WHAT’S NEXT TO CHANGE IN THE GLOBAL AIR TRAVEL LANDSCAPE?

Sabre Airline Solutions has released a whitepaper highlighting the business challenges faced by airlines in the area of customer experience. Brand differentiation and personalized sales and service are becoming increasingly strategic areas for leading airlines due to their market share and profit potential. In the whitepaper, Sabre discusses the unique complexities in the industry, analyzes new findings about revenue potential, and discusses ideal solutions for these problems in the market place.

The leaders of airlines across the world will determine the next areas of innovation for air travelers. With this responsibility, executives are constantly considering a great number of ideas and future initiatives. Each day, they evaluate a number of possibilities: levers to pull for new and improved revenue streams, opportunities to cut costs and improve efficiency, and methods to better engage their customers and improve loyalty Here are the top 10 things airline executives are thinking about today, from their perspective:

#10 – Serving an Increasingly Connected Customer

While it’s no secret that airline customers expect to be more connected than ever before, they are also willing to pay for entertainment and increased productivity during a flight. This creates “time re-capture” and provides value to the passenger. Flight crews are more connected than ever to their technology systems on the ground, enabling greater in-flight, personalized service opportunities. Conversely, customers are empowered to voice feedback in real time on social media as well, so it’s imperative that to take advantage of these new opportunities.

#9 – Optimizing & Differentiating for the Full Travel Chain

For a passenger, flying will always be part of a larger travel chain. A flight does not exist as a standalone event – it’s surrounded by a larger itinerary of ground transportation, hotel accommodations, time through the airport, and the activities taking place at the destination. These phases collectively build the traveler’s journey. Today, these are a highly related group of activities occurring in a highly disjointed set of procurement processes. The prioritization is rising (as is the revenue opportunity) to invest a seamless booking, cross-selling, and overall trip management experience for travelers.

#8 – Identifying My Best Customers and Predicting My “Next” Best Customers

A very large, and disproportionate, portion of our revenue is generated from the top 10-15 percent of the customer base. Losing even one of these customers to a competitor is very unpleasant for any airline, even large network carriers. However, these high value customers tend to be long-term customers with a loyalty status that is prohibitive to leaving the brand permanently. We must ask ourselves: what new predictive analytics technologies can be utilized to identify potential high-value travelers early and engage them to build long-term loyalty? If this can be done, we can get a leg up on the competition and build a healthy pipeline of new customers.

#7 – Defining and Enhancing the Airline’s Role at the Airport

Plain and simple, the airport is a pain-point for the majority of travelers. Based on their experiences with other service industries, travelers have developed a baseline for expected service; this would include self-service capabilities for all airport activities, mobile-ready retailing, expeditious throughput, and location-based check-in. Will airlines have more or less influence on airports in the future? Does this affect how customer experience and technology will improve at the airport?

#6 – Service Recovery

Experiencing delays and cancellations, even if adverse weather conditions are involved, do not make for a great customer experience. Personalizing the re-accommodation process offers a significant opportunity for us to differentiate from the competition. New customer data and mobile technologies could enable a new era of self-service – choice-driven re-accommodation that operates in real time.

#5 – Personalizing the Travel Experience

Airlines experience many different interaction points with their customers throughout the journey. While data is “pushed” from customers to airlines at every touch point, airlines should consider “pulling” pertinent customer data to interpret and personalize future interactions. Whether a structured preference (“I prefer aisle seats”) has been submitted, or an unstructured shopping behavior has been observed (queries of Caribbean destinations), the opportunity and technology enablers are now converging.

#4 – Creating Sticky Loyalty with Our Best Customers

As discussed earlier, in the airline space, the 80/20 principle for revenue does not apply for many airlines. We cannot afford to lose their high tier customers. Even still, it does happen on occasion. Creative tier status matching programs and proactive recruitment of competitor’s customers is often a profitable activity. Developing true loyalty with our customers will be based on differentiation and affinity. Becoming a better retailer will be an avenue to that by providing unique products and experiences that my customers value.

#3 – Optimizing Partnerships

At the end of the day, we’re in the business of bringing the world to our customers. A carrier is at a disadvantage if they’re only able to provide limited access to areas in the world. Becoming a more dynamic retailer across partners by providing a seamless flying and shopping experience to our customers maximizes revenue while delivering on our brand promise. Creating a larger network, whether by codeshare, interline, or organic network expansion leverages fixed cost synergies and increases our opportunity to merchandise to a larger customer base.

#2 – Increasing Ancillary Revenue

For our industry, this current phase of retailing sophistication is only the tip of the iceberg. The products that we provide, the channels that we sell through, and the way that we fulfill those purchases will all change dramatically in the near future. We’ll need to provide innovative products that enhance the experience and build loyalty by enabling time recapture. In their own home or workplace, our customers have so many ways that they can be productive and enjoy themselves in a comfortable environment. We should be able to provide this experience in a unique way that provides value and can be monetized.

#1 – Maintaining a Comprehensive, Accurate View of Each Customer

Needless to say, it has historically been difficult for airlines to know each of their customers at an individual level. We’ve always known our average costs, revenue per annual seat mile, customer base segmentation, and other macro-level metrics. However, our customers are individuals, and becoming more and more unique over time. The technology is available now to aggregate and analyze all of the data we take in about our customers and use that comprehensive view to engage them in a one-on-one dialogue. Doing this will change the way we do business, and will absolutely change the game for the entire industry.

To read a full analysis of airline customer experience strategy, download the whitepaper!