Power to the people – airlines seek the ties that unbind

Delta FaceBook.JPG

It’s no secret that travel distribution in the United States is getting all shook up, as airlines fight to become less dependent on global distribution systems (GDSs), and seek to make more meaningful connections with their customers. American Airlines got the ball rolling when it started scrapping with Orbitz and the online travel agent’s part-owner, GDS Travelport. And US Airways is now carrying the torch, with its own lawsuit against GDS Sabre.

But in the midst of all the chaos, one message is clear – airlines want to offer a highly-targeted product offering to passengers, essentially allowing each passenger to tailor the experience to suit their own needs. So they want to know their passenger, but not lock their passenger into an experience he or she doesn’t want. The ties that unbind.

Many are forging customer relationships though social media (obviously). But some are getting quite clever. American, for example, is using social media to assist its most valuable customers by opening a Twitter and FaceBook page to support AAdvantage members. Delta Air Lines lets customers book travel on FaceBook. And passengers flying on Gogo-equipped Delta aircraft can change their connecting flight – for free – via Delta.com. No need to pay for Internet. But how do the stakeholders feel about this brave new world, where truly tech-savvy travelers have a growing voice?

During SITA’s recent Innovation in Airline Distribution 2011 conference, sponsored by Airline Business, a gaggle of industry experts weighed in on the subjects of social media, travel distribution and meeting customer expectations.

Former Airline Business features editor, Victoria Moores, who now serves as general manager, communications for the Association of European Airlines, shared with me her verbatim notes from that event.  And now I’d like to share them with you.

Note that, while not everyone is on the same page, most agree that adaptation is key, as the passenger experience evolves.

STA Travel chief executive Peter Liney:


“Dealing with ‘Generation Y’ is our key challenge. We are focusing in on this group of people, on being able to totally understand them. If we do, we will adapt and prosper. If we don’t, we will die and we will deserve to die.”



American Airlines director of distribution strategy Cory Garner:


“The most important thing is to start from the perspective of the customer and let the business and marketing processes find the technology.”

 

“It’s not just putting products on the shelf anymore. Instead there are 20 or 30 services, giving thousands of options to present to customer, and we can’t present them all at once.”

“How do we structure the technology? It’s all about what we know about the customer, what kind services like, what kind of services they don’t. They only have so much time and we only have so much real estate, so we have to be really smart about how we do that. We need to take into account who the customer is and their relationship to the airline.”

“Direct connect is all about participating in a different way, instead of pushing out prices, we process customer inputs.”

“We need a way to respond to customer needs, responding to them as individuals.”

“There is lot of research on social media which shows that when you introduce a financial exchange it changes the rules and the way you interact.”



Aer Lingus director of distribution Ronan Fitzpatrick:


“There is no ‘one size fits all’. How do I get my product to my customers? I don’t think we are going to get to pure customisation in the blink of an eye.”

“There is a lot of difficulty in the market out there. Innovation is something we are in the middle of, but these are difficult times and that is recognised by all parties. Cost is a difficult factor and comparison shopping is key to the mix. We can’t have a situation where costs are going in one direction and revenues going in another.”

“We are a little bit fearful about opening up the floodgates from a social media perspective, because we want it to be social and not a push channel. We want it to be a channel which we manage as well as we manage our direct channels.”



Datalex chief executive Cormac Whelan:


“Other companies don’t know when customer will walk into shop; an airline knows that in two hours’ time a traveller will begin their journey.”



Sabre Airline Solutions vice-president Europe, sales and account management Alessandro Ciancimino:


“Inferring customer preferences in a meaningful way is not that easy.”

Cathay Pacific chief information officer Edward Nicol:




“The amount of metal in a Porsche or a family saloon is about the same, it is just question of creating value.”



Sabre Airline Solutions senior consulting partner Jim Barlow:


“A more important question than ‘how do your customers buy your flights?’ is ‘what are they really looking for?’. What is it about that airline which makes them choose that flight, above and beyond what you would expect? Whose processes are we really modelling anyway? Is it the booker, the passenger? There isn’t really one model, there are lots of different models.”



Amadeus IT Group director innovation Francois Labunthe:




“Today it is all about cross-selling and up-selling, but a better sell should be at the heart of the shopping and booking experience.”



WestJet executive vice-president strategy and planning Dr Hugh Dunleavy:

 


“Consumer choice and how you present that information to the customer is critical – how you make sure have a value proposition which is attractive to the market place. And the competitive environment is changing so rapidly that by the time you come to a leisure customer’s next booking, any historical information you have about them has changed.”

“This year we tripled our team focussed on social media; it went from one to three.”

Travel Technology Research director Mike Moore:


“The whole world is not necessarily a friend of Facebook, let alone friends on Facebook.”



Frontier Airlines vice-president, customer experience and technology Jan Fogelberg:


“Facebook is a social network. I am kind of on the fence about whether we want to impose shopping on that.”



Lufthansa head of e-commerce and mobile Marcus Casey:


“I have a touch of social fatigue. Everyone thinks you can create commerce through Facebook, but I have not seen a good use of selling tickets through social websites yet. I would like to see more focus on selling on our website than through Facebook. The question is: is it more of a marketing tool or can it be a commerce tool as well.”

 

“Where there are events [like volcanic ash and snowfall] we have seen a definite spike in mobile usage. This is not a surprise because the customer is at the airport.”

“Mobile bookings are higher yield too because they tend to be more last minute.”

 

“Mobile and e-commerce are doing well in Russia. That was quite a surprise.”



Virgin America manager distribution Cheryl Reynolds:

 


“With new routes, pictures and instant feedback – I think this [Twitter] is definitely a great channel. I think what people don’t understand is it cuts through the e-mails. I can read Twitter and catch up on what happened overnight.



SITA chief technology officer Jim Peters:




“Smart phones are a great way to deliver targeted, relevant content.”

“Emerging markets are going to leapfrog the desktop [and go straight to mobile].”



Google industry manager travel Nathan Bucholz:




“It surprises me when companies are hesitant to get onto the mobile thing; it’s like being hesitant to get on the internet thing. If you have your head in the sand, next thing you know there’s a storm blowing up and you don’t know about it.”





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