We have passed the most profound point of the crisis. A path toward recovery is now in sight, even though a “full recovery” seems to be a thing of the future. The aviation industry has been ravaged more severely by the pandemic than a few others. Travel restrictions to prevent the spread of Coronavirus have been sapping the demands for airlines, yet the situation has been slowly improving over the past few months.
It was predicted by the International Air Transport Association (IATA) that global revenues for 2021 will increase by 26.7% compared to 2020, to USD 472 billion
It remains to be seen what the airline industry is doing to prepare for the new passenger needs and disrupted operating environment though. Some of the leading ones are on a unique journey back to profitability to reach the above-mentioned milestones by leveraging advanced solutions around Revenue Management, Pricing, Sales Budgeting, and Scheduling, etc.
The solutions promise to offer tailored value, more choices, and more control. Here are some of the most evident steps in the direction of profitability:
1. NDC Adoption for Distribution and Bookings
By enabling airlines to connect directly with distribution partners, the New Distribution Capability (NDC) has enabled them to gain control of their inventory and increase the transparency of the offers sold through third parties. Interest in adopting NDC has accelerated in recent months, according to industry reports. Three out of 10 airlines that committed to NDC have already settled agreements with some or all of their GDS partners to sell flights and accessories through NDC.
Digital ambitions rely on the development of NDC, which will provide freedom and great enabling capabilities. It will help to improve distribution and direct bookings at the same time. The proportion of direct bookings will rise to 56 percent by 2023 – a 12 percent increase over the past three years.
2. Personalization and Customer Experience Design
In terms of offering personalized service or offering products/merchandising, approximately three-quarters of airline executives say their passenger service system “isn’t up to the mark”. Now, in the new year and through the road to recovery, personalizing at various levels of a passenger’s journey and interaction with the brand or services becomes imperative.
It is recommended that airlines “shed their technology debt and become customer-centric and resilient by embracing modern, customer-focused technology solutions designed for authentic retailing.
3. Prioritizing Digital Retailing
Right during and after the initial surge of Pandemic, digital retail purchases grew rapidly. As a result of these changes in customer behavior, improving digital experiences and being present on the channels where the customers are spending their time including purchases, has become inevitable even for the airline industry.
Airlines may soon be evaluated or judged on the basis of their customer-centricity – by the customers. Every little experience, especially, occurring through the digital touch-points could make a huge difference for and against airlines.
4. Embracing A Dynamic pricing System
To better meet passenger needs and adapt to changing market conditions, airlines need to be more proactive. Dynamic pricing, therefore, provides the flexibility to respond to market changes and customer needs.
This can relate with the strategies of personalization and customer loyalty boosting. By offering a customized suite of offerings and pricing, airlines can win over their competitors. The wise selection of Dynamic pricing solutions can prove very effective .
5. Tap onto Business and Leisure Travel Needs
The history indicates that the airline industry has seen several downturns and then recoveries, especially around incremental leisure and business travels. By introducing personalized and dynamic offerings both for business and leisure travellers, the industry can limp back to normalcy without compromising on the profitability factor.
Furthermore, innovation doesn’t always have to be complicated, expensive, or tedious. By adding simple incremental innovations, such as allowing passengers to pay using cash and loyalty credits, creating itineraries based on affinity or attribute data, and completing NDC for the distribution of offers across all meaningful channels, can together change the ball game.
Way forward: Path to Profitability
The airline industry might have suffered tremendous losses during 2020 and 2021. However, disruption, innovation and creativity still remain the key drivers for recovery and profitability for this industry. Investing in the right technologies, solutions and strategies, and moving away from conventional approaches to recovery can help accelerate profitability for the Aviation industry.
If you are looking for solutions that could optimize your airline revenue and accelerate profitability without breaking the banks, this is an area where we could help. Connect with us: RTS.Information@RTSCorp.Com