Passenger experience holds key to profitability

Passenger experience holds key to profitability

While passengers are reporting greater satisfaction with airlines, FINN editor-in-chief Alan Peaford says constant reinvention and a greater focus on sustainability will be key to their survival

Passenger experience holds key to profitability

It doesn’t seem that long ago that being an airline passenger rightly lived up to the derogatory name given to one of the world’s favourite airlines, “Self-loading cargo.”

Today, even the hard-line no-frills aficionado, Michael O’Leary, has identified that passenger experience and satisfaction is a key part of achieving a profitable carrier. IATA – the industry body for the airlines – has been monitoring passenger expectations for decades and annually tracks trends and movements.

And perhaps it is no surprise that with the investment in “passenger experience” over the past two years, that passengers generally are a lot happier than they were in 2017. What is truly frustrating for the airlines is that the biggest bugbear is totally out of their control. Security and immigration.

Sluggish security lines are a barrier to satisfaction

Despite the development of biometric passports and e-gates; known passenger technology; and advanced airport x-ray machines; there are still around 20 per cent scoring this area as the barrier to seamless travel.

This is particularly frustrating to the frequent/business travellers who although making up just 12 per cent of the world’s 4.3 billion air travellers each, can be worth up to 75 per cent of an airline’s profits. It is these frequent fliers who are happiest to share their personal data for biometrics to be used for a speedy passage through the airports. I know entering Dubai for this month’s Dubai Air Show proved the point with queueing and clearance taking less than 30 seconds and baggage was waiting at the carousel. So it is possible. But more worrying for the airlines is that not far behind in the dissatisfaction stakes shown in the IATA annual passenger survey, was in-flight entertainment.

Onboard wifi is failing to connect

Airlines have spent a lot of money over the past five years or so adding connectivity and a greater array of entertainment to their offer, often promising the opportunity to keep up on social media, stay in touch with family or learn more about their destination having fallen at the first hurdle with users watching the spinning beachball of death on an early generation onboard wifi.

Only this week, Inmarsat launched GX5, the fifth satellite in its Global Xpress (GX) fleet. The satellite was lifted into orbit by an Ariane 5 launch vehicle from the Ariane Launch Complex in French Guiana and will enter commercial service in early 2020 and deliver additional, focused broadband capacity over Europe and the Middle East.

Airlines face the dilemma now, upgrade those systems or be left behind by competitors. Interestingly even low cost carriers are seeing value in adding IFE (at a price) while carriers of all types looking at the single aisle aircraft like the Airbus 321XLR and – when it returns – the Boeing 737 MAX, will need to thinking connectivity and IFE to keep those passengers on the medium haul 6-7 hour missions satisfied.

Interestingly the least satisfied passengers in the world are from Africa who have 10 per cent fewer happy passengers than those in Europe or Asia. The biggest item on the African passenger’s wishlist, according to IATA, is smart device notification that their bags have been transferred. Many passengers on the continent have to go through multiple hubs to get from point A to point B. I was at the African Airline Association annual assembly in November and it was very noticeable that these issues – along with IFE and route access – were on the lips of the 40 CEOs in attendance.

Greater sustainability could be key to survival

In Europe, airline chiefs are also focusing on the big issue of climate change. Sustainability and a reduction of carbon emissions have been on the agenda for a while. But now there is much more than lip-service being paid by the airlines.

Protesters and campaigns like “flight shaming” are making passengers - particularly in Scandinavia – consider carefully the options for travel. But as one speaker at last month’s Airline 2050 conference in London covered by FINN, said: “It is not aviation that is the problem, it is carbon.”

Achieving or bettering the environmental targets set by ICAO, are now becoming as important to passengers as baggage tracking and smart boarding passes. Airlines have changed a lot since 2012, and they will need to change again by 2025. As well as being the safest means of international transport, airlines also offer the greatest opportunity for economic growth and by constantly reinventing themselves is the key to their survival.

Subscribe to the FINN weekly newsletter

Comments

  • Nicolas Avatar

    Nicolas

    I fly often with different airlines and I find there is a disconnect between how each tackle customer satisfaction.

    I'm the worse generation to satisfy because I flew in the 70s. I've seen prices go down with service quality. A few low costs and even new players brought back customer experience, Virgin Atlantic and Norwegian Air, respectively. Domestic US airlines went down the nickel and diming hole. I recently flew on AA which asked me to pay for everything. It felt cheap. I normally fly on United which doesn't. United isn't nevessarily better but the lack of asking us to pay for this and that makes it a slighter better experience.

    It's sad to compare US, European, and Asian airlines. The comfort and customer experience we get on Asian airlines put to shame even European companies.

    I hope these companies can figure out how to balance budgets with petroleum prices fluctuating but I certainly don't buy into the thin razor margins we're told about when company officer make so much. There is a real disconnect there.

Join The Discussion