How Air Malta used cloud and open APIs to turn a profit for the first time in 18 years
“Pushing the envelope” is a term commonly used in aviation which refers to extending the limits of what is possible. Early test pilots used the phrase when discussing plans for what they planned to do when testing experimental aircraft. The plan was simple: go as high and as fast as possible and apply the lessons learned to build better aircraft.
One airline took this phrase and applied it not just to their aircraft, but to their entire business model and the results were astounding.
Today, the airline industry is one of the most competitive in the world. With passenger satisfaction at an all-time high and fares at a historic low, airlines are struggling to differentiate themselves while keeping prices high enough to be able to turn a profit. Pan Am, Monarch and Swissair all ran into financial difficulty and ended up folding despite the fact they all had a great reputation, large networks and, at one time, deep pockets. So if they couldn’t stay competitive – how on earth are the tiny airlines meant to compete?
One of the world’s smallest airlines is Air Malta. Serving a country with a population of just 450,000, Air Malta operates just 10 aircraft and relies heavily on its 5 million tourists each year. But the airline had trouble competing with the big airlines which also shuttle tourists to Malta’s hotspots every year.
To stay afloat the airline had to supplement its income doing odd jobs for the country, including air ambulance and postal services. They also leased out aircraft during the winter months to maximise earnings during the low season.
But even this wasn’t enough. After reporting two decades of losses, the company was on the brink of going bust and time was running out. But their fortune was about to change, all thanks to a complete redesign of their IT systems which took just 11 weeks.
In 2017, Air Malta embarked on a transformational journey. They decided to redesign their computer systems around web-based APIs (Application Programming Interfaces).
APIs work by enabling applications to access the features or data of other operating systems or applications. APIs are the connectors that release the power of operational data across previously disconnected systems. They ultimately enable new insights and give businesses the ability to make more intelligent decisions. They also provide an opportunity to create new uses of existing data and new ideas for new products, value added services, analytics and apps.
In the case of Air Malta, they were able to develop an application network of reusable APIs enabling the company to distribute its commercial relations and flight operations information more effectively and securely within the organisation and with partners.
Since then, the airline has been able to improve customer service through a closer integration among the airline’s reservation system and e-commerce platforms enabling the organisation to easily roll out joint offers with other airlines, provide customers with the most relevant “just-in-time” information, and make modifications to flight arrangements faster.
The airline also used existing APIs to integrate with Ryanair, one of the biggest airlines in Europe. The integration allowed Air Malta to sell its flights from the Ryanair website meaning they could reach a much larger audience.
Following the redesign of their IT systems, Air Malta turned a profit of €1.2m – its first in 18 years. The number of passengers also soared to two million – a rise of 11%.
But the challenges for Air Malta and other small airlines won’t end there. The aviation elite are always looking for ways to attract more passengers. JetBlue a major American airline teamed up with US Customs and Border Protection to enable passengers to use selfies as boarding passes using facial recognition technology; Lufthansa has started to use VR as a sales tool to persuade passengers make the leap from economy to Premium Economy; Emirates are giving passengers access to WiFi onboard, and most importantly of all, Jet2 are now serving Nandos onboard (what more could you ask for).
This begs the question, has Air Malta done enough? Is it too little too late? Or is this just the start of a very exiting journey?
If all this talk of air travel has got you excited to your holidays, check out our blog, 5 Amazing Innovations set to transform our summer getaways.