire process. 

It’s easy to forget that Air New Zealand has not always been at the top of its game. When Ralph Norris was appointed as chief executive in 2002, the company had just suffered the biggest loss in New Zealand corporate history – $1.45 billion – as a result of its failed tie-up with Ansett Australia. Now it is very profitable, renowned as one of the world’s most forward-thinking, tech-savvy, customer-focused airlines, and has become a source of great pride for many New Zealanders. 

Carrie Hurihanganui, general manager, customer experience, has been with the airline for around 17 years, and says it’s never a case of using technology for technology’s sake. It’s always based on customer insight and, in many cases, it’s about using technology to give those customers back some time. 

“One of the things we talk about a lot is that digital enables and enhances outstanding experiences … That ability to personalise experience is something we’re very focused on. It might be through your website booking or your inflight entertainment. But it’s more than just digital. It’s service-oriented.”

Fast forward

Speaking at an event earlier this year, Air New Zealand’s relatively new head of innovation, Scott Bishop, who previously worked at Amazon and Microsoft, talked about the difference between companies with an offensive mindset (like, Tesla, which took its patents open-source) and companies with a defensive mindset, which generally fail because they’re trying to protect a legacy and tend to force customers to adapt to their business, rather than looking at what their customers actually want, trying to solve their problems and adapting their business to fit them. It takes confidence to embrace the new rather than protect the old, but while the competition is debating whether to implement something, he said the offensive companies who back themselves to stay ahead of the pack have already moved on to developing the next thing. 

As an example of this mindset in action, Air New Zealand rolled out self-service kiosks for domestic flights in 2006. Customers loved them and it then became one of the first airlines to extend the technology to international flights. And now kiosks are well-embedded around the world. 

“We look at where there might be pain points and challenges and we ask if we can use technology to make something more seamless," says Hurihanganui. “Overwhelmingly, passengers were saying queuing was one of their least favourite activities, so we looked at things we could do better.”

Its ever-popular safety videos are another good example of the airline’s willingness to question the way things are done. 

“We asked ourselves ‘how do we make the topic more interesting and engaging and get passengers to pay attention?’ And a lot of other airlines have followed our approach.” 

Skycouch – “a row of three Economy seats that together create a flexible space for whatever you want it to be” – has followed a similar trajectory and, after winning a host of international awards, she says Air New Zealand is in discussions with a number of non-competing airlines about licensing the design.

How’s the view? 

One of the promises of technology for businesses is its ability to ‘create efficiencies’, a euphemism often seen in press releases that usually just means ‘reduce staff’. And there is some legitimate concern among workers about the seemingly unstoppable shift towards automation and the potential
for job losses. Many seem to believe human pilots are becoming increasingly unnecessary, but most experts agree it will be a very, very long time before that happens. And Hurihanganui says Air New Zealand aims to use technology to free up resource among existing staff, rather than find ways to replace them. 

“With the kiosks, we took those staff from behind the counter and put them among the customers. If you take away some of the transactional functions your staff have needed to do, it actually allows them to engage in richer conversations.” 

Some areas can be fully digitised, she says. And many customers now exclusively book their flights online. But people are also experiential, multi-sensory creatures, she says. 

“We spend a lot of time investing in listening to our customers. And what they say is that ‘generally I’m happy in many instances to self-serve, but when I want help, I want help in real-time.’”

Creativity loves constraints

Hurihanganui says regulatory requirements often dictate what you can and can’t do in the aviation industry. But, while it may seem paradoxical, innovation thrives when there are limitations. As Matthew E May wrote in the Harvard Business Review: “Tough obstacles can prompt people to open their minds, look at the ‘big picture’, and make connections between things that are not obviously connected. This is an ability called ‘global processing’, which is the hallmark of creativity ... An intelligent constraint informs creative action by outlining the ‘sandbox’ within which people can play and guides that action not just by pointing out what to pursue but perhaps more importantly what to ignore.”

Working within the strict rules, Air New Zealand’s latest time-saving trick is automated, biometric bag drops, which she says are a world-first for aviation. Passengers who have scanned their passports at check-in can put their own bags on the scale where multiple sensors and scanners check them. It then uses facial recognition technology to see if you match your passport photo. The first of them were launched in December at Auckland International Airport and there were more launched in February this year. 

“The journey for a trip is a long one,” CEO Christopher Luxon told Stuff, and another area the airline is trying to improve is the printing of bag tags, either by allowing passengers to print them at home and put them in a reusable sleeve, or by creating an electronic tag that could change codes. As the story said, “the difficulty so far has been finding a screen on the tag that will stand up to the rigours of rough baggage handling”. 

Back in 2014, Mark Sagar, the creator of the amazing artificial intelligence programme Baby X, which reacts to its surroundings and learns to respond in an appropriate way to the humans interacting with it, announced he was working with BCS Group, an Auckland-based company providing baggage handling, self-service check-in and other technology to airports and airlines, to introduce AI-powered kiosks. So is that on the cards for Air New Zealand? Hurihanganui says it is not using this kind of technology yet, but she says a number of people in the organisation spend a lot of time out in the market looking at what’s happening with technology and the digital world, rather than just looking at what their competitors in the aviation industry are doing. 

“They are constantly scanning and understanding, so that we can bring those back to enhance the journeys of our customers.” 

I, for one, welcome our new AI overlords and wait patiently for a friendly Air New Zealand robot to help me put my bag in the overhead locker. I also wait patiently for the media coverage when an insensitive Jetstar robot asks someone if they’re pregnant when they’re not. 

Latent but potent 

While waiting in a queue is an obvious annoyance for passengers, Air New Zealand also looks for what it calls “latent opportunities” and one of those was for children travelling alone. 

Hurihanganui says no-one was specifically asking for new solutions and the existing process worked reasonably well. But while the kids are generally stoked to be going on the plane without mum and dad, it could be a nerve-wracking experience for parents or guardians. So, just over a year-and-a-half ago, a group of Air New Zealanders gathered together to throw some ideas around. 

It looked for some inspiration in other sectors and found it in Disneyland, which used a wristband with an embedded chip to track customers in the park. After trialling the technology for a few months, Air New Zealand officially launched the Airband – an NFC-enabled bracelet that is given to children flying solo and can send notifications to up to five people when the kids pass through certain points on the journey – in November last year. 

Previously, Hurihanganui says customers could book unaccompanied children’s airfares online, but “the paperwork and processing was much more time intensive”. 

“Now you can sort it all online … And what we didn’t have with the paper-based system was the ability to scan and give notifications and texts directly back to the parents to say ‘little Johnny has boarded the flight and has arrived at the destination’. And that’s really nice. They know they got there safely … That reassurance is really valuable.” 

While this idea serves a practical function –keeping track of kids – it’s also a good marketing tool: it shows customers who have children that the airline is thinking about their problems and trying to solve them, and, with kids able to choose one of four colours when they check in, it also engages them in the process (just as banks are keen to establish loyalty early on by handing out piggy banks, some might consider this the aviation equivalent). 

Air NZ Airband

While it did run a free trial until February, it now charges a fee of $15 per child aged 5-11 for each one-way domestic journey on selected routes, or $40 per child for each one-way international journey (children 12- 16 can also use Airband at the request of a parent or guardian). 

But technology can only do so much, she says. When children are travelling alone, the parents check them in and, just as before, they’re accompanied by a staff member at all times.  

Since Airband was launched, she says plenty of customers have shown their appreciation for it on social media and have made suggestions for other things they should be using it for. Luxon has previously mentioned pets and elderly relations as potential users in the future. So how about pilots? Or maybe even planes? 

“We have slightly more technically advanced options for that,” Hurihanganui laughs.  

Another example of a latent opportunity can be found in the Air New Zealand app. It allows users to do all the things an airline’s app should, like book flights, check in, or see how many Airpoints you have. But there’s one feature that seems to have received an inordinate amount of love from users: the ability to pre-order your coffee and pick it up in the Koru Lounge. 

“Since the app came into play earlier this year, it tipped over one million drinks that have been ordered,” she says. “We didn’t have customers saying ‘it would be great if you had an app so I could order my coffee’. What we had were customers arriving in the lounge without much time and needing to wait for a coffee. People need their coffee, particularly in the morning, so we asked ourselves ‘how could we make that easier?’” 

Technology isn’t a saviour. It is merely an enabler. And for it to be effective, Air New Zealand has shown that you just need to ask the right questions.