Many leading airlines are operating on function-led structures and systems designed for a stable, more predictable industry. These infrastructures worked when demand patterns were steady, competition was limited, and customer expectations evolved gradually.
But that world has gone.
Customers now want carriers to recognise them instantly, remember their preferences, and respond intelligently when plans change. They expect digital services to work smoothly, the first time, like the apps they use every day.
Most airline leaders recognise the gap between customer expectations and what their organisation can currently deliver. But COVID-era cost-cutting slowed investment in technology and operating models. And five years on, many airlines are still constrained in how quickly they can make changes.
Today’s traveller demands can’t be met while operational infrastructures are still organised around functions. A product-led model brings business and technology together around customer-focused objectives, making cross-functional collaboration easier and helping airlines to deliver value faster.
An operating model built for a different era
Price and reputation no longer differentiate airlines as they once did. Low-cost carriers are raising the bar on digital experiences, setting higher standards for everyone.
Many now judge airlines on how well they communicate, how easily they self-serve, and how the customer experience holds together when plans change. As Gartner notes, “the focus is shifting from point-to-point travel to providing an end-to-end travel experience.”
Yet, for many airlines, monolithic technology stacks make it hard to meet new expectations.
Technical teams are often focused on system workarounds and integrations, so changes to the digital offer move slowly. The pandemic compounded this challenge, as innovation programmes were paused or stopped altogether, and specialist development teams were disbanded.
Functional silos add another layer of friction. Responsibility for customer journeys is spread across departments. Decisions take time, and it’s not always clear who is accountable for the outcome. There’s tension between what technology is capable of and how it’s being used across the business. And handoffs between teams can break the flow of development, with improvements taking too long to reach customers.
Several carriers are exploring how AI can help to predict disruption and personalise customer journeys. But its impact will remain limited if systems and teams are fragmented.
Why “keeping the lights on” vs “building the future” is a false choice
Airlines must operate under strict safety and regulatory requirements, which affect the pace of innovation. Long planning cycles and seasonal ‘blackout’ periods are often needed to protect operations. This leaves little room for quick tests or iterations, meaning progress comes in stop-start bursts, and quick wins are easily missed.
Some carriers have tried to drive improvement by separating development streams: one stream running business-as-usual programmes (keeping the lights on) with a separate stream designing new product releases (building the future).
But in practice, this split rarely holds. Shared systems, shared people and shared partners mean decisions in one stream inevitably impact the other.
A better approach is to evolve live journeys in small, frequent steps, with business and technology decision-makers working together in a single product team.
Organising change around customer journeys
One way airlines can accelerate innovation is by organising work around the customer experience, rather than internal functions. Key journeys, such as booking, ancillaries, managing disruption, rebooking and loyalty, are treated as products in their own right, each owned end-to-end.
With this approach, the “product” is the journey customers move through, not the system behind each step. Teams focus on how touchpoints connect, so the experience feels coherent rather than stitched together.
To make a product-led model work, airlines need to build cross-functional teams that combine expertise in technology, data and commercial thinking. Technical and business colleagues need to work collaboratively so decisions are aligned with the customer journey, and departments aren’t pulling in different directions.
Regional product owners can add important nuances to development decisions. Local regulations, cultural expectations and operating realities can be incorporated into the product framework without losing overall brand consistency.
Start with the journey, not the tech stack
Customers notice when channels and touchpoints don’t join up: each step looks and behaves differently, with no smooth handoff from one to the next.
Embracing a product-led model means structuring development around how people move. To do that well, airlines need to listen to three distinct voices:
- Customers: Insights from complaints data, social media signals, customer satisfaction scores (CSATs), net promoter scores (NPS), and qualitative research should guide decisions alongside technical feasibility and commercial priorities.
- Frontline teams: Cabin crew, customer service agents and operations controllers see where processes fray and where workarounds have become the norm. Many of the pain points they deal with never appear in dashboards.
- Partners: Many elements of the airline journey are handled by third parties, so improving the customer experience means working across organisational boundaries, not just fixing internal systems.
Bringing these voices together enables teams to focus on issues that affect the whole journey. It also helps align change across operations, digital channels and partners, reducing the risk of fragmented improvements that customers never fully experience.
The skills and mindset behind product-led transformation
A product-led innovation model replaces short-term delivery with long-term ownership, and this requires a change in mindset. It asks people to work, lead, and learn differently, shifting from a “deliver a project and move on” mindset to owning a product and continuously improving it.
A critical part of this mindset shift is what we at Gate One call “combing the backlog.” It means regularly revisiting the full set of potential product changes and improvements, and prioritising work by customer impact and the value generated.
Another key element of product-led transformation is providing proper training and support programmes. Many airlines have invested in agile training for technical teams, but far fewer include product managers and owners. Without that grounding, teams can easily revert to old-world project thinking.
Ongoing digital and data literacy helps staff make smarter decisions, reduces over-reliance on contractors and builds long-term capability. Third-party teams need to feature in these training programmes, as they must work in the same product development rhythms to maintain momentum.
Prioritising these areas makes it easier to embed emerging technologies like AI into everyday work; an important factor when recruiting younger digital talent, who expect credible tools and dynamic working practices.
Creating the conditions for product teams to deliver change
A product-led model works best when teams have the funding, freedom and success metrics to continuously improve customer journeys.
Traditional project-based funding models can clash with product-based development programmes, which rely on stable budgets for teams to plan, learn and improve over time.
Airline leaders need to create clear guardrails while also giving product teams the autonomy to make strategic decisions, rather than approving every line item or tying funding to short-term outputs.
Once teams are trusted to work this way, leaders need alignment on how to measure success. That view should be built across a balanced set of outcomes, including:
- Time to market
- Adoption and usage
- Customer satisfaction
- Operational efficiency
- Revenue and margin impact
- Loyalty engagement
- Repeat purchases
- Ancillary conversion
Internal measures, such as employee engagement, product team health and turnover in key digital roles, can also show whether the model is delivering results.
How to structure and measure successful product programmes
Moving to a product-led model does not require a wholesale redesign of your organisation. Many airlines begin by running pilot programmes that test innovations on a small scale. The aim is to demonstrate value before rolling out proven approaches more widely.
The seven steps below describe how airlines can structure these early programmes and measure their impact:
1. Choose high-value journeys as pilots.
Focus on one or two areas such as ancillaries, disruption handling or rebooking. Concentrated effort delivers greater impact than thinly spread resources.
2. Create cross-functional product teams.
Give them clear ownership, decision-making rights and protected capacity so they can focus on outcomes rather than fighting internal battles.
3. Define your success metrics.
Keep them simple and concrete so progress can be demonstrated quickly and credibly.
4. Release early and often.
Use pilot programmes to demonstrate tangible improvements, such as fewer calls, higher CSAT scores or better conversion rates, and build the business case for broader change.
5. Test governance as well as delivery.
Review finance, governance and risk processes during pilots to remove barriers that may affect scaling later.
6. Codify what works.
Capture roles, rituals, metrics and decision rights, so other teams can adopt proven patterns rather than starting from scratch.
7. Extend with AI where it adds value.
With the foundations for product-led transformation in place, explore AI-enabled tools that support proactive communication, faster disruption handling and personalised service across the journey.
Product-led models will decide who’s still flying in the next decade
Rising fuel and operating costs, fragile finances and high customer expectations have left little room for technical investment that doesn’t deliver value. Airlines that don’t become product-led risk falling behind the competition.
Yet many leading carriers are not structured for continuous innovation, particularly when it comes to adopting AI. Gate One’s Transformation Index reveals that only 20% of travel & leisure organisations are true transformation leaders, with 25% of airlines admitting AI is evolving too fast for them to keep up.
Moving away from legacy structures towards a product-led model will allow these airlines to make continuous, incremental improvements rather than waiting for large-scale change. It creates the capacity to adopt AI-driven capabilities and enhance the customer experience.
For carriers wondering where to start this transition, here are some key action points to consider:
- Identify one or two high-impact journeys that are causing customer friction or driving up operational costs.
- Assign clear end-to-end ownership for those journeys, with decision rights shared between business and technology teams.
- Evolve live journeys in short cycles, rather than waiting for major releases.
- Agree on a set of measurable outcomes that show whether change is improving the customer experience and reducing internal effort.
- Use pilots to test governance and decision-making models before scaling business-wide.
As programmes mature, collaboration will become particularly important, in some cases with external partners and even other airlines, to address shared challenges and create cohesive, dynamic customer experiences.
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