What do airlines talk about? A view on the Aviation Festival Asia 2015
We spent 2 excellent days at the Aviation Festival Asia in Singapore last week, where we had the chance to have a closer look at the most crucial commerce challenges the aviation industry encounters, along with rising trends in the Asia Pacific region. And it comes as no surprise that the digital era didn’t bypass the airline industry and has brought along a series of business challenges, such as quick response to market requests, higher customer expectations, NDC (New Distribution Capability), cost pressure, sharp competition and of course the emergence of new technologies opening up additional selling channels and touch points.
Throughout the event and during the “Using personalisation to drive ancillary revenue” roundtable discussion iQuest hosted, we asked airlines, airport representatives and industry professionals about how they come to meet these challenges.
Putting together their answers, we recognised a pattern, which pointed to the importance of having the right tool to address the 3 most painful problems airlines experience:
- Targeting customers with personalised offers and destinations
- Dynamic management of ancillaries (set-up, editing, publishing & promotion)
- The Omni-Channel approach of the travel experience
Let’s take a closer look.
To identify and understand customer needs and their real interest in a certain product or service lies at the core of creating a successful personalised experience. Addressing the right passenger, at the proper time with a relevant offer pays off greatly, both short and long-term. Enabling travellers to perceive the airline’s services as being tailor-made for their specific needs and being proactive to their habits translates into increased customer loyalty and higher revenues. And there are 2 basic elements that build personalisation:
- Knowing your passengers: by analysing current and previous customer behaviour, examining existing statistical data and acting upon these insights, airlines can promote new routes, discounted flights, ancillary products or holiday packages in a more focused manner, bringing great value to their passengers;
- Providing relevant content: paying attention to customers’ behaviour will have a direct impact on the content airlines create & deliver. Promoting a new route, e.g. to Ibiza, bundled with party tickets, might be annoying to elder passengers, looking for a more peaceful destination. Targeting passengers with relevant offers has a big influence on their decision whether to continue the search or bounce to the competition.
It is a fact that ancillaries can bring tremendous financial gain to airlines. The latest Ancillary Revenue Report finds that in 2013, airline ancillary revenue reached $31.5 Billion. For most of the airlines, ancillary revenue represents up to 40% of their total income.
As appealing as this is, airlines are dealing with great challenges when it comes to creating, editing or launching new ancillaries. During our roundtable, airline representatives raised one crucial concern regarding ancillaries – time to market. Launching a new route or a new ancillary takes most airlines 6 to 9 months. Obviously, change is difficult in such a context and the lack of flexibility leads to being one step behind the competition. The answer is, again, having the right tool. Using an advanced platform can reduce the time to market of new ancillaries from months to minutes. Ancillaries Management has to be done in a quick and easy manner, focusing on bringing airlines increased revenue and providing customers a superior experience.
The Omni-Channel Way
Omni-Channel is the “open sesame” of the aviation industry. Today’s customer is, first of all, an Omni-Channel Traveller, an always connected passenger.
Aware of the importance of the Omni-Channel experience, airlines struggle to offer a consistent message across all touch points. When targeting a customer with a deal, it is crucial for the message to be found at all touch points. A consistent and meaningful customer journey allows the customer to start their search for flight on mobile, continue on a tablet, adding VAS in the contact centre, complete the booking on a laptop, check-in at a Kiosk in the airport, and purchase various ancillaries at the same Kiosk. The passenger must be able to see and purchase the same ancillary products at the first steps of the booking while searching on a laptop, and continue their booking on their smartphone 3 days later.
Omni-Channel commerce implies engaging with customers, no matter the time and place, and it is the experience towards which their expectations are headed.
We enjoyed the 2 days at the Aviation Festival Asia as we had the chance to come across a large number of airlines and airport professionals and talk about our hybris-based Airline Commerce Platform. You can find more information here.
I would like to leave you with one last thought. During one of the conferences, the COO of Finnair said that “airlines are part of an industry that has the privilege to have the customer on their ‘territory’ for up to 17 hours”.
How do you, as an airline, capitalise on that?