Altitude 25: Saudia hails community approach to building better technology

Moving into the modern world of digital retailing needs to be a collaborative effort and the risk of not transforming outweighs the risks of navigating change, the Altitude25 conference heard.

Arved van sur Muehlen, chief commercial officer of Saudi Airlines, told airline delegates at the event in Lisbon that a new relationship with Amadeus has transformed the way it works with the GDS and technology and systems provider.

He said the 80-year-old Middle Eastern airline understood that it had to modernise, as Saudi Arabia was also looking to the future.

Its Vision 2030 plans are centred around diversifying industry in a country in which 68% of the population is under 30 and  whose government and people are among the world’s most tech savvy.

“The Kingdom of Saudi Arabia is changing with tremendous speed,” van sur Muehlen said. “It’s a change that is maybe unheard of globally.

“I think the transformation you can see, and we can feel, and we are in the middle of it. We see this transformation in the mega-projects but it’s actually much, much deeper.

“That’s a huge opportunity for us as an airline. It’s also a huge challenge. How do we transform? Fix the basics, that’s what we did first. What are the pain points? Two things stick out; one was punctuality, and the other one was the app.

“If you are not punctual you are simply not a good airline. So we brought together people, processes and technology. Our goal was to be number one [got punctuality] in the world.

“We have not achieved our goal, but we are number two. Our teams did not believe in it when we started. Emotionally. we have now instilled belief in our teams that our transformation can happen.

“When we looked at our tech stack, number one we wanted to negotiate a new PSS [Passenger Service System] deal with Amadeus to get the foundations right. It’s painful, it’s not a nice thing. We challenged Amadeus. We said we want a new deal, not the old deal.

“We wanted flexibility, we wanted actionability, we wanted to do it together. We did not get everything we wanted, but we got a new contract that will take us into the future.”

Working in close partnership with Amadeus throughout the Covid period, van sur Mhuelen said Saudia learned how to use latest retailing tools and launched branded fares and dynamic pricing and bundling to turn itself into a modern airline.

“For us it was a real game hanger to work with Amadeus in a new way,” he added.

Saudia is aiming to increase the proportion of its NDC [New Distribution Capability] business to 40% next year from 20% mainly through a “carrot” approach involving incentives although over time with “sticks” as the carrots diminish in size.

“What’s the ROI [Return on Investment]? I don’t know. We will figure it out. We know what we want roughly. We know where we will end up in three years but there’s this layer of fog.

“We will figure it out. But we have to go into the fog. The risk of not moving is higher than moving. We can only solve it when we see the problem. We cannot anticipate it all.

“This is technology driven but there’s a business transformation, a people transformation. There are lots of things we need to do as an airline to get the real benefit.

“We went to be in control of co summer data, of price and offer, distribution of offer. I have to stay in the pilot’s chair, I have to steer it and my partners will help me to do so.

“I need to be flexible, I need to be agile. I can’t wait six months to integrate something. Time is moving so fast, it’s accelerating.

“If we move in the new world like we did in the old world we will miss the opportunity. That’s the problem, we are not fast enough in adopting new technology.”

Van sur Mhuelen said he was happy that major carriers like BA and Air France-KLM had agreed to sign up to Amadeus’ Nevio modern retailing platform “because there is no way back, the ships are burning, and we have to go in that direction.”

He added: “It has to be a community effort. We want to be at the table when we make decisions. We do it together.

“This communication is key for us to succeed in this endeavour. It’s not the airlines’ future, it’s our future together. We can only do so much. We need Amadeus and other partners to work at this jointly.

“I feel confidence in your technology. We love your people. We hate your contracts, but I have seen in the last year a real chance in Amadeus. This technology is amazing. We can really build a better future.”