The World Low Cost Airlines Congress held at the Sofitel LHR from the 16th to 18 th September was a mix of leading global carriers, traditional airlines with short haul subsidiaries and low cost airlines in the same room looking to understand what common features they could utilise from each model to make for a more prosperous airline.
Although Michael O’Leary had good sport with the fact that IAG, KLM and Norwegian (“low cost only for Norwegians”) were on a panel at a low cost carrier conference, both IAG and KLM have low cost subsidiaries and as Willie Walsh pointed out, “no-one should be too proud to learn something new”. In an era of consolidation, high speed rail competing for passengers and high fuel costs etc., this principle makes sense. All airlines should be looking for new opportunities that add value for their customers and their brand. Stephen Sackur (BBC correspondent) even suggested Willie Walsh should look into his crystal balls (I kid you not!) for a glimpse of what the future would look like for IAG.
Managing costs is as important as new revenue streams, and traditional airlines are reviewing their businesses to compete with low cost airlines. Many of the traditional airlines such as IAG and Air France-KLM are reviewing all parts of their business to reduce costs such as trimming routes, renegotiating staff contracts, and buying newer fuel efficient planes and back office systems. Their low cost subsidiaries may get costs on a par with carriers such as Ryanair and easyJet, but providing a full service means that costs will inevitably be higher for other airlines in the group. Michael O’Leary’s view was that good customer service is low fares, on time flights and no lost bags. If you get passengers to carry their own bags on to the plane they won’t get lost; a high price for checked baggage does everyone a favour.
For others, customer service goes beyond this and key themes covered in many of the interactive sessions were; customer experience, customer profiling, personalisation and optimising cross-sell. Understanding that customers engage in different ways though their travel journey, at different touch points and use a variety of devices, so their experience should be seamless. Airlines can take a more personalised approach to customer interaction and don’t need to look into their crystal balls; they can leverage the technology that is already enabling airlines to engage customers and drive significant incremental revenue.
Mike Naylor
Business Development Director, Datalex