The Rise of the Ungrateful Traveller — and Five Ways for Airlines to Still Flourish
Editor’s Note: This is the second of a two-part exploration of the fraught relationship between the modern traveller and airlines — and the paradox at the heart of their relationships. Today’s connected travellers are quick to outrage and even quicker to grab the cheapest fare. On the other hand, airlines must appease them, offer competitive fares, and not water down their product or services — and, of course, turn a profit. How can airlines appease the ungrateful traveller? Read the first part here.
If you look at it logically, you have to feel a little sorry for legacy airlines. Traditionally razor-thin profits are being driven even thinner by increasing competition — both from middle-eastern carriers and low-cost carriers. On the other hand, perhaps dazzled by rock-bottom low-cost fares, travellers are increasingly price-sensitive and purchasing airline tickets based on price alone. (Not least because a large share of travellers today are from price-sensitive developing Asian countries where a middle-class boom has enabled a new traveller demographic.)
Moreover, as low-cost airlines such vie for a share of business travellers’ share of wallet, legacy carriers are being driven up the wall in pursuit of profits — and relevance.
Last year, Gulliver, The Economist’s travel blogger, wrote:
“…the reality is that customers are effectively demanding worse service. While we might say in surveys that we care about quality, when it comes to clicking the button to purchase a flight, we overwhelmingly choose an airline on price. And so carriers do everything they can to give us what we want: cheaper fares over a pleasant experience.”
A couple of weeks ago, Gulliver was back with another development:
“Now there is a new class, a cut below standard economy. Please welcome “basic economy”, known to some as “last class”.
Delta was the first big airline to introduce basic economy, and it refined it last year as one of its five fare classes. Now United and American have both announced that they will be debuting their versions of basic economy later this year.
So what is basic economy? For frugal travellers, it’s shorthand for giving up some of the few remaining comforts of flying economy.”
However much you might wish to rant against a perennially dropping passenger experience, it is true that customers have been at least partly responsible for this change. The trouble, of course, is that as a brand you cannot pin the blame on customers.
Instead, airlines, in their pursuit of profits must focus even more on five key pillars:
- Branding: If a lower than economy class is indeed being offered, the least airlines could do is focus on branding it and stating who it’s for. Remember why Ryanair works? Because its value proposition is clearly tied to its brand.
- Communications: Instead of sneakily slipping in new changes to the product (which looks suspicious anyway) airlines should look at preparing in advance for media coverage and combating customer backlash. In fact, getting on-board customers who would benefit from that particular product class, and tying it with their personal stories, would help as well e.g. students on a shoestring budget.
- Customer service: A denser, and in some ways, an inferior product is inevitably going to see complaints coming in, perhaps at a larger volume. Prepare in advance to offset this possibility and to skillfully handle these complaints when they arise.
- In-Flight Wi-Fi: Now, more than ever, in-flight Wi-Fi can become the get-out-of-jail card for airlines. Studies indicate that passengers would endure a poor product if there’s free Wi-Fi.
- Operations: Remember the Air Canada baggage throw viral video? The key lesson from that wasn’t that someone on ground acted irresponsibly — it was that the new seat configuration added about 90 more seats which added more pressure on the cabin. Hence, an increased number of gate check-ins. Has your airline considered that its operational process flows must be refined before product re-jigs?
In a number of ways, brand management — perhaps lessons from Ryanair would be handy? — has become even more crucial.