Is this the end of the dinosaurs or the rebirth of the aviation sector?
Bailouts and spotlights
I was working on a couple of large airline-related projects in the UAE back in 2008 when the GFC (Global Financial Crisis) hit. The impact was catastrophic for my projects as the airlines ran for cover and pulled the spending on projects, even although they demonstrated savings of multi-millions of dollars a year. A strange reaction to innovative, cost-saving projects.
And here we are again.
I suppose it’s easy in good times to ignore inefficient processes and costly teams, in favour of just continuing to generate revenue and to ignore the impact on profit.
Especially when industry growth has, since the 2008 GFC, only been heading positively upwards, which by the way, the IATA still predicts. But just because airlines were making more than they were spending, it is not a business approach I subscribe to, but I guess I can understand it. Maybe it’s the Scotsman in me coming out, but I want to maximise profits – not waste money I’ve worked hard to earn.
No such thing as bad PR? Wrong!
Having thousands of members of staff, and hundreds of planes flying all over the world every day and night, is great PR from an operational standpoint. However, if the business has expensive and leaky administrative processes behind the scenes, then it’s far from efficient, and needs fixing.
When the world was starting to be impacted by COVID-19 late last year, we were already talking to international airlines about fixing the leaks and reducing the costs of administration.
Even back then, there was a massive amount of negative press and social media traffic about how airlines were failing to consider the needs of passengers when things went wrong, flights were delayed and cancelled. This was in the days when maybe 15% of flights were impacted, and so the problem wasn’t global and it wasn’t major – in the eyes of the airlines at least.
Deliberately making the refund process difficult for passengers is very much a case of “adding insult to injury”.
Firms like Bott & Co. make a good living out of chasing claims for passengers when airlines delay repayment – they charge an administration fee of £25 per claim plus they take 25% of the monies recovered. This adds significant legal costs to the airline and so makes the entire process even more costly and complex.
Surely this isn’t the relationship airlines want with their passengers and the press. Right?
Racing to the bottom or rising to the top?
I’ve been on a number of webinars and virtual events recently and some really smart people have been quoted by equally smart people in the aviation industry.
Some quote Winston Churchill, who said, “Never let a good crisis go to waste.” I love that one.
Others quote John Chambers at Cisco who said, “If you don’t innovate fast, disrupt your industry, disrupt yourself, you’ll be left behind.” Very true and prophetic words for those who continue to dither.
There are two quotes from the late Andy Grove, founder of Intel, who said, “Bad companies are destroyed by crisis. Good companies survive them. Great companies are improved by them.” Addressing the use of technology to improve a manual process, he also said, “Not all problems have a technological answer, but when they do, that is the more lasting solution.”
These all resonate with me and I hope that people in the industry will move away from the continual race to the bottom, on price, which appears to be the default response.
Airlines are still trying to offer cheap tickets to get people flying again, when what passengers really need is reassurance about safety and hygiene.
This represents an opportunity to increase the price of a ticket to include safety measures like; improved HEPA filters, testing and extra hygiene measures on flights.
Ed Bastian, CEO of Delta, was quoted recently as saying, “The customer of tomorrow will place a higher premium on the quality of service than ever before.”
He is absolutely right.
Making things right when things go wrong
In times of adversity, entrepreneurialism thrives.
When our backs are against the wall, there’s only one way to go – forwards. The IATA talks about the timescales to a return to 2019 passenger numbers… but that’s only part of the story. To get passengers back, airlines and airports need to reduce the risks involved in catching COVID-19 while flying, add value to the passengers’ experience and fix the broken processes that cause brutally negative press articles and social media posts.
Long before COVID-19 impacted the aviation sector, we were advocating the automation of the claims process for flight delays.
With the increased scrutiny that comes via Government aid packages, airlines need to address all aspects of their business where efficiency and cost-saving can be achieved.
COVID-19 has confirmed and accelerated that, and Government scrutiny will only add to the pressure to put right all those aspects of the business that were ignored previously.
Next-generation flight delay compensation
RedAir helps airlines to transfer 100% of their liability, reduce volatility and offers a full-service SaaS platform – RedAssist.
RedAssist provides a highly flexible, fully automated and cost-effective solution to claims and payment processing in the event of delays and/or cancellations.
Changing the narrative and the passenger experience starts to add value again and to inspire confidence in passengers to trust airlines to do the right thing by them when things inevitably go wrong.
No-one expects everything to work 100% of the time and so it’s the great experience that we receive when things do go wrong that sets great companies apart from bad ones.
We can help you to be one of those great airlines that improve in the midst of a crisis. Let’s talk.
The SimpliFlying Launchpad curates market-ready technologies and matches them with airports and airlines looking for urgent solutions on everything from sensitisation to contact tracing. Our upcoming track on Customer Experience is in November! Submit your startup here or sign up to be a Corporate Partner if you are an airline or an airport.