Industry has to get the basics right before ‘focusing on the gizmos’, business travel is the ‘crown jewel’ and we are all getting ‘too excited about data’ – insights from the CAPA Airline Leader Summit

It’s hardly a secret that the airline industry is facing myriad challenges, notably in the marketing and distribution areas, as companies with personalised data, and the analytics and artificial intelligence to go with it, become greater threats to the stability of the traditional airline model.

CAPA – Centre for Aviation attempted to address those questions with its Airline Leader Summit, which had more than ten hours of agenda content designed to provide key learning, observations and real insights on the aviation, travel and hospitality sectors. The main summit theme this year was “Airlines making money: a vision of the future”, with the underlying theme of disruption and change.

Here’s some more insights and observations from delegates during the event at the Powerscourt Hotel Resort & Spa in Enniskerry, County Wicklow, to the south of Dublin.

CAPA chairman: US carriers ‘are like millennials, they like to stay at home’
CAPA – Centre for Aviation chairman emeritus Peter Harbison stated US carriers “are like millennials, they like to stay at home”. He argued US carriers’ “stay at home and be profitable” strategy is only a short term one.

Ryanair CMO: Reliability trumps performance from the passenger perspective
Ryanair chief marketing officer (CMO) Kenny Jacobs stated there will be “plenty of airports in Europe” in summer 2019 with on time performance below 80%. The most important thing for passengers is reliability and on time performance, he continued, despite what airlines offer as part of ancillaries.

Norwegian EVP strategic development shifting focus to profitability after years of ‘crazy growth’
Norwegian Group EVP strategic development Tore Østby stated the group plans to “change its focus from growth to profitability” and “tighten the network” following years of “crazy growth”. He says there is a “focus on profitability and cash flow” and a “continuous effort to reduce costs”. The airline is now working with an “optimisation of the base structure and route network based on 12 month profitability criteria” and will “divest aircraft not required for the company’s commercial needs”.

Microsoft global employee experience: Business travellers organised into ‘three buckets’
Microsoft global employee experience lead Julia Fidler stated “there’s no reduction in the need for face to face”, but rather much more focus needs to be made on changing ways to engage with passengers. “Business travel pretty much remains within the three buckets: those cost focused, those points focused and those experience focused”, she argued.

Volantio CEO: Loyalty about ‘how a brand makes you feel’ rather than ‘points or miles’
Volantio CEO Azim Barodawala argued that creating loyalty entails “how a brand makes you feel” rather than whether or not a passenger has earned a certain number of miles within an FFP. “It is much more about how a brand makes you feel through the experience. That is going to be much more memorable than points or miles”.

LOOK OUT… Exclusive executive interviews from the event will be published on CAPA TV in the coming weeks, as well as full coverage of the agenda sessions.

Air China VP and GM North America: Biz travel the ‘crown jewel of our business’
Air China VP and GM North America Dr Zhihang Chi stated business travel is the “crown jewel of our business”, however it is currently “very screwed up” due to a saturation of intermediaries.

CTM global CCO: Data, technology ‘really drive different things’
CTM global CCO Laura Ruffles stated while service is important, technology, information and data “really drive different things”. She stressed it is important to “look beyond the price” to create more efficient travel and allow people to make better travel decisions by using different forecasting technology.

Saudia: Industry has to get the basics right before ‘focusing on the gizmos’
Saudia VP sales Richard Nuttall commented on the declining value of FFPs, arguing they have “devalued a little bit” in the past 10 years. The greater challenge is “getting the basics right”, he said, adding a lot more work has to be done in this area before “focusing on the gizmos”.

Lufthansa Group: FFPs ‘pretty important’ however new tech reshaping customer expectations
Lufthansa Group manager passenger experience design Ole Lindner commented on implications of FFPs as a decreasing indicator of loyalty. He said FFPs are still “pretty important”, however in the last 10 years new technologies have created new solutions that shape expectations of customers and their buying behaviour.

easyJet head of proposition: ‘Having customer insight is key’
easyJet head of proposition Kim McDonnell said the challenge is making ancillary revenue less “annoying” for passengers. It is important to be completely customer centric and understanding of what consumer needs to fulfil, she argued, stating: “Having customer insight is key”.

Ryanair CMO: Airline industry ‘too excited about data’
Ryanair chief marketing officer (CMO) Kenny Jacobs stated the industry is “too excited about data”. “We don’t have as much data as retailers do”, he said, arguing what’s important is how and when to use data that is available for airlines.

Norwegian EVP strategic development: 50%-60% of pax use feeder operations to connect to long haul
Norwegian EVP strategic development Tore Østby stated 50%-60% of passengers use the carrier’s feeder operations to connect to its low cost long haul network. The carrier plans to interline long haul operations and will continue to use feeder traffic from Widerøe.

MORE INSIGHTS…
CAPA – Centre for Aviation members were able to see live updates from the CAPA Airline Leader Summit and have access to over 100 briefs from the event. Find out more about how a CAPA membership provides a front row seat to global aviation news, analysis and data as it happens, with access to a comprehensive suite of tools that can be customised to your needs.