CIO50 2022 #26-50 David Hogarth, Virgin Australia
Few industries suffered as much as aviation throughout the pandemic, with air ticket sales evaporating virtually overnight amid multiple ongoing lockdowns in Australia and abroad, while everyone stowed their passports somewhere safe and battened down the hatches.
The biggest casualty here was international airline and domestic heavyweight, Virgin Australia, which went into voluntary administration in April 2020. But by November of the same year, the airline emerged as a completely transformed business, anointing a new CIO in David Hogarth in January 2021.
Simply being reborn didn’t guarantee survival, however, as Virgin Australia faced serious and unprecedented economic and political uncertainty.
The airline operates in an intensely competitive market, and had to rapidly ramp up operations to service record demand for travel as the country emerged from COVID, growing its fleet by around 60% and increasing its team to over 7,000 people.
As Hogarth tells CIO Australia, technology transformation was a critical part of Virgin Australia’s strategy to relaunch and flourish, in particular, to properly reassert the importance of having its ‘customer’ at the heart of everything Virgin does.
“Customer experience and loyalty are our top priorities at Virgin Australia closely following safety as our unwavering number one priority.”
Repositioning Virgin Australia following administration was critical to building a sustainable and profitable business and required a deep understanding of what the airline’s customers valued the most.
This process of combining business strategy, customer value proposition, and commercial strategy drove the need to significantly overhaul the airline’s technology which had long suffered from under-investment.
18 months into the transformation the airline’s commercial systems have been overhauled including pricing, products, sell channels, partnerships and customer programs, resulting in a significant uplift in revenue.
Next, following a review of customers and market segments, an opportunity was identified to re-engage Virgin’s small to medium enterprise customers.
“For this to be successful, the existing program would need to be reimagined with a new customer value proposition, and to have maximum impact it needed to be in market as flying recovered in April 2022,” Hogarth recalls.
It was a significant project demanding a new loyalty platform to be sourced and delivered in just five months.
“This was a great example of a cross-functional team working with a new technology partner to build and deploy the new capability, customer experience, and commercial proposition leading to a revitalised program exceeding the business case,” Hogarth explains.
An overhaul of Virgin Australia and Velocity’s customer experience and digital ecosystems is well underway following a rebuild of digital capability and replacement of core technology platforms.
Hogarth reveals that the existing iteration was sitting on a platform that was eight years old, and with less than 10% of it optimised for mobile. He also discovered, frustratingly, that a search for flights returned Virgin Australia at the bottom of the page.
Building a new website might seem a tad pedestrian for most CIOs, but for Hogarth Virgin Australia’s new digital home was integral to the company’s shift to the direct channel and the commercial, digital, and technology teams commenced rapid transformation of the digital ecosystem.
“The results speak for themselves: 12 months on from the launch of the new website, with new content and technology, it is now top of the page for flight search, achieving record sales conversion, and month-on-month revenue records,” Hogarth says.
Hogarth is especially proud of having helped create a team that is both agile and adaptable, while able to stay focussed on “major transformation initiatives in a technology environment that had, prior to 2020, experienced long-term under investment”.
This meant establishing innovative ways of working, including moving to squads to accelerate the delivery of digital products and solutions. Continuous learning was embedded as the core of delivery, enabling teams to adjust delivery priorities and product functionality based on changing market and customer responses.
“We built the right channels to engage with the business and our customers as part of the development cycle. We listened to their feedback and incorporated it into our delivery, We did all this quickly, with a careful balance of speed and quality,” Hogarth recalls.
One example of this was the rollout and use of technology to help minimise the impact of border changes on Virgin Australia’s business, and, critically its guests.
While complex cases were left with Virgin’s Guest Contact Centre experts, automation, new APIs, microservices, and forms were built, resulting in some previously manual refund processes being completed in minutes instead of three weeks.
“In the last 12 months automation has performed 1.6 million customer related tasks, lightening the load on the Guest Contact Centre, and enabling them to focus on improving our guests’ experience and supporting them with more complex cases,” Hogarth notes.