Why Airline Retailing should be a priority right now!
Airlines in these unprecedented times are confronted with enormous struggles to protect their core business. Most often this means to focus on cost-cutting and innovative methods of rescuing revenue generation wherever possible.
Even though these struggles from the coronavirus pandemic are still in full swing, it is crucial to prepare for a post-pandemic market situation. On the one hand, it is to be expected that airlines under financial pressure will fight for every customer using attractive pricing and thus might be driving profits bottomwards. On the other hand, throughout the pandemic, airlines have significantly adjusted capacities using temporary and permanent measures and have done their utmost to provide the most attractive schedules for the remaining travel demand.
Given both effects, it could happen at a certain time that demand starts to exceed the available capacity and thus price levels will most likely rise. If demand kicks in too quickly, it could happen that demand on certain routes unexpectedly exceeds the offer on the route by far, generating a sawtooth development.
Reflections of this type are rooted in a perspective that only focusses on availability, price, and schedule. Such a perspective neglects that the customer – as the most important resource for recovery – is more than a person in a seat but rather a personality with a need. The pandemic teaches us that discounts are limited in stimulating travel if customers fear to travel amidst a global pandemic.
Neglecting airline retailing in periods when the focus on cost is the predominant strategy is understandable at the first glance, but it prevents airlines from making the right investment at the right time.
Looking into the future we can expect demanding customers knowing that airlines are in need of every traveller. In such a constellation, a quality competition is likely to happen. Again, it is easy to fall into the trap of thinking that quality is decided solely aboard the aircraft or at the airport.
Especially with the digital boost induced by the pandemic, digital quality as perceived by the customer is of utmost importance: How is my user experience on an airline website or other airline touchpoint? What choices are offered to me? Are features offered that help me to improve my travel experience? Is the digital offer creative and inspiring? Are there modern, state of the art product offers that match my online experience elsewhere in the internet?
To address this, it is now time to focus on airline retailing. Not to change the world now. But to be prepared to differentiate the airline offer once we see tendencies of demand coming back. If returns quickly, a high-class retailing experience could help an airline to recover from the financial impact of the pandemic. If demand comes back slowly, differentiation is needed more urgently than ever, especially if an airline facing additional debts is no longer acting from an unparalleled cost position.
The biggest struggle very often lies in setting up a consistent offer structure from a customer’s point of view. This needs time for development, and therefore should start now. Only if this strategic step has been implemented, it is possible to lever new technologies, e.g. the NDC standard, to really help the airline industry in these times.
If you need support in taking the right steps right now, please do not hesitate to reach out to UNEX – with our experience in airline retailing we can help you to build consistent and innovative offers with a focus on modern distribution.