Global demand for air travel is increasing 10% year-on-year, according to the IATA. In the UK specifically, more people are flying than ever, with a CAA survey revealing 62% of consumers have flown in the last 12 months – the highest figure since that survey began.
This all sounds like incredibly positive news for the airline industry. And it is. Airlines like easyJet and Jet2 are currently planning ambitious growth of around 8% in carrier capacity.
But as they expand to cope with this surging demand – and incur the significant associated costs – airlines need to be sure they can fill those extra seats to remain profitable. What’s more, they need to maximise revenues by selling directly to travellers, rather than through third-parties. This is challenging when the one-stop-shop convenience of online travel agencies (OTAs) is so appealing to travellers.
The ability of airlines to stand out in a competitive market, and attract and retain customers, will depend very much on whether they can cater to the changing needs and expectations of today’s travellers. And that means first understanding those needs.
The way people choose to travel is changing, with new and diverse trends emerging all the time. Just a handful of the trends identified in The Great British Holiday Audit from easyJet are:
Air passenger demographics are also changing. They’re skewing younger, with 73% of those aged 18-34 saying they’ve flown in the last 12 months compared with just 53% of those aged 55+. These younger travellers are often more likely to use technology – perhaps AI, biometrics, or digital wallets – to improve their travel experience. In fact passengers under 25 would rather use a digital payment option than a credit card to pay for air travel, according to the IATA.
Traveller expectations of airlines are evolving alongside these continuous changes. Today’s passengers want seamless, relevant communication and engagement across all devices and touchpoints. They expect airlines to understand their unique needs or preferences and deliver personalised recommendations, offers, and experiences. At the same time, they expect airlines to demonstrate full transparency in data collection and use.
Airlines are well aware of the need to adapt their services to shifting customer needs and expectations, and there are countless examples of them doing just that:
But despite these efforts, the ability of airlines to understand their customers, and then engage those customers with targeted, personalised experiences, is still limited.
Our industry research, Last Call for a CX Upgrade in Travel and Hospitality, reveals travel brands see tailored products, personalised customer service, and data-driven recommendations as the three most important tactics for delivering best-in-class customer experiences. Yet less than 40% of the brands we surveyed are actually employing these tactics. These figures are even lower for airlines, with just 25% saying they make data-driven recommendations compared with 43% of OTAs.
Airlines are often being held back in their personalisation endeavours by an inability to connect data across siloed systems and activate that data across channels.
Much like other travel and hospitality organizations, airlines struggle to join up data from disparate channels that’s siloed in different systems. Our research reveals limited data integration between systems is one of the top two challenges preventing travel brands from delivering seamless customer experiences, second only to a lack of internal expertise.
“Knowing our customer is the key to unlocking the power of personalised messaging and dynamic performance media. Today’s cutting-edge machine learning algorithms can only deliver their full potential when fuelled by a deep understanding of customer needs and behaviours.”
— Asu Erayda Akyüz, Head of Performance Marketing & Marketing Automation, SunExpress
Airlines can’t connect the numerous sources of data they have access to, such as website visitor data, mobile app data, Passenger Name Record (PNR) data, loyalty card data, social data, and offline data. This means they don’t know that the passenger checking in right now is the same person who browsed their website six months ago and ultimately booked via an OTA. Or that the person visiting their website using a laptop interacted with the brand on social channels just a few days ago using their smartphone.
The inability to unify data and build a full picture of the individual’s behaviours and preferences is a big problem. It prevents airlines from making the most of emerging data analytics and automation technologies – particularly those powered by AI – and limits the impact of their digital marketing and personalisation strategies. It reduces their ability to activate data efficiently across channels, resulting in media activities that are both more expensive and less effective than they should be.
Airline loyalty programs have traditionally played a key role in customer engagement and retention, and they provide valuable data relating to passenger behaviours. But loyalty models are in the midst of a transformation, and airlines need to be careful not to confuse or alienate their customers.
A report on the UK loyalty programs market reveals two key airline trends:
To make sure their loyalty programs are actually doing what they’re designed to do, airlines need to use customer insights to ensure their incentives and rewards are personalised to the individual. For our latest CX trends report we asked over 2,000 consumers what loyalty benefits would make them more likely to consider a brand, and the top two results were:
What’s more, if airlines are entering into partnerships with other brands, they need to make sure these are the right partnerships. They need to set up mutually beneficial data collaborations that keep their customer’s data safe while providing valuable insight.
To put their data to work, and ensure they can reach the right people, in the right channel, with the right message, airlines can follow these six steps:
SunExpress, a leading leisure airline focused on connecting Europe and Türkiye, wanted to improve customer acquisition and retention in the UK.
Working with Territory Media, SunExpress used Acxiom InfoBase® data to gain deeper insights into UK-based travellers interested in Türkiye. With Acxiom, the airline analysed consumer behaviour patterns, identified key trends, and built audience segments with distinct personas to develop more relevant messaging. Territory Media then aligned the media strategy with these segments for optimal activation in the paid media space, including social and paid search.
By putting their data to work, airlines can better understand their customers and reach them with relevant, meaningful experiences. And it’s this ability to personalise experiences that will enable airlines to soar above the competition and put them on a (flight)path to sustainable growth.