2019 has been a year of rapid change across all sectors of aviation. With operating costs continuing to increase, airlines are constantly having to adapt their businesses to ensure they keep ticket prices competitive and remain proactive when it comes to consumer demands.
Speaking and working with many of the world’s biggest airlines throughout the year at Upgrade Pack, I have written this blog to highlight three trends I expect to dominate industry headlines in the next twelve months.
Elevating the customer experience
Many airlines are now thinking outside the cabin in an effort to differentiate from their competitors, with a growing emphasis upon the customer experience. Whilst there’s only so much airlines can do to differentiate in the air, we are seeing more creativity in and around customers' engagement with airlines brand and service.
Some airlines have set up innovation labs solely focused upon improving the customer experience, something industries like banking and insurance have been investing in for many years.
One trend we’re starting to see in this regard is airports such as LAX (The Private Suite) and LHR (The Windsor Suite) integrating with airlines to offer first-class passengers their own terminal. With beds, showers, food, chauffeur to the car and everything in-between, this addition to a passenger’s ticket gives them a true VIP feeling and increases loyalty towards a partnered airline.
In other examples of elevating the customer experience, British Airways recently announced they will be trialling virtual reality into seats for people that ‘fit the criteria.’ This is a fantastic idea and will distract many from the long flight they are enduring, along with the positive brand effect of customers sharing their experiences on WIFI whilst in-flight. This will likely be a slow push and probably only be available in Business Class and above, but expect to see more customer experience-based incentives announced in 2020.
Tackling the carbon issue
This year has seen the Swedish term ‘Flygskam’ (translated as ‘flight shaming’) hit mainstream news as concerns around aviation’s contribution to climate change continue to fall under the microscope.
With the science on the human impact on global warming is beyond doubt, and with figures like Greta Thunberg keeping it firmly in the public eye, airlines can no longer stay silent on the issue. As, Virgin Atlantic’s Chief Executive Shai Weiss said in October, “if there’s one name everyone in the airline industry knows today that it perhaps didn’t know a year ago, it’s Greta Thunberg.”
I expect to see the vast majority of airlines announce new or expand upon existing initiatives to negate detrimental environmental impacts, such as easyJet’s recently confirmed £25m towards carbon offsetting in a bid to become net carbon-zero in 2020.
Offsetting is widely seen as a bridge rather than aviation’s long-term carbon solution, with Johan Lundgren, easyJet’s Chief Executive stating, “we recognise that offsetting is only an interim measure, but we want to take action on our carbon emissions now.” However, given its relative ease of implementation, expect many other brands to follow suit in the year ahead.
Sustainable Aviation Fuel (SAF) is predominantly recognised as the industry’s long-term fuel solution. Many of the biggest brands are working with the UK’s Aviation Environment Federation, which Upgrade Pack recently joined, who are leading the way when it comes SAF’s technological roadmap and progression. While it’s a number of years away from commercial adoption, I wouldn’t be surprised to see brands publicly state their investments in SAF and its expected commercial viability.
Third party technology platforms
Whilst airlines are still able to operate on systems dating back to the 1970s(!) internally, there remains a need to continue investing in customer interfaces to make sure they meet consumers’ demand for smart, real-time and most importantly, mobile engagement/ experiences. Partnering with innovative third-party platforms like Upgrade Pack, increases airlines’ customer reach and creates highly valuable and additional revenue streams in the face of increasing competition and operating costs.
With IATA’s New Distribution Capability (NDC) program making it far easier for third party companies to integrate and offer airlines new revenue streams, and new iterations of the program to be rolled out in 2020, expect to see more companies and brands with compelling technology platforms enter the market throughout next year.