It’s been a whirlwind of excitement here in Istanbul at the Future Travel Experience Ancillary Conference. Based upon the panel discussions, it seems evident that airlines around the world are facing similar challenges with regards to growing ancillary revenue and improving customer service. Over the two-day conference, we also learned that many are dealing with these challenges in similar ways. Here’s what we overheard.
Top challenges for airlines
Personalization at scale
It’s important to be personal and relevant - to use what you know about the customer to create a unique experience and discover where the airline can make a difference in their journey. Airlines need to do better to ensure that each passenger's individual personal preferences are at the center of the booking flow.
Creating unique experiences
Airlines are heavily invested in the ability to leverage data to produce excursion/product offerings that have a higher likelihood of conversion. Customers will be thrilled not to have to scroll through masses of information, This also benefits the business, since conversion rates are higher.
Dealing with the competition
Amazon and Google are tech companies, not airlines - and yet they are encroaching on the airline industry. While they may appear to have different priorities than airlines, they share one important one - providing customer-centric service? Tackling these tech giants head on might be an impossible dream but airlines have an advantage when it comes to traveler data they already have. Perhaps the future will see airlines collaborating and sharing data with tech companies to offer more unique travel experiences. But let’s not forget that airlines (on top of all that traveler data) have a captive audience, so consider that a competitive edge (at least for now.)
Personalization is the key to customer engagement, and can produce significant ROI. So many panelists agree that airlines need to be at the forefront of personalization in travel. They need to invest in their talent and their customers to make that happen. And also be positive and proactive: take advantage of what they have; and focus less on what they don’t have or can’t do.
Getting more from relationship with OTAs
Airlines might consider working with OTAs to coordinate information about what the passenger is actually getting for the fare they’re paying. This can allow airlines to cross sell ancillaries to improve the experience and provide a more meaningful service to their customers.
“Ancillary growth is imperative for all airlines, and digital is the great enabler to achieving that. However, many new collaborations must be forged between stakeholders to deliver the passenger the right offer at the right moment to enhance customer experiences and increase profitability at every stage of the passenger journey.”
-Juha Jarvinen, President, APEX Board & EVP Commercial, Virgin Atlantic
Opportunities on the digital front
A big question that came up was, “should airlines concentrate on traditional ancillaries or open up to other digital experiences?” The response from many was a resounding feeling that airlines need to make digital transformation a priority within their organization - beginning from the top, through the staff, and ultimately inclusive of the passenger experience. But despite the need to go digital, airlines shouldn’t feel compelled to implement technology simply because it’s trending. Digital tools like Chatbots, AI, and AR, bring many advantages, but they shouldn't jeopardize traditional revenues and successful service approaches that have worked for airlines in the past.
That being said, many believe that airlines should be updating and enriching their website and mobile direct channels to encourage better engagement and brand loyalty. Airlines need to achieve parity across all platforms to ensure consistency of product offerings and information (the purpose of the NDC). But while many believe that the NDC won’t revolutionize the industry, it should nevertheless help to more easily share information across all channels and to get into every distribution channel in a standardized way. This can ultimately lead to efficiencies and achieve a customer-centric approach to travel service.
Change is in the air
Airlines should consider their similarity to other types of retailers. Retailers can change their entire strategy and appearance regularly (in both digital and brick-and-mortar environments), however airlines tend to be unwilling to make big changes. So consider the the example of the “new drugstore." It not only offers medicine, but now it also offers food, clothes, electronics, etc. Can airlines learn from this and achieve a similar outcome?
In the end, there was an overall feeling of potential growth and hope at this year’s FTE Ancillary conference. Despite the challenges that carriers face, change is possible. However, airlines need to partner with the best technology companies in the industry to develop strategies to offer relevant content and ways of distributing it. This is part of what Guestlogix brings to our business partnerships.
Leave a comment below and tell us what you think about these trends and insights.