How airlines can take control of pricing and personalize offers

Many airlines invest in technology to create personalized offers that meet the individual needs of consumers. Among these are unbundled product offerings from full-service airlines prompted by pressure from low-cost carriers. The result has been more choices for consumers: They can now purchase only the services they really want.

Airlines need to know what the customer actually wants — it’s an important part of the game. Personalization should not “trick” the consumer into paying more. Rather, airlines must understand the customized travel experience the consumer needs for each specific journey.

Today, airlines offer air travel via many different channels, from a corporate booking tool to a mobile app and even a multi-airline metasearch engine. Consumers increasingly search in multiple channels or use metasearches before booking. Personalizing a product that’s offered in multiple sales channels poses a challenge to airlines, which ultimately want control of their offers and the ability to personalize them.

Airlines that want to develop these more personalized systems usually look for the following features:

  1. Understands the context. Airlines want to leverage technology to create the “best possible offer” as opposed to the cheapest. For some consumers, the best offer will include a preferred boarding status, the ability to take extra bags onboard and upgraded seating. For others it might be a stripped-down basic economy price that’s a no-frills package at the most competitive price. It’s important for the system to understand the context because the same customer may need Wi-Fi and lounge access for their business trip, but wants a no-frills experience for a weekend vacation.
  2. Controls the offer. Some airlines focus on direct sales only, while others want to offer a consistent personalized and contextualized experience for the customer, regardless of the channel. Traditional airlines find themselves limited by the capabilities of third-party distribution systems. For example, most corporate booking tools or search sites do not let an airline customize bundled flight options based on the ability to maximize loyalty benefits such as upgrades. Technology partners must find innovative ways to meet the rising expectations of travel consumers, regardless of which channel they engage.
  3. Calculates offers dynamically. Airlines need systems that can react on the fly in response to changing situations. For example, using geotechnology to locate a customer already at the airport and offering a discounted premium seat on the second leg of his flight. These new technologies let airlines make the right offer to the right person at the right time, which will boost revenue and increase customer satisfaction.
  4. Engages mobile users. Millennials have made their way into the job market, which means more business will be done on smartphones and other mobile devices. Airlines must make the right offer at the moment a person feels inspired to travel. Millennials also tend to shop around more for the best offers – using their mobile devices. To keep pace with these new customers, airlines should offer highly functional mobile versions of their booking systems.

While personalizing consumer services may require airlines to change the way they do business, with some creativity and strong leadership from top management, the major airlines have some exciting opportunities to stay relevant in an increasingly competitive market. It’s now more than clear that consumers are demanding these more personalized services, so now’s the time to respond.


Matthew D_Antonio headshotMatthew D’Antonio is the Offering Leader responsible for airline pricing services at DXC Technology. He specializes in fare and ancillary pricing, revenue management, merchandising, availability algorithms and dynamic pricing. Matthew has more than 10 years of experience in the Information Services industry and has a wide range of aviation IT experience from large commercial airlines to the U.S. Department of Defense. In his spare time, Matthew created and implemented an ongoing weekly support program for youth with life-challenging conditions in the Miami area. He is also a frequent speaker at professional events in his local community.

Comments

  1. Sachin Koranne says:

    We did work on the model of pricing and various modes of revenue generation with few of our Airline clients but its very tightly held area by all airlines and they generally want to do it themselves by picking up ideas from SIs.

    Like

  2. Excellent summary of challenges and expectations from Airline Industry and customers, respectively.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: