Check-In Counter of An Airline - A Blog Banner for the Future of Customer Segmentation

Customer Segmented Distribution – The Future Of Airline Distribution

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For airlines around the world, developing a comprehensive, 360-degree view of their customers is vital. As the travel industry limps back to normal after a couple of years of travel curbs, airlines will benefit massively if they can figure out what triggers an individual’s purchasing decisions. 

To do this, and turn customers into assets, airlines need to create and cater to segments based on value, behavior, and needs. 

Enhancing the travel experience through segmentation 

For everyone from corporate customers to retail customers to large packs of tourists, airlines can apply segmentation to provide optimal fares, offers, and ancillaries. The segmentation can be based on anything; flying frequency, demographics, etc. are all considerations.

But how does such segmentation help airlines to the extent that it is embraced as the future of airline distribution?

Maximizing the revenue from retail customers

Retail customers are generally low yield fliers but viewing them as a segment with specific needs will go a long way in maximizing the returns from each seat. The key is ancillaries, such as food options, drinks, covid insurance, etc. 

Within retail customers, you can have segments based on paying capabilities, which is an approach that has been successful for Delta Airlines and many others. Notably, Delta managed to offer enhanced personalization with the help of products, such as Delta’s Economy Plus, which targets affluent couples.

To optimize its revenue, the airline tailored its NDC content, pricing, and retailing channel based on the requirements of the target group.

Making the most out of corporate travel

Generally, corporate customers don’t mind surge fees for late bookings, and they will also prefer to fly with comforts, such as priority boarding, checked bags, onboard meals, etc. Some airlines even provide Wi-Fi and business lounges for this passenger segment. 

With highly granular segmentation and insights from customer behavior, airlines can further provide business travelers with stellar customer service. For instance, when the airline knows that someone is a business passenger, they can offer easy flight cancellations, seat upgrades, and notifications during disruptions, which will go a long way in bolstering customer retention. 

Taking advantage of group bookings

Tourists, religious pilgrims, corporate group bookings, and mass requests from travel agents can all be treated as different segments that airlines can take advantage of with personalized pricing and product offers.

Flights like Malaysian Airlines have dedicated Hajj trips with flights that serve only specific meals that are consistent with the occasion, have prayers onboard at the prescribed times, etc. This has been a huge revenue generator for the airline. 

Further, travel agents may look for discounts in exchange for a large number of ticket bookings that will come in consistently every month. Airlines can make use of demand forecasting and seasonal tourism data to provide optimal pricing for them.

Apart from this, companies that have employees traveling in large numbers can be served with loyalty programs, access to premium business lounges, etc. 

A surprisingly underrated passenger segment 

In many countries, governments mandate their employees to only travel on their national carrier. This can be a lucrative segment for airlines if they can provide the government employees with a dedicated portal for bookings, cancellations, and unlocking rewards for flying frequently. 

NDC-enabled merchandizing 

As NDC adoption takes off, airlines can also segment customers based on shopping data and customer intent. Enhancing the NDC-shopping experience will go a long way in helping airlines enhance the conversion rate and customer experience. Moreover, this allows the airline to keep customer needs at the center while designing future products, bundling fares, and making marketing decisions.  

Conclusion 

Not all passengers are the same. As air travel becomes increasingly common, airlines need to figure out how to effectively cater to nearly 3 billion passengers from different backgrounds. With customer analytics, airlines can successfully implement value-based segmentation and consequently boost profits.  If you are looking for a solution that can handle customer segmentation for you and provide you with actionable insights on how to cater to them for optimal revenue, reach us atmarketing@infinitisoftware.net 

An Airplane Surrounded by 5 Sales Component Pictures that represents the Airline's Ancillary Sales

What Ancillaries Should The Airlines Focus On In The Post Covid Era?

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Long before covid, airlines—especially the budget carriers— have been boosting their operating margins with ancillary revenue. Ancillaries, which are non-ticket sources of revenue for airlines, brought in 109.5 billion U.S. dollars in 2019 alone.

Since the pandemic has made passengers pickier—they expect personalization and higher safety standards—and airlines need a massive boost in revenue to recover from the devastation caused by international travel restrictions, ancillaries are expected to lead the way.

Choosing the right ancillaries to focus on

Emerging from the pandemic, customers have a variety of concerns they need resolved before they can trust air travel again. A few of them are: 

  • Increased safety measures
  • Flexibility in pricing
  • Modular offers for corporates

Meeting these should be an airline’s primary focus if they want to rekindle passenger confidence in flying and provide a seamless journey for their customers. This is because customer behavior has seen a massive shift due to social distancing requirements, fears of infection, the economic downturn, and the shift towards online buying. 

The way out of the pandemic—personalizing the passenger experience

To stay relevant and gain increased customer loyalty, airlines need to focus on personalization the way Netflix and Amazon have been able to, by moving from a product-focused approach to a customer-focused one.   

Here are a few of the ancillaries that you can offer passengers in light of the pandemic and your efforts to fill more seats with high-yield passengers. 

Covid related health measures

Passenger confidence will be boosted if you take the initiative to offer ancillaries, such as travel insurance and baggage wrapping and immune boosting kits to protect from infections. Ensure that the insurance is affordable and comprehensive, covering aspects like screening, telemedicine, treatment, and quarantine costs.  

Also, you can take a cue from a variety of tour operators who are offering tours in Russia with a twist—you will be given the vaccine on arrival. 

Moreover, some airlines are allowing passengers to book seats or whole rows near them to ensure social distancing. This can be quite lucrative if airlines are able to automate the booking process and make sure those seats are blocked from being booked by others.

Crucially, passengers also need to be offered the ability to cancel without any penalty if they contract covid.

Modular bundles for business travelers 

Identifying flights or timings with more business travelers and offering something as simple as Wi-Fi will do wonders for your bottom line. Also, offering business-class lounges, extra legroom, transport facilities in their destination, etc. for corporate travelers can significantly boost ancillary revenue.  

To attract more corporate clients, airlines can also begin offering tickets that offer changeability of the seat, refundability, and easy upgrades. 

Frequent flier rewards 

Airlines can present passengers with the opportunity to be part of a rewards program that benefits the fliers every time they use the services of the airline. Seeing rewards accumulate will serve as an impetus for many to become loyal to the brand.  

Further, the airline can make money selling loyalty points to credit card companies who pass it on to their premium customers. These customers go on to become patrons of the airline.  

Tour packages

Tourists and religious pilgrims will form a substantial part of airline revenue for the next few months, given the reluctance of many business travelers to begin corporate travel because of factors, such as remote work.

 So, catering to the tourists with fully packaged trips to their dream destination, including car rentals, hotels, and food, will serve to delight your passengers and add to the bottom-line as well. It is worth noting that airlines can profit from offering relaxation or wellbeing-themed tours because of the effect that the pandemic has had on people’s minds and bodies.  

Conclusion 

Airlines need to come up with innovative, personalized products through dynamic bundles across all touchpoints and channels. Doing so will go a long way in giving the airline a competitive advantage amidst these turbulent times.  \

If you want help with offering customer-centric ancillaries to optimize your revenue and strengthen recovery, don’t hesitate to reach us at  marketing@infinitisoftware.net 

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Can Airlines Move Up The Value Chain And Provide A Fully Packaged Hajj Pilgrimage?

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Umrah and Hajj pilgrimages are both rapidly growing markets. Since these are trips undertaken by millions of devout pilgrims every year in the holy city of Mecca in Saudi Arabia, catering to them has become a highly competitive industry.  

Consequently, every year, airlines servicing these areas are in a mad rush to book the most passengers in collaboration with large travel agencies. 

Unfortunately, this has turned into an arrangement with two significant losers—the religious pilgrim and the airline. 

Why? 

The travel agents, realizing that these trips are extremely important to the faithful, leave no stone unturned in extracting the maximum amount of money possible from the pilgrims.  

Given that the price of tickets only accounts for around 20 or so percent of the pilgrimages’ cost, airlines do not make much money off the trips. 

Is it possible for airlines to rectify this issue and end up making more money while also delighting their passengers? 

The answer is yes, and the way to achieve this is simpler than you would imagine. 

Read on to find out how you too can jump on the bandwagon of offering fully packaged Hajj and Umrah pilgrimages and bring in tons of ancillary revenue that you are currently leaving on the table. 

Taking your customer experience to the skies 

One of the main customer pain points when planning a Hajj or Umrah pilgrimage is that they do not know much about travel and accommodation in the Kingdom of Saudi Arabia. As a result, they must search extensively for travel agents who will plan the whole trip for them. A major issue here is that the prices are exorbitant, and the customer is put in a position where they must suffer a large financial burden.  

Here, there is a massive opportunity in creating a pilgrim-centric service for travelers to Hajj and Umrah. As an airline, you can go beyond picking up and dropping passengers and provide them with an all-inclusive religious pilgrimage that they will cherish for the rest of their life.

Now, how do you go about doing this, and is stellar customer experience the only benefit?  

Airlines can go about doing this by becoming a travel marketplace, an “Amazon of travel” so to speak, which is a platform for various travel agents and other vendors to provide services for which you also get a commission.  

Apart from this, you can strike deals with travel agents to ensure that only your flights are offered as part of their tour packages.  

You can also offer the following and even more to customers while making substantial amounts of ancillary revenue along with the flights they book.  

  • Cars for hire 
  • Hotel bookings  
  • Travel health insurance 
  • Covid testing and support.
  • Flight, bus, and even train tickets. 

For passengers, this will be a godsend because competition among the travel agents listing on the airline’s portal will bring down prices for the travel package. Meanwhile, you can ensure that your flights never fly with empty seats, and rest assured that you are making the maximum amount of money possible from each passenger’s trip. 

Conclusion 

Airlines will benefit massively by moving up the value chain and providing a fully packaged Hajj and Umrah pilgrimage. The opportunity to scale operations is massive; nations, such as Malaysia and Egypt have largely underserved markets that will welcome the ability to complete their religious duties cost-effectively.  

Transitioning to such a travel marketplace model does not have to be complicated at all. Reach us at marketing@infinitisoftware.net to know how we can equip you with travel marketplace capabilities just as the pandemic subsides and demand begins to soar for pilgrimages.

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automated Solution Helps Airlines Manage Group Bookings Profitably

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Today’s tech-savvy passengers would like to search and book their flight tickets from the airline websites or other online portals. The process of online booking is very easy, less time consuming and provide ample options to passengers for searching flights, feeding their details and making payments to book their flights. But the scenario is entirely different in group bookings for more than nine customers.

As usual the group passengers expect for a negotiation in the fare and prompt responses from an airline when they approach that airline for group booking. And, this the most challenging task for the airline to handle.

Most of the airlines follow the manual process of handling the group traffic due to the non-availability of proper web base automated solution for group bookings. The airline group desk need to consider lots of factors to evaluate and quote the group booking fare, which demands a lot of time and resources. After determining the fare also the airline group desk need to contact the passengers through phone, emails or travel agents for the final negotiation and booking. That makes group booking a lengthy, time consuming and complicated process.

By the time customers may get the lesser quotation from the other competing airlines. And if the consumers choose to fly with any of the competing airlines then the first airline in the process of negotiation lose the potential revenue and passengers. The whole hard work and process followed by the group desk of the airline up to that time turns into a complete waste.

But now this problem can be eliminated by the airlines, by adopting Group Revenue Management Solution. It brings a high level of automation in the airlines’ existing group revenue management system enabling airline group analysts to better manage the group traffic and optimize group sales.

Automated group Revenue management solution enables the customers to directly request for the fare with which they want to book the airline tickets for the group of more than nine passengers, from the airline website itself. Simultaneously, it helps the airline group desk to monitor incoming group request, evaluate them and determine the appropriate fare by processing the request in multilevel automated matrix system and respond back to the customer within very less time period. Other SSR services can also be managed through the automated solution that does nothing but maximizes the revenue of the airline.

Thus, it results in reducing the risk of other airlines approaching the customers and vice-verse for group booking. Moreover, as per the general trend customers become happy with the prompt responses and like to do repeat bookings with the airline in the future.

Overall, integration of automated revenue management solution with the existing revenue management process of airline makes the group booking a happy and error free process for the customers and revenue generator for the airline.

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Maximize airline revenue by implementing Dynamic Pricing for group booking

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Be a business travel or tour, group traveling is always an exciting one. The exhilaration would be much better if the fare and process of group booking are made seamless and faster. As group travel is becoming increasingly popular, airlines should gear up their group booking procedures to serve customers efficiently. Airlines do not require a mere group booking solution but a group booking revenue management system. The advantage of group booking revenue management system lies in providing the right fare to the right group at the right time. The appropriate blend of these three elements is the powerhouse of revenue to the airlines.

Right Fare to the Right Group

On an average, medium sized airline group desk receives around 150 to 200 group request during low demand season and it ranges up to 500 during peak season. Though airline sets the turn around time to be few hours, it takes around two days to process each request. Here, identification of the right fare to be quoted to the right group becomes a mandate that would yield better revenue to the airlines. Depending on various factors such as availability, current load factor, size of the group, requested fare, nature of trip and demand the best fare should be quoted. But the changing nature of all the above mentioned factors makes it difficult for the airlines in decision making to groups. For which a dynamic pricing strategy, speedy processing and altogether an automation is vital.

Right Fare at the Right Time

A dynamic pricing strategy must be applicable to multiple scenarios on the basis of market condition. The challenge of the airlines lie on deciding the fare to be quoted for each group travel request. The travelers now are more keen to negotiate on their group booking and be assured of receiving the best deals. Airlines have to monitor the competitors price as well as evaluate the customer’s history to quote a price. Conjointly, there also exists special scenarios where airlines decide on promotional fares and surge fares varying from sectors and season. Since the customers are provided with huge choice and the probability of switching is also too high, group fare negotiations help airlines to retain the customers. It requires a timely decision with a right fare in order to maximize revenue from each group request.

Right Group at the Right Time

While hundreds of group requests are being showered on the group desk analysts, it consumes huge manpower and time to process them. Prioritisation of the group becomes almost impossible as the processing of group requests begins as in the request arrives. The challenge lies in choosing which group request to be processed first with the appropriate fare. Priority of serving group requests includes not only the volume of passengers traveling but also the revenue and prior client relationship of the airlines. An opportune fare on time and automation in work process are the key to retain internal and external customers.

Considering all the above scenarios, a customer sending group request to two different airlines, one with a manual processing and another with an automated group booking tool. Imagine, it takes one days to obtain a reply from manual processing while it takes an hour from an automated group booking solution. That’s where the power of automation lies. !! While myriad obstacles are being put forth to an airline front. If there could be any one stop solution to all the problems being posed, then bringing an automation to the process becomes the answer.