Passengers want more, but more of what?

Providing a better passenger experience is the bedrock of success for an industry that is fundamental to economic and social progress.

The latest IATA Global Passenger Survey (GPS), conducted in conjunction with PricewaterhouseCoopers (PwC), provides a wealth of information and insights to help achieve this goal.

One of its key findings makes plain the challenge the airlines face, however. Pierre Charbonneau, Director Passenger at IATA, says “today’s tickets are bought as a commodity.”

Travelers tend to book based on price first, followed by flight schedule and frequent flyer programs.

While this may seem to reduce airline competition to a price war, the GPS also reveals the importance of developing a brand image that engages with the passenger, strengthening loyalty and driving sales.

Connecting people
With affordable, on-time travel increasingly viewed as a basic expectation, it is the individualized elements that deliver a differentiated customer experience.

Jon Glick, an Advisory Partner in PwC’s Transportation and Logistics practice says that the airline ticket is, “an experience that connects humanity,” and as such provides an opportunity for differentiation.

“Whether it’s families traveling for leisure on holiday or a businesswoman flying halfway around the world to close a deal, the industry connects people,” he says. “That in, and of, itself creates an experience. And the experience is one that follows the traveler journey, a continuous cycle from research and planning through flying and post trip activities. It is the sum of these experiences that will drive future purchase behavior.”

One of the major elements highlighted by the GPS concerns the type of experience that the modern passenger is after. In essence, passengers are looking for convenience, transparency, and security.

Convenience equates to personalized, digital experiences when things are going well and informed, empathetic staff when things are not. Transparency is about increased automation across the journey, giving passengers insights into bags and boarding, as well as relevant status updates for the duration of their trip. Security, meanwhile, must remain a priority spanning these advances, including information privacy.

Evolving customer preferences also continue to shape the inflight experience, where the number of users equipped and eager to stream media via their own devices has grown to 39%.

Though this still lags behind those who prefer to use seat-back units (50%), the gap is shrinking. Wi-Fi has the potential to be quite popular for both browsing the internet and checking emails, but price remains a barrier—55% of respondents to the GPS would not pay for any ancillary in-flight entertainment products.

Emerging behavior
Glick believes the next five years will be an interesting time in the evolution of passenger behavior.

“Demographically speaking, we have the rise of the millennial traveler reaching critical mass as well as an increase in the consumption power of growing population segments from emerging markets,” he says. “Looking further into the future, we’ll see the aggregate purchasing power of the E7 emerging economies—Brazil, China, India, Indonesia, Mexico, Russia, and Turkey—overtake that of the G7 by 2030. So, as we look at what the GPS tells us, we should look at it from the perspective of the emerging traveler.”

GPS responses suggest that, for airlines to stand out in this new market dynamic, they need to leverage available data and dig deep into their analytics to come up with targeted services and offerings to the passenger. They also need to store these preferences and automatically allocate seats and optional airline products or services, rebook flights in case of delays, and so forth.

Communicating these decisions must also be handled correctly. Passengers expect to be able to find out what they need to know, when they need to know it with the minimum effort through their preferred channel. More than half of respondents to the GPS prefer to receive notifications via short messaging service (SMS) rather than other channels that require connectivity (e-mail, mobile phone application and social media).

Clearly, consumer expectations are changing and carriers should never underestimate the power of a positive brand interaction. Many consumers now appreciate a two-way dialogue with brands, so nurturing a trusted and engaging relationship with them can go a long way in strengthening their loyalty.

The full report can be found at www.iata.org/gps2015.

Variations by region and segment false
The GPS revealed nuanced differences in regions, mostly related to the nature of travel and the experience passengers have of flying international or domestic.

“Generally speaking, pursuing a strategy that tries to be all things to all people will not be successful,” says Jon Glick, an Advisory Partner in PwC’s Transportation and Logistics practice. “The passenger experience is based on segments and airlines have historically offered different experiences for different segments; for example, multi-class cabin and frequent flier program tiers and corresponding experiences. The survey confirms that airlines should continue to segment their offerings to match the varying passenger segment needs and preferences.”