WHY SMART AIRLINES WILL FIND VALUE IN PRIORITIZING CUSTOMER EXPERIENCE

It is naive to think that airlines always prioritize improving the customer experience.

There have been – and will be – seasons when an airline chooses to focus more on improving the customer experience because it is more profitable to do so, or at least, to say so.

However, when you consider the consumer behavior of upcoming generations, it would be shortsighted of airlines to dismiss the power of the customer experience in our current season of recovery.

The post-pandemic volatility in the travel industry has put a spotlight on the deficiencies in the customers experience – time-consuming barriers day of travel and, most notably, the impact of irregular operations on the value of the trip.

Any airline working to recover passenger volumes, regain loyalty with millennials and engage Gen Z – who are fast becoming the dominant market – must be seen to be improving the customer experience for their passengers.

That said, there is no industry standard for passenger experience. So any discussion on why or how airlines should improve the experience has to be in the context of this season of recovery and against specific values that impact consumer behavior, e.g. generational, regional, gender and so on.

Key to improving the customer experience

Value, in a service economy, is often measured against how much pain a customer is willing to bear in the retail experience.

It’s hard to make the case that air travel is the experience ultimately consumed in the travel life cycle, when most travelers would agree we use the service of airlines to consume the experience in-destination.

Even the concept of unbundling ancillaries in airline retailing is presented as giving the customer freedom to choose their flying experience. More freedom, better experience, right?

Yet for generations of price sensitive travelers it simply affords them the option to choose which comforts they can do without – or determine the lowest quality of experience they can afford or endure.

Consider this, the IATA threshold for what qualifies as an airline delay is 15 minutes.

However, every airline has a different threshold for when it considers the impact of the delay on the customer experience. Even airlines with the capability of real-time communications will not begin messaging customers until the delay exceeds 45 minutes.

Pain is baked into the unit retailing of the service economy, and it is critical for service providers (airlines included) to determine the point at which pain cannibalizes the value proposition for their customers.

Gen Z: Why customer experience is more important post-COVID

According to an Amadeus report, the number one reason customers move from one preferred airline to another is how an airline handles a disruption event: delay, cancellation, missed connection, etc.

It’s important to note that it is not that a disruption event occurred, but rather, how the airline solved the irregular operation for the passenger – the disruption experience. Almost three-quarters of all business travelers expect a day-of-travel disruption.

This is all the more important when you consider some of the consumer traits of Generation Z (Born 1997-2010) — the generation that began entering the workforce during the pandemic:

• Digital natives: They are the first entire generation of digital-first consumers.
• Travel volumes: While they don’t (yet) have the spending power of millennials (born 1980-1996), they have recently achieved parity with Gen Y regarding trips per person, per year (52% travel more than three times per year).
• Brand loyal: Aside from price, Gen Z (91%) is the only generation that says an airline’s operational performance is the leading factor influencing airline brand loyalty.

What happens when a generation whose retailing experiences have been shaped by on-demand services, no-questions-asked refunds and same-day delivery encounters an industry that has historically never met those expectations, but now in recovery is struggling more than ever?

Focusing on ways to improve the experience of the passenger is not essential, especially when a service is in high demand. Yet in a hyper-competitive market like air travel that is in the throes of recovery, how an airline seeks to mitigate passenger pain points to improve the experience will fare well with the next generation of travelers and certainly impact the long-term viability of the airline.