What are the key ingredients in matching product with market needs? Is it Customer service, reliability, prices, connectivity? These are all essentials, but they often find themselves competing for priority. In today’s online world, a seemingly inevitable pricing race to the bottom often characterises airline strategy. Pricing is frequently the most prominent feature for consumers and, for airlines cost reduction is continually a strategy driver. This makes catering to the corporate and business traveller a challenging proposition.
How good are the airlines at meeting these challenges. Can they do better? CAPA – Centre for Aviation, executive chairman, Peter Harbison moderated an airline panel discussion at last week’s CAPA-ACTE Global Summit entitled ‘Can airlines deliver what corporates want? ‘.
Here’s some of the insights delivered by the panellists during the session…
Finnair, CCO, Juha Järvinen
Corporate customers and loyalty ‘doesn’t always go hand in hand’
Corporate customers and loyalty “doesn’t always go hand in hand”. Mr Järvinen said the airline offers benefits and data to corporate consumers, who want “easy solutions” to cater to a “lack of time”. Mr Järvinen concluded corporate customers can “never… have too much choice”.
Aims to appeal to ‘young and affluent’ in Beijing, Shanghai
The carrier is aiming to appeal to the “young and affluent” in Beijing and Shanghai. Mr Järvinen stated “we need to be relevant to them”, adding he believes China is more advanced than both Europe and the US in mobile technology. He said the customer segment expects to be connected throughout the journey, a factor in the carrier’s decision to roll out WiFi on its entire long haul fleet as of May-2017. As previously reported by CAPA, Finnair also commenced offering Alipay as a payment method for onboard services on Helsinki-Shanghai route since 27-Jan-2017.
Technology enables the airline to serve different cultures
Technology enables the airline to serve different cultures. Mr Järvinen cited customers based in China as an example, commenting: “we have to be on the Chinese [social media] platforms”. As previously reported by CAPA, Finnair launched a chatbot for Facebook messenger in Sep-2017, and plans to roll out Chinese language functionality on the system by the end of 2017. The carrier also wants to implement Finn on other social media platforms such as WeChat in China.
Flybe, CEO, Christine Ourmières-Widener
Flybe continues to work with Virgin Atlantic towards ‘seamless’ pax handling
The company continues to work with Virgin Atlantic towards “seamless” passenger handling. Ms Ourmières-Widener stated the ongoing joint effort must be reached step by step.
Flybe has ‘very short’ average sector length of 53mins
All airlines aim to form a network catering to customer needs, however there is a growing urgency to consider what customers seek in corporate travel. Ms Ourmières-Widener emphasised Flybe’s “very short” average sector length of 53 minutes, stating on time performance is a top priority for the carrier and top expectation from customers.
PricewaterhouseCoopers, senior director, travel & meetings and treasurer of ACTE board of directors, Lori O’Connell
Improvements for corporates over last decade by airlines
Airlines have achieved a wide range of improvements for corporate customers over the last decade. Ms O’Connell said corporates are hopeful for airline profitability to be reinvested in experience, relationship with corporations and to move beyond commoditisation of air fares for “truly commercial features” to be added.
A ‘huge opportunity’ for ancillaries for corporates
A “huge opportunity” lies in airlines being able to offer three or four ancillaries out of a dozen to corporate customers, depending on predicted preferences generated from airline loyalty data.
Airline experiences differ online, via apps or when checking in
Emphasised the importance of creating an overall “seamless” experience for customers. Ms O’Connell stated the reality is a “mixed bag”, stating experiences differ online, via apps or when checking in.
Commercial apps are ‘far superior to what we’ve seen in the corporate side’
Commercial apps are “far superior to what we’ve seen in the corporate side”. Ms O’Connell said corporate customers are seeking an “integrated experiences”, with one point of contact or portal connecting directly to other places. She said current processes are “fragmented, cumbersome and clunky”.
Virgin Atlantic, CEO, Craig Kreeger
Technology to ‘change the way customers interact with our airlines’
Innovation in the airline industry was “evolutionary up to now” and is likely to continue on that path. Mr Kreeger believes innovation will emerge in the form of upgrades. He used Virgin’s WiFi offering as an example, which has moved from using ground based systems to satellites. Mr Kreeger also expects using technology to “change the way customers interact with our airlines”, instead of only “physical product innovation”.
Innovation is not synonymous with technology
Emphasising innovation is not synonymous with technology, Mr Kreeger said airlines continue to seek differentiation to enable better delivery for customers, and there are “no limitations on ideas” unlike investment. Mr Kreeger warned technological innovations are sometimes created as solutions “looking for a problem”.
‘Possibility’ of ‘Airbnb or Uber version of an airline’
There is “certainly a possibility” of an “Airbnb or Uber version of an airline” being established, said Mr Kreeger.
Virgin Atlantic conversion to Delta pax platform gives JV ‘greatest shot at being truly seamless’
The carrier’s conversion to Delta Air Lines’ passenger platform gives the JV the “greatest shot at being truly seamless”. Mr Kreeger said the identical platform enables structure, data sharing and the ability to collectively create new experiences.
Discussions with Delta Air Lines on interchanging crew
Regarding interchanging crew on each carrier’s aircraft, Mr Kreeger said the interchangeable crew is likely “at some point”, however added “maybe we’ll have to announce that on some other day”.