The COVID-crisis has uncovered a need for airlines to change, and fast. There is an upside to this new imperative. There has never been a more necessary time for far-reaching transformation in our industry than now. And to be successful, the airline voice needs to be at the center of new thinking and technology. That’s why Accelya and Farelogix, now an Accelya company, have launched the Air Transformation Lab, a series of activities to explore the current state of airline commerce and uncover the DNA of a profitable future.
The Air Transformation Lab project has yet to reach its conclusion, but as Headline Sponsors of T2RL PSS2020, Accelya dug into the latest findings to coincide with the event. So, let’s dive into these key themes and explore!
- Transformation is Now
The negative impact of the COVID-crisis cannot be overstated. Nonetheless, the majority of airline leaders acknowledge some positives. They believe this period to be an opportunity to transform commercial technology/processes, improve inter-departmental collaboration, and try new things.
- Customer-Centric Flexibility Gets ‘Priority Boarding’
Decimated demand has elevated customer-centric change to a strategic priority. Airlines moved quickly to enable more efficient servicing as the COVID-health emergency unfolded, and most airlines have now abolished change fees. Airline leaders report this shift is here to stay and for a good reason. The customer has changed.
With business demand at an all-time low, the leisure traveler is now the lifeline of the airline. Many are seeing important, new customer segments emerge, such as less seasoned travelers and younger customers. As a result, a spotlight is shining on customized products and bundles. Early data from the Air Transformation Lab survey reveals a two-fold increase in interest in “personalization” as airlines pursue greater offer relevancy.
For some airlines, Continuous Pricing will play a role in building a profitable future. As continuous pricing is executed outside of fare-filing, airlines will have more price points to meet the changing customer need. For example, this strategy will enable customers who book closer to departure to receive more attractively priced offers.
- More Revenue or Reduced Cost? Yes, to Both!
It has never been a more critical time for airlines to be everywhere it makes sense. According to Air Transformation Lab participants, that means more content, an emphasis on core channel relationships, and a laser focus on cost reduction. When the Air Transformation Lab team asked what is more important, revenue optimization or cost reduction, the resounding answer was, “Yes, to both”.
The current situation has grown the appetite for airline controlled offers, and many executives are looking to NDC to deliver over the next 12 – 36 months. For the NDC-leaderboard airlines, as many as 1:3 tickets are now sold through NDC-channels.
Which sales channel-related changes do airlines anticipate? Airline professionals expect to see a continued shift in sales to their direct digital and tech aggregator channels between 2020 and 2023, predominantly at the expense of traditional indirect channels.
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To find out more about the Air Transformation Lab, please visit Accelya.com/lab.