Air Canada's plans to develop its own frequent flyer program are one of several digitization initiatives the airline is pursuing to meet the varying needs of its 45 million passengers a year, CEO Calin Rovinescu says.
Weeks after Air Canada announced it was ditching Aeroplan, Rovinescu said the decision was part of the company's broader strategy to become more digital in its operations. That includes looking at working with artificial intelligence specialists to recognize patterns in customer data and employing augmented reality to change how employees learn and collaborate.
Using data analytics on information collected from frequent flyers will help the airline better understand their shopping patterns, improve service and build loyalty, Rovinescu said. Air Canada plans to launch its own loyalty rewards plan in 2020.
"By bringing it in house, it will enable us to be much, much closer to our customers in terms of the offers that can be made and having the ability to in some respects deal directly with our key frequent flyers," he said in an interview.
Michael Kamel, who advises airlines on business strategy and innovation for PricewaterhouseCoopers, said carriers are feeling pressure to act from tech-savvy passengers and competitors that operate with lower costs.
Airlines around the world are using different technologies in an effort to improve passenger service, such as texting flight changes to cellphones. Still, the industry has been slow to adapt.
"We are in that pre-evaporation phase where we're just seeing the bubbles," Kamel said.
The transportation sector as a whole is becoming increasingly focused on technology with the advent of automation. Last week, Canadian National Railway announced it plans to spend $500 million over five years, partly in response to the threat posed by driverless trucks.
Air Canada's (TSX:AC) focus on its next wave of growth comes after a series of restructuring efforts since 2009 that have helped turn around the financial position of the country's largest carrier.
It has signed long-term labour agreements, spent billions of dollars adding new aircraft, expanded its international network, launched a low-cost travel airline and restored its pension plan to a surplus.
"This is a totally different company than it was in 2009 in almost every single respect," said Rovinescu, whose company was selected Tuesday as the best North American airline according to a survey conducted by Skytrax of nearly 20 million passengers around the world.
Globally, the Montreal-based airline is ranked 29th, behind mostly Asian and Middle Eastern airlines, which are perennial leaders. Porter Airlines was 55th, WestJet 58th, Air Transat 70th and Air Canada Rouge 99th.