The Leadership Challenge Airlines Can No Longer Ignore

On the surface, it may look as though airlines dig deep, analyse, reengineer, and make thoughtful changes, but it appears they are not doing so in the right way strategically, as evidenced by the growing losses in their core business.

With that in mind, here are a few observations that may inspire fresh thinking.

I found the following observation by Seth Godin particularly insightflul:

"In a competitive market, if you do the work to lower your price by 10%, your market share grows.

If you dig in deep, analyse, reengineer and make thoughtful changes, you can lower your price another 10%. This leads to an even bigger jump in market share.

The third time (or maybe the fourth, or even before then), you only achieve a 10% savings by cutting safety, or quality, or reliability. You cut corners, certainly.

The last 10% costs your workers the chance to make a decent living, it costs your suppliers the opportunity to treat their people with dignity, and it costs you your reputation.

The last 10% isn't worth it. We're not going to remember how cheap you were. We're going to remember that you let us down."

This quote is taken from Seth Godin's blog post ‘The tragedy of the last 10%’, as it touches on the core issues of the competitive, value-destroying race for growth in the airline industry.

Most airlines and airports have been operating within this zone for quite some time, approaching nonlinear reality with a linear mindset and unaware of its wider consequences.

Airlines are obviously trapped in a system that has no future and need to find the way out themselves. The practice of Systemic Reality Check can help leaders to get a better vision of reality, ready to lead with the core purpose in mind.

It is meant to replace the idea that passengers will be tempted to fly if offered the rock bottom prices in exchange for undignified and costly travel experience. And consequently, that they can indefinitely pack more flights at congested airports. Relying on AI unaware of relational nature of human and economic values  will only slow down the process.

A strategy fit for the future will require leaders to develop new skills and embrace new tools. Among the most important is the ability to fine-tune strategy by learning from disruptions, a principle that lies at the heart of my work.

Leaders need to inspire practices that connect people, processes, and technology in service of what is, what matters, and what is possible.

#AirlineLeadership #AirlineStrategy #Aviation  #SystemsThinking #DecisionMaking #FutureOfAviation

 

Are you ready for human friendly AI agents?

The next shift in technology is AI agents. And the gap between people who understand them and people who don't is about to get very expensive, says Sandeep Swadia, theMITmonk, a technology executive, board member, and investor who has helped build and scale companies that collectively created more than $40 billion in value.

In this video, he is delivering good news that agents are much simpler than most people think. He shows exactly how they work, when to use them and how to start before everyone else catches up. He explains that AI prompt and AI agents are completely different and yet, most of us are still stuck with old habits.

Here are a few insights pointing to the need of shifting our perception of AI in practice - seeing it as a deeply collaborative, human-centric system:

- Agents aren't just going to be engineers, they will be the people who understand their work deeply enough to define it precisely. Most companies want AI everywhere. The ones actually winning are obsessively narrow. If clarity is the bottleneck then the opportunity is not broad intelligence it's narrow ownership.

-The winners won't build the broadest agents first. They will build the one that understands one workflow, one market, and one kind of user pain better than everyone else.

- The question is not whether the shift happens, it is whether you shape it or get shaped by it. The most valuable person is no longer the one who can think the fastest. It is the one who can define good work, spot bad work, and know when to trust an agent and when to trust the human.That is where your value is going to move.

It’s time to take systemic reality checks to a new level.

From Cost Cutting to Customer Loyalty and Human-Centred Technology

As airline losses related to the core business continue to grow, and further forceful cost-cutting contributes to accelerated indebtedness and increasing dependence on investors and lessors, one of the ways to turn things around is to focus on improving revenue quality and customer loyalty.

This means that strategists, planners, and tech experts need to be educated about the specific needs, priorities, and experiences of their customers. No generic software. No generic intelligence.

To move beyond generic approaches, tech experts must be immersed in the direct, daily realities of the customer. This requires a shift from data-centric to customer-centric practices - using data not merely to track metrics, but to generate actionable insights meant to improve the passenger journey and overal airline health.

This is what the contextualised feedback loop behind Systemic Reality Check and astuteaviation.com are about. It transforms data from a functional into a strategic tool embracing diverse experiences and fostering loyalty. It also assumes the introduction of integrative, human-centred technology.

Time To Rethink Our Relationship to Technology

As software improves, the people using it may become less inclined to sharpen their own know-how. Applications that offer constant prompts and guidance can contribute to this; simpler, less “helpful” tools often push people to think, act, and learn more deeply.

Some years ago, information scientists at Utrecht University in the Netherlands asked participants to carry out complex analytical and planning tasks using either rudimentary software with no assistance or advanced software offering extensive support. The results were striking. Those using simpler tools developed better strategies, made fewer mistakes, and built a deeper understanding of the work. By contrast, those using more advanced software often found themselves aimlessly clicking around when faced with difficulty. The very tools designed to help had, in effect, short-circuited their thinking and learning.

 

Even the most sophisticated software lacks the common sense, ingenuity, and judgment of a skilled professional. Whether in cockpits, offices, or examination rooms, human expertise remains indispensable. Insight, intuition, and real-world experience learned over time cannot simply be replicated by algorithms, as Nicholas Carr has argued.

 

In the airline industry, this raises an important question: To what extent does an algorithmic mindset, one that overlooks the dynamic, interconnected nature of airline business contribute to rising losses, particularly those linked to disruptions in planned operations?

 

Simplifying complexity by focusing on the often invisible yet persistent systemic causes of disruptions is an art. The true role of technology is to support this process by making such realities visible, highlighting critical pain points, and enabling timely, informed action to minimise the impact of disruptions. 

These days we have an opportunity to challenge the system complexity at any level by taking AI as an enabler of human-centred technology.  As for the airline industry Systemic Reality Check is designed to support this integrative process on the practical side.

 

https://beyonddisruptions.blogspot.com/2023/07/cutting-through-complexity-practical.html

Unscheduled Maintenance - A Leadership Blind Spot That Can Be Healed

Think about reality of issues related to unscheduled maintenance as one of the most costly, obvious, yet not fully visible reasons behind  operational disruptions. What often remains unseen is the unintended collateral damage created by growth strategies designed to impress unsavvy investors, while losses in the core airline business remain masked by retail or other non-aviation revenues. The impact inevitably seeps into organisational culture.

As for the maintenance realities, they keep being shaped by strategies that prioritise fleet and network expansion, often without understanding their side effects including operational disruptons and their impact on costs, passenger experience and ultimately revenue. This signals a disconnect from operational reality that fuels growing losses.

The problem is aggravated by delay reporting practices that force deeply interrelated causes into simplistic IATA formats, where nearly half of disruption reasons are labelled “reactionary,” detached from their multiple systemic origins. This prevents those determined to make better decisions from doing so. 

Getting out of this industrial trap can start small:

Select just a few fact based initial maintenance-related reasons of disruptions.

Scan how wide they ripple across the network.

Observe how long the effects last.

Measure the schedule adjustments required to bring aircraft back on track.

And most importantly, capture the full cost and revenue impact, including the consequences on passengers. 

          Relational Action Mapping is a next step followed by Progress Monitoring.

In a wider context, this requires leadership conscious of complexity and of the airline’s capabilities needed to overcome it. It points to the need for a new role of system integrator/boundary spanner that channels decisions that benefits the system by connecting data, people, and processes near real time. 

Consider this practice as a first step toward more coherent, systemic decision-making. 

Questioning Strategic Reality

These questions come from lived experiences. They highlight strategic pain points that if unattended add up to growing losses related to the core airline business. 

Are airlines and tech experts ready for it?  

Here is a hint: It is all about working together to turn complexity into simplexity driven by regular systemic reality checks,  ultimately translating operational issues into the language spoken in boardrooms. In essence, this is a leadership challenge based on the evidence-based framework.

Here is more on the practical side:

Systemic Reality Check

Breaking Through Airline Compensation Denials

Here is the story about how passenger ingenuity can outpace rigid and unsustainable rules that prevent them from claiming their right for compensation. 

This real life story is about musician Dave Carroll, a United Airlines passenger whose guitar was destroyed by the airline’s baggage handlers and who was denied compensation for the damage. Eight months later, after receiving a final “no” from United, he wrote a song publicly exposing the airline’s customer service and brand. It quickly went viral and, according to mainstream media “within four days of the song going online, the gathering thunderclouds of bad PR caused United Airlines’ stock price to suffer a mid-flight stall, and it plunged by 10 per cent, costing shareholders $180 million.”

United eventually backed down, stating that the company would “use the video internally as a unique learning and training opportunity.”

The massive publicity finally triggered a compensation offer to the passenger which, at his request was donated to charity. 

It happened in 2009 and, as of November 2025, it reached over 30 million views on YouTube only (still growing), adding to popularity of his book ‘United Breaks Guitars - The Power of One Voice in the Age of Social Media’.

The question remains: is it social media that passengers must use to protect their basic rights, or is it up to airlines to work harder to minimise the number of unpleasant passenger experiences and show more respect for customer claims when things go wrong? And, by doing so, increase their revenue. 

But here are bigger questions: who should drive this kind of innovation? 

Is it airlines, passengers, or both? 

And also, can experience driven AI be able to support that effort and create synergy?

Here is the link:

https://www.youtube.com/watch?v=5YGc4zOqozo

What Siloed AI Is About

Just wondering how long it will take for airline leaders to realise that siloed AI in operations doesn’t improve coordination, it often makes it worse. When flight operations, maintenance, crewing, and ground handling optimise separately, the outcome is more fragmentation, not more control. Siloed AI doesn’t create intelligence. It creates faster confusion.

The bigger question is what this will do to debt-funded expansion?

The only way to receive timely warning signals, and take collective action before losses appear, is to embed a Systemic Reality Check: a continuous feedback loop that enables introduction of integrative, human-centred technology.

More about it

Embracing the Economics of Loyalty as a Profit Driver

Have you ever thought that saving a customer can be ten times more rewarding than finding a new one? This is what Seth Godin refers to as 'economics of loyalty', and here is why:

'The us/them mindset of most corporate customer service is simple:

1.      When you can, get it over with
2.      If at all possible, evade responsibility

Which means that when things go wrong, you’ll likely encounter a legalistic mentality that begins and ends with 'it’s out of our control'.

There’s an alternative.

It begins with understanding the economics of loyalty. Saving a customer is ten times more efficient than finding a new one. If it costs an airline $1,000 of marketing and route development to acquire a first-class business traveller, it’s worth at least $10,000 in customer service to keep one.

And it continues with a simple tactic: Instead of defining the minimal legal requirement, outline the maximum possible action you could have taken.

Because the race doesn’t go to organizations that do the minimal legal requirement. The race goes to those that figure out what they could do. And do it.”

Just wondering, what would the ratio be if this economics of loyalty is applied to employees? What if the decision to keep a valued employee is ten times more rewarding than finding a new one?

This is the kind of insight that emerges from a context-specific Systemic Reality Check, where patterns of value, loss, and loyalty become visible, now increasingly supported by a customised use of ChatGPT-5 to become a part of my Astute Aviation Consulting offering.

What Are the 5 Key Indicators That AI Isn’t the Answer?

The following Parallaxis article taps at the core of todays AI overhype and brings us all down to reality:

Sometimes it takes greater leadership to "not" do a thing than it does to succumb to the pressure of going along with the crowd. This is just as true in business as it is in high school. Most (all?) leaders want to be seen as innovative and technologically savvy. This, combined with the pressure to "not be left behind the Al wave (craze ?), creates a compelling urge to implement Al for something in your business. And that is a recipe for disaster.

The smartest Al strategy begins with knowing when not to use it. Technology is a multiplier-not a replacement-for disciplined thinking, well-designed processes, and human judgment. Using Al without clear operational problems to solve often results in Al theater, projects that impress but deliver no measurable value. Focus on improving data quality, automation maturity, and human decision systems before starting your Al journey. Al should be the last tool added, not the first.

Read the full Parallaxis article https://www.parallaxis.ai/blog/5-key-indicators-that-ai-isnt-the-answer

Insightful Interviews: In Preparation For Integrative Decision Making

Over the years, I’ve journeyed through the uncharted areas of the airline business, discovering how the missing links between data, people, and processes quietly fuel rising costs and passenger dissatisfaction. Recognising these patterns has strengthened my resolve to uncover and address the deeper systemic gaps that, once understood, can pave the way for a more connected, resilient, and human-centred industry.

This journey led me to meet leaders who share the same curiosity, those willing to exchange their experiences spanning strategy, operations, and technology.

I’m sharing these conversations again at a critical time for the airline industry, which needs to broaden its understanding of the diverse and interrelated issues that are surpassing human abilities alone. Together, these insights point to the need for integrative, human-centred technology to make this transition less painful and far more meaningful. All that tuning to practice of Systemic Reality Check.

These interviews came at a time when I was looking for more down-to-earth, to-the-point insights while writing the second edition of ‘Beyond Airline Disruptions – Thinking and Managing Anew’.

You can access my conversations with fresh thinkers here:

Can a Tech-Driven ‘Happiness Blanket’ Really Improve Passenger Experience?

About a decade ago a major UK airline had started trialling a hi-tech blanket – known as the ‘happiness blanket’ – which uses neuro-sensors to measure the electrical fluctuations in the neurons of passengers’ brains, and changes colour depending on their state of mind.

The senior executive commented: This is the first time this technology has been used by any airline to help shape how service is delivered onboard an aircraft. He explained that the happiness blanket is a new way for the company to investigate how their customers’ relaxation and sleep is affected by everything onboard, from the amount of light in the cabin, when they eat, to what in-flight entertainment they watch and their position in the seat.

I still wonder if those ‘happiness blankets’ were ever used to measure the mood of passengers experiencing long delays. If so, how did it affect their loyalty?

Just thinking…  could today’s AI do any better at measuring passenger happiness?