1. Gadgets in-flight – personal and those supplied by the airlines
2. The connected traveler – and how to drive engagement and revenue
3. Learning from other retail models – in this case Kuala Lumpur International Airport and Tesco in Korea

Sharing here my Prezi presentation. The recorded video will be available soon too, so please do check back!

• [Presentation] from TFWA 2012: The Connected Travelers – how to engage and drive results from them
• Airports in social media – driving results and the road ahead. Presentation from ACI Airport Exchange, Abu Dhabi
• Low cost airline brands get creative with ancillary revenues – lounges, shops and cargo!
• The buzz from #socialindia about our presentation on how airlines drive results from social media
• Top 10 Airports on Social Media – case studies of the airports best at driving engagement

While I focused on key business goals like driving customer service and non-aeronautical revenue, I shared case studies from this year’s SimpliFlying Award winner London Gatwick and nominee Changi, among others. During the half-day MasterClass, I shared in-depth case studies and gave the participants a feel of how using free tools like socialmention.com and Geochirp.com can make their job easy when trying to engage customers.

I share with you here my Prezi presentation from the conference. A video recording will be posted up soon as well. Would love your comments on this.

 

ACI on Prezi

@simpliflying presentation was grand. #smartairports #Airportx

November 30, 2011 3:42 am via Twitter for iPhoneReplyRetweetFavorite

@msjolund

Mattias Sjölund

#airportX interesting session on how social would revolutionize airport and airline revenue

November 30, 2011 3:09 am via Twitter for BlackBerry®ReplyRetweetFavorite

@Simillonpat

Patricia Simillon

Big crowd for @simpliflying Presentation @ #AirportX -a repeat of his stellar performance @ ACI EUROPE event in Lisbon! http://t.co/BhifmQzB

November 30, 2011 7:31 am via webReplyRetweetFavorite

@ACI_EUROPE

ACI EUROPE

• Driving revenues and engaging customers in-flight – presentation from Airline Retail Conference #arc2012
• Airlines 2.0: Using technology for branding through the recession – webinar slides
• Thai Airways get hands on social media training to drive brand strategy for the airline
• Results oriented social media strategy for airlines and airports – keynote from Navitaire Customer Summit
• [Presentation] How airports can track passengers, throughout the Evolving Traveler Life Cycle

Hope you enjoy this infographic as much as the one we had previously shared, about how travelers use mobile while during the journey.

• The Always Connected Traveler – how mobile will transform the future of travel [Infographic]
• [Infographic] How travel marketers calculate ROI on social media and why the future is mobile
• Eezeer and SimpliFlying launch airline monthly twitter report – Delta leads Twitter use, and customer service is in!
• The essence of SimpliFlying, in an infographic. Introducing the coolest About Us page in the industry!
• [Exclusive Videographic] How airlines dedicate resources to social media marketing

Airport shopping – a box of chocolates!

Nothing sells more than chocolate at Changi Airport! In 2010, 4.5 million boxes were sold – that’s more than one box per resident in Singapore! Most purchases were made by Americans, followed by Indians, Japanese and Indonesians. Now that can come in handy if you’re trying to design your airport retail-mix catered to mostly Asian travelers – get lots of chocolate shops!

Traditional Asian gifts, such as Tiger Balm, Nonya dumplings and Kueh Lapis cakes also proved popular.

Enjoy the infographic!

(Click here to zoom in)

• [Presentation] How airports can use social media to drive retail
• How Singapore Changi Airport has created the most lovable airport brand in the world
• Airports in social media – driving results and the road ahead. Presentation from ACI Airport Exchange, Abu Dhabi
• Top 10 Airports on Social Media – case studies of the airports best at driving engagement
• Driving revenues and engaging customers in-flight – presentation from Airline Retail Conference #arc2012

Such is the flexibility offered by Amadeus technology with its Affinity Shopper platform, which Lufthansa and Croatia Airlines are currently piloting. Rather than searching the familiar pattern of flights and dates, customers search for experiences—essentially putting in any criteria into the search and having the best options that meet that criteria populate in a completely bookable form. That could mean searching for a warm, sunny beach with moderate humidity, or a place where you can watch live theatre and a sporting event in the same afternoon, or a countless number of other creative search inputs. “We really want to change the user experience when it comes to booking,” Lacroix says. “The idea was to rethink the way people search for flights. I know Lady Gaga is touring in Europe and I’m in Nice, so where can I go see Lady Gaga?”

While this type of search capability is certainly game changing for online shopping, technology alone doesn’t make the experience. As Susan Kidwell, Amadeus’ head of Global Strategic e-Commerce Consulting points out, the customer experience comes down to how an airline includes technology to enhance the entire customer life cycle—from inspiration, shopping and booking through pre-travel, travel and post-travel. “You have to incorporate this kind of technology into the customer’s experience and expectation,” Kidwell says. “You can’t just show them flight results—you need content that talks about the destination and social media tools that offer reviews and insights. You need to integrate social and mobile into that technology.”

The Quick Integration of Mobile

Mobile was another major theme at Amadeus’ 18th Airline e-Commerce Conference held in Cannes, France last week. One of the highlights of the event was a study released by Amadeus in conjunction with Norm Rose, President of Travel Tech Consulting, that discusses how mobile integration will transform the travel experience moving forward. “What we’re going to see is much more of an interactive environment, that will be both personalized or situationally relevant as well as location-sensitive,” Rose said. “The airlines are starting to realize that and selling some of the ancillary services they have online and getting them on mobile.”

Rose feels that the airlines seem to have the ancillary penalty fees, such as baggage, down to a science, but are missing a huge opportunity by not using the ability mobile technology enables them to offer customers things of value wherever or in whatever stage of the travel experience they happen to be. Airlines will soon, he predicts, be in a rush to integrate these value-added services like priority boarding, seat assignments and other experience-enhancing options into the mobile space.

What is Missing

They say that you can lead a horse to water, but you can’t make it drink. And despite the technology that is currently available, airlines still seem to be struggling to embrace some of the tools that, according to Amadeus, are available now. Jerome Letissier, Director of Marketing and Portfolio Management for Amadeus’ Airline IT group, kicked off the conference with a very clear message to airlines that the first step to adapting to the new customer environment is to adopt what is currently available to them—some of which “can have a huge impact on customer satisfaction and revenue.” Letissier attributes the airlines’ collectively slow adoption practices to limited IT resources—being busy with bigger operational items like departure control systems—and the silo structure that makes it extremely difficult to implement initiatives that impact multiple areas, from marketing to e-commerce to sales to revenue management.

Eloi Prado de Assis, TAM Airlines’ Sales and Marketing Systems Manager, agreed to some extent, but added that there is also a consideration given to the customer, so that a technological change impacting one area does not create an unrealistic expectation for another part of the overall customer experience. “There is a certain set of processes that already exist in an airline, so it’s hard to make a change happen—you have to change an entire series of processes in order to accommodate the new technologies,” he said. “It’s not just putting up a new website. You also have to change your check-in, your call center, and every other part of the customer experience so that they experience the same change from the web through the end.”

The Speed Premium

Regardless of when exactly experiential search mechanisms and value-added mobile options become mainstream, the Amadeus conference certainly gave attendees a taste of what to expect on the horizon. With integration being the common theme to every technology discussed, speed is at a premium, and Lacroix even went so far as to give airlines hope that their search mechanisms can become faster than Google. “Whatever you do, you have to do it fast, and that’s why we are very much focused on building speed into our technology,” he said, stating a goal to shave the entire two- or three-minute search process down to seconds, and the actual results return time upon clicking down to milliseconds.

“The customer experience is what is going to allow airlines to differentiate themselves,” Kidwell added. “Airlines all want to differentiate themselves, and we need to provide the technology to be able to do that.”

See the full interview with Jerome Letissier below, with links to the other SimpliFlying interviews from the conference following.

Click here to view the embedded video.

Denis Lacroix, Amadeus

Susan Kidwell, Amadeus

Norm Rose, Travel Tech Consulting and Dominic Carvalho, Amadeus

Gwen Robinson, CityJet

Andrew Miller, CAPA Consulting

Eloi Prado de Assis, TAM Airlines

Mike Slone, Vail Resorts

• The Always Connected Traveler – how mobile will transform the future of travel [Infographic]
• [Infographic] How mobile is re-shaping travel distribution (gasp!)
• [Presentation] How airports can track passengers, throughout the Evolving Traveler Life Cycle
• Now, Pegasus Airlines creates an irresistible safety video, featuring cute Turkish kids
• The future of airline marketing in 2011: key takeaways from IATA Commercial Strategy Symposium

—–

The latest study from Ideaworks, sponsored by Amadeus; shows that airline ancillary revenue is on the increase, up 45% on last year to €11 billion ($13bn), and that in order to be in the top 10 ancillary revenue generators an airline must drive €300 million in ancillary sales. Airlines cannot afford to ignore the rapid development of this trend but strategies to take advantage of ancillary revenue will need to vary according to each airline’s brand positioning, and this involves careful decision-making.

Unbundling translates into cash

As can be seen from the graphic above, LCCs have moved full steam ahead with unbundling, selling exit-rows, extra legroom and priority boarding. However, the story of the last couple of years has been the entry of the U.S. majors – United and American now generate around €1.5 billion each. Even Singapore Airlines has started charging up to $100 for exit-row seating on their long haul flights.

There are compelling reasons for an unbundled market position:

1. Unbundling enables completely new revenue streams as customers select services ‘a la carte’
2. In the world of price-centric internet searching, airlines are under pressure to advertise a low base fare
3. An unbundled approach enables greater customer choice, although airlines need to ensure transparency to avoid confusing and misleading their customers.

To unbundle, or to preserve the brand?

For airlines that have built brands on premium service the decision to impose charges is a big one. Emirates, for example, is resisting the trend and even Southwest airlines has bucked the LCC tendency by not charging for baggage fees. If an airline opts for this approach, it is essential that customers are informed at every point of sale because consumers are beginning to expect baggage fees and additional charges.

What’s certain is that brand consistency is a must. If an airline’s offer is unbundled in one channel but not another, the resulting customer confusion will hurt sales and defeats the object of brand differentiation. This requires careful thought and the integration of ancillary services within the selling process, including the travel agent booking flow in order to drive adoption.

Another potential brand and revenue pitfall is delivery –it is one thing to sell a service, quite another to ensure it is delivered, on time, every time. Imagine if there is a disruption and customers are moved to a smaller plane with less exit-row seats, but the airline has already sold too many! Issues such as this require planning upfront.

Integration with an airline’s CRM and revenue management system also help to track and operate ancillary services according to customer value, whilst ensuring maximum revenue capture.

At Amadeus we are working with airlines of all shapes and sizes to deliver ancillary revenue strategies across multiple channels and in line with industry standards.

Editor’s Note: Horses for courses

While the dilemma for choosing between unbundling to drive ancillary revenues or to preserve the brand is a very real one, the best solutions would be customized to individual airline’s specific needs.

For example, while almost every airline in the US is charging a bag fee domestically, Southwest has made it a competitive advantage by not charging one. Similarly, Delta Airlines charges a bag fee for domestic sectors, but none on cross-Pacific flights. Because no other competitors do. It’s horses for courses.

So, what do you think? How far can airlines push the un-bundling argument before seriously compromising the brand, hence loyalty? Let’s hear it in the comments, or over on Twitter (@simpliflying)

• Ancillary revenue: A boon or a bane for the airline brand?
• Ancillary revenues and airline branding Special in March at SimpliFlying
• Low cost airline brands get creative with ancillary revenues – lounges, shops and cargo!
• King of ancillary revenues, RyanAir offers €1,000 for best idea on making money!
• Ancillary revenues and airline branding webinar slides (with video!)

In fact, there’s been ample debate already, with the queen of in-flight entertainment (IFE), Mary Kirby, concluding that it’s a fad, even as the CIO of JetStar, Stephen Tame was quoted as saying that the iPad “may lead in the future the end of airline in-flight entertainment systems”.

Why does the iPad matter for airlines?

It matters because no longer are mobile devices limited to small screens only centimeters wide, with the iPad. Combine that with the advent of in-flight wifi and we’re talking business.

I’m not talking about every passenger carrying on-board an iPad. That’s probably not possible. At least not very soon, and not across nations. What I’m suggesting is that it might be a good idea for airlines that do not have personal in-flight entertainment systems installed, to consider buying iPads to rent them out to the passengers.

iPad re-defining in-flight entertainment – both for legacy and budget airlines

Imagine sitting in the middle seat of a Boeing 747 for 11 hours from Los Angeles to London, with no personal IFE? Sounds archaic right? But a lot of leading airlines like KLM, Iberia, American and United still do not have personal IFE and I do not foresee them equipping their planes with one, until the new planes arrive. Which is still some years away. Offering the iPad option in these flights can be a competitive advantage for  legacy airlines.

For budget airlines around the world, most of which have a new narrow-body fleet, which is not equipped with IFE. These stand to benefit the most from the iPad. Just buy some, and start renting them out!

Airlines that do this have the potential of skipping a generation of IFE systems, and do away with the installation, wiring and maintainence of these systems. Think about the cost savings from less fuel-burn due to the lack of “installed weight” carried during each take-off and landing. That in itself can amount to millions per year in savings, per plane!

How to keep content fresh for iPad IFEs? Think ancillary!

I know one of the key aspects of IFE is having fresh content. And most airlines with a good IFE system update their content at least once a month now. How does that happen for the iPad?

For starters, I personally think that by the time an airline starts offering iPads to its customers, it would already have its planes wifi-equipped. And then, airlines can offer syndicated content on the iPads over wifi. If this seems to cumbersome, or if it slows down how about allowing passengers to pre-book pen-drives with the latest content? May be they can even customize the content. So when they board the plane, they’re given an iPad along with the pen-drive with their customized content. And all this can drive revenue too.

Budget airlines can have offers to rent the iPad + wifi + power outlet, or iPad + Content on pen-drive, or the whole package. This can range anywhere from $19 for short haul flights, to $49 for long-haul. Legacy carriers can include some of these as freebies for frequent fliers and Premium travelers, and charge for the rest. Makes sense, right?

iPad for check-in!

Another good use for the iPad is for check-in! How about doing away with all the e-check-in kiosks and just having iPads plugged into power outlets, for checking-in passengers? May be roving “queue-busters” can personally approach passengers lining up with iPads, to speed up the process. This is something similar to what Indigo Airlines already does.

If this sounds too far-fetched, then how about just the fact that with the iPad, more passengers will be able to use a mobile boarding pass, and not a paper one.  This is something major airlines like Continental and Lufthansa already do, so the barrier to adoption is reduced.

iPad for the pilots and ground staff

Lastly, another use for the iPads in airlines is behind-the-scenes. As the Tweet from Pluna’s GM below shows, thick manuals can be eliminated from the cockpit and replaced with iPads. This is especially true for airlines that don’t already use e-flightbag in their cockpits. Again, a leap ahead of time. And even the ground-staff can be equipped with iPads, from check-in counters to boarding gates. Eliminating the need for fixed kiosks.

How to get started? (and get a promotion)

Work for an airline? Now that you know of some ideas on how the iPad can help airlines, why don’t you use these to go get a promotion? I’m serious!

If you’re an Apple-lover working for an airline, how about putting a 4 page business plan together, entitled, “How the iPad can help our airline save $XMn and make $Xx Mn, per day!” Just split all the cost-side and the revenue-side aspects discussed above and put some numbers behind them, and present it to you boss and senior management.

It’s not as difficult as it sounds. For example, for the cost-side, figure out how much fuel it takes per additional ton of weight, per flight. Then multiply that by the approximate additional weight of IFE systems and wiring, which can be removed if the iPads come into play. And that’s your cost saving per plane, per take-off and landing. Multiply that by the number of rotations the plane does per day, and wallah – you have your magical number!

If you’re the first to present this plan to your airline, and it gets adopted, don’t you think you’ll be promoted to lead the project? Or at least play a strong role in it?

In conclusion, I don’t think iPad will replace IFE, or kill IFE, but be a strong complement, with a number of airlines just going iPad-only. Frankly, I can’t wait to board the first iPad-ified airline. It will not only be a competitive advantage, but it’ll also be something that makes+saves money, and make that airline the coolest brand in the world.

What do you think? Is the iPad a fad? Or does it have any real potential to challenge traditional IFEs? Let’s here it in the comments and on Twitter (@simpliflying)

• The Future of Personal Wireless IFE – in the age of the iPad
• Lufthansa’s CloudStream carry-on solution allows you to read SimpliFlying in-flight
• Why the in-flight wi-fi business model needs a re-think (Hint: airlines can learn from airports)
• Virgin America’s online community – bull’s eye, or a flop?
• Five reasons why budget airlines in Asia are successful

RyanAir is known for being creative about ancillary revenues. We all know about the much-discussed toilet charge. But did you know that RyanAir has recently opened a new lounge at Stansted Airport? For under 18 bucks, you get breakfast, wifi, sofas and even showers before you board your flight. And the lounge has received some rave reviews as well.

Now this is a sort of service I’m sure many wouldn’t mind paying for – because it’s value-added charges, not charges for un-bundling, as is generally the case.

AirAsia has a shop in a mall in KL

Forget about in-flight shopping – that’s old school and increases the aircraft’s weight. AirAsia now has not one, but two “kiosks” in Kuala Lumpur. One is at the LCCT itself, and a new one has come up at Pavillion Mall. They promise even more outlets soon! Here, you can buy AirAsia merchandise like plane models, t-shirts and even hand-bags.

I wonder what’s next for AirAsia – a restaurant in downtown Kuala Lumpur serving their legandary teh tarik and Nasi Lemak? You can’t rule anything out.

Tiger Airways and Kingfisher go big on cargo

After skirting the issue for many months, a number of airlines are entering the cargo space to drive up non-passenger revenue. Tiger Airways in Singapore is testing the cargo service on a number of South East Asian routes. Kingfisher from India has gone all the way and started a separate cargo division!

But aren’t cargo levels still very low? Isn’t that still a loss-making operation for legacy airlines? Well, it seems that re-bound is near. Tiger Airways went on record to say that they’re adding this function specifically to drive ancillary revenues.

Rosalynn Tay, managing director, Tiger Airways Singapore, said: “We have just started our cargo trials and the reason for that is it is … an ancillary revenue stream, plus it helps us to optimise our profitability and aircraft utilisation.

Why creativity is good?

So what’s common about the three new methods of generating ancillary revenues that I mentioned? The passenger doesn’t need to pay more for something he was already getting. Most of the services being offered are value-added. They bring revenue for the airline, without inconveniencing the passengers.  And that means the brand is not affected negatively.

If anything, the passengers will be pleased, like with the RyanAir lounge at Stansted and the AirAsia shop in the KL mall. And that only helps the brand impression.

What do you think? Will this work? What are some other examples of airlines getting creative in trying to drive revenue, yet not hurting customer sentiment? Let’s discuss in the comments section, and over on Twitter (@simpliflying)

• Ancillary revenues and airline branding Special in March at SimpliFlying
• AirAsia X: a brand with a huge potential, but remember, “you’re only buying the flying”
• Ancillary revenue: A boon or a bane for the airline brand?
• Brand essence of Malaysia Airlines – experiencing Malaysian Hospitality
• Driving revenues and engaging customers in-flight – presentation from Airline Retail Conference #arc2012

—–—–—–

“ETIHAD may charge for second piece of luggage”

This  was a remark made by James Hogan Etihad’s CEO, otherwise I would have thought it was a joke. Why would an aspiring and highly branded airline with cash flushed owners want to do something like this?

Etihad operates in a highly competitive and well connected market, whether it is the UAE, MENA or the Indian subcontinent. The traveling public (both Arabs and Indians) in the region is traditionally price sensitive and is used to weight and not number of bags. It is basically a visit friends and relatives (VFR) market used to carrying gifts and shopping across continents, bags and sacks of them.

So price sensitive, just look at the number of LCCs and quasi LCCs in the GCC alone  (Air Arabia, FlyDubai, Jazzera Airways, nasair, SAMA and Bahrain Air) that have started in the last 5 years. There are rumors of another LCC in Abu Dhabi and Qatar Airways intimated that they may set up one to compete in that segment. Even legacy carriers compete on price, at the peak of the summer season an extra ten (10) kilos of free excess baggage may be the only price differentiator.

Currently and among legacy carriers, the least expensive tickets are probably on Qatar Airways. So as long as you are not in a hurry and do not mind transiting through Doha for a few hours, then you are in luck. And, this is a highly branded airline too.

At a time when carriers in the region are restructuring (Gulf Air) or have joined alliances (Royal Jordanian and Egypt Air) or are rebranding (Saudia and Oman Air), and faced with stiff competition from two of the most branded airlines in the world (Emirates and Qatar Airways), I fail to see what Etihad hopes to achieve.

It seems airline branding does not include economy class. And this is a sad situation indeed.

What do you think? Is it a good idea or a bad idea for a premium Middle East airline to charge a bag fee? Will they lose customers? Let’s hear your thoughts in the comments and on Twitter (@simpliflying)

• What does 2010 have in store for Middle East airline brands like Emirates, Etihad, Qatar Airways and others?
• Gulf Air and Kuwait Airways up for sale – do the brands stand a chance?
• The future of Middle East Super-Airlines: Emirates and Etihad to merge, and Qatar to join an alliance
• How airlines in the Middle East are enhancing brand value through their frequent flyer programs
• King of ancillary revenues, RyanAir offers €1,000 for best idea on making money!

• Singapore Girl – you’re a cheap way to fly…or are you? Making the low cost Singapore Airlines brand work
• Driving loyalty for low cost airlines – presentation from Low Cost Airlines World Asia Pacific
• Ryanair’s New Fee To ‘Check In’ & The Real Cost Of Some Low Cost Carriers
• Five Reasons for low cost airlines to take loyalty seriously
• LCC 2.0: How low cost airlines can use social media to engage their customers