Asian airlines maintain investment in AI despite oil crisis

[SINGAPORE] Asian airlines have cut capital spending to conserve cash during the worst oil crisis in decades, but investments in artificial intelligence and data infrastructure have saved the day.

Such initiatives are shielded from deep budget cuts as technology upgrades are considered essential as operating costs soar.

This marks a departure from past airline crises, when technology and infrastructure budgets were often the first to be frozen during cash crunches.

Thai Airways CEO Chai Amsiri said the airline had cut or deferred various capital and operational expenditures to conserve cash, but maintained some key digital initiatives. This includes rolling out a new enterprise data platform to overhaul the airline’s technology infrastructure.

“The rest, other projects and investments, will be postponed for the time being,” Eemsiri said during a panel discussion at the International Air Transport Association (Iata) World Data Symposium in Singapore on Wednesday, April 8. “This will be the foundation for the future of the airline.”

Scoot is also driving digital transformation, with low-cost carrier Singapore Airlines establishing a dedicated data strategy department to manage unstructured information through a new “data lake.”

Its strategic goal is to leverage generative AI (GenAI) to build business intelligence dashboards that optimize significant operational costs, particularly related to aircraft and crew productivity.

“A lot of data is being generated,” said Scoot CEO Leslie Tung. “There are a lot of insights that are probably underutilized as an airline.”

Singapore Airlines CEO Goh Choon Fong said in his opening remarks at the IATA event that a flight from Singapore to London generates about 2 gigabytes of data for analysis.

Thng also noted that GenAI is already delivering tangible and immediate benefits in customer engagement. Incorporating this technology into Scoot’s chatbots improves the accuracy and comprehensiveness of responses, solving the initial problems that prevented traditional bots from engaging customers effectively.

“I believe if we do well here, we can actually become more competitive,” he added. “It really improves customer engagement and operational efficiency, not just from a cost perspective.”

New crisis response book

Nasaruddin Bakar, president and CEO of Malaysia Airlines, said airlines are currently losing sleep over jet fuel premiums of more than US$100 per barrel, but they cannot afford to pause long-term technology development.

Nasaruddin pointed to lessons learned from past industry shocks such as SARS and the post-9/11 economic downturn, and said continued investment is the best way to weather future disruptions.

“We need to manage this in the short term to manage day-to-day operations,” he said. “But in the long run, we need to make sure we invest well in the right things, in infrastructure and even technology.”

Meanwhile, IATA Director-General Willie Walsh noted that airports now collectively handle around twice as many passengers as they did 15 years ago, which was significantly enhanced by early digital transformation initiatives such as self-service check-in.

“If we want to continue to grow, we need to continue to look for more efficient ways to operate,” he said.