Bringing Airlines And Passengers Together In A New Age by Kane Minks

American Airlines Gate C17 at DFW. kane minks

by Kane Minks

As the world gets more interconnected and more populated, air transportation has become more in-demand, with passenger numbers increasing by the day. This should have made things easier for airlines, but competition is getting stiffer as countries, especially in the developing world, and individual investors from the industrialized west, set up airlines.
Professor Nawal Taneja, an internationally re-known airline industry expert, identifies development, branding and communication value propositions that are mutually beneficial to customers and airlines even during the challenges facing airlines today.

An airline’s core business is the reliable, safe and fast transport of passengers and goods. However, airlines have failed to effectively brand their products/services and to communicate their value added processes to customers. Inter-connectivity has raised expectations – passengers expect the same level of service from all airlines regardless of their social status or geographical location. This is a challenge airlines have not learnt to deal with effectively.

Airlines are part of the transport chain. They should adopt strategies that enable them work with others, integrating their services with those that are offered by other players in a seamless experience. To do this, airlines need to adopt what Prof. Nawal refers to as passenger centricity, where airlines have a better understanding of passenger needs, financial ability, and willingness to pay sustainable fares. This is what is referred to as passenger intelligence. Airlines can gain this by combining business and customer intelligence, where the information that is used is timely, relevant, authentic and accessible.

Airlines should embrace technology to enhance passenger value. One such technology is the internet which has turned airlines into retailers. These days, airlines sell their services directly rather than going through brokers as they used to do before. Passengers now do not need to go to airline representatives to purchase tickets but do so on the internet. This enhances the passenger experience offered to customers by airlines. By facilitating access to the internet when on board, airlines have transformed their cabins into workstations.  By doing this, they create communication lines with passengers who feel that their needs are being taken care of. Airlines should enhance this further by facilitating enhancements and options that are controlled by passengers.

A strategy airlines need to adopt fast is that of being solution providers rather than transaction providers. This is especially relevant where customer needs deviate from universal expectations for all airlines. Most airlines are aware that the purpose of a trip and regional cultures generate different customer expectations. Different airlines need different value propositions for customers. These may be cultural, regional, or segment based.The survival of airlines will depend on how fast they adopt technology. For example, EU airlines hard hit by high fuel costs, a recession, and fare competition are taking up technology-based strategies to revamp the industry. Integrated air traffic control zones create seamless travel experience for their customers and are just some of the strategies on the table. by Kane Minks

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Spirit Airlines hit with lawsuit over fees – Business – MiamiHerald.com by Kane Minks

English: Spirit Airlines N587NK (an A321-231) ... Kane Minks

Spirit Airlines hit with lawsuit over fees – Business – MiamiHerald.com.

Kane Minks

Interesting story. Spirit is an Ultra Low Cost Carrier that makes their profits from exorbitant fees. The only thing included in their basic ticket price is the seat and the ability to carry on one personal item (like a purse or backpack). Everything else incurs a fee. This lawsuit is in reference to a certain fee they have been charging their customers for years. Their passengers love to hate them for their fare structure, but in the end they always come back. They simply offer the cheapest fares to some of the most popular destinations in the U.S., Central America, and South America. A Spirit Airlines Case Study will follow shortly……

 

Kane Minks

Airline Industry in a Quandary Over Fuel Surcharges and the Search for More Efficient Planes by Kane Minks

Aircraft leaves a contrail in sky. Kane Minks

by Kane Minks

The airline industry has been adding fuel surcharges to the tickets of passengers for some years, and increasing them as fuel costs jump. Yet, there have been no reduction in charges since 2009 despite decreases in fuel costs.

A study by Carlson Wagonlit Travel found these facts and more, demonstrating that the airline industry has been profiting off their customers through unreasonable fuel surcharge fees. The study found that fuel surcharges have risen 53 percent since 2011, a stark contrast to the 24 percent increase in airline fuel costs in the same study time frame. Clearly the airlines are using the fuel fees as a way to increase profits. They may find it more difficult to justify the exorbitant charges going forward.

A new law requires all airlines based in the U.S. advertise the full fare, which includes all of the components that make up the ticket price. The fuel surcharges must be disclosed, making it more difficult for airlines to justify the exorbitant charges. The new transparency rules may turn passengers off to the idea of taking vacations that require air travel.

Airlines are using hidden fuel fees as a way to stay competitive in tighter markets, and lowering fares in order to lure in more passengers. However, the fuel fees can make up to half of a ticket price for international flights, which may lead to a reduction in the amount of passengers for those flights.

The airline industry is also facing pressure in areas related to the use of jet fuel in the form of carbon taxes from the European Union. The European Union is requiring all flights taking off or landing in Europe pay for carbon dioxide (CO2) generated by aircraft. The program begins next year, and initially provides 85 percent of the cost of required permits for free. The rest can be traded off with less polluting airliners. Countries around the world are balking at the requirement by the EU, and the issue is still not settled. It’s a sure bet the extra charges are going to be passed onto passengers.

Volatility in the cost of fuel and threats of carbon taxes is causing the airline industry to purchase new, more fuel efficient planes. The goal is to reduce the amount of inefficient, older planes that are in the current fleets, and move to planes that get better fuel mileage. Some of the redesigns are expected to get anywhere between 13 to 15 percent improvement in efficiency, reducing the amount of fuel used.

The current state of the airline industry is a tenuous one; especially with the cost of fuel cutting sharply into already low profit margins. The amount of flights initiated around the world is increasing on an annual basis, but it only takes a small action to dramatically affect success and passenger satisfaction.

Article By: Kane Minks