By Diego Gomila, CEO Affilired
There is no doubt that the future looks very good for the aviation industry. Having recovered from one of the biggest crises in aviation history with global lockdown we’ve had fuel prices, labour shortages and global economic uncertainty. But most airlines have rolled with the punches and now they’re back.
With Asia Pacific now re-opening for business it is estimated that around 3.8 billion passengers will take to the air this year, generating $498 billion in revenue. These figures according to the International Air Transport Association. Compare that to 2019 during what many might describe as the last golden age of travel with 4.5 billion passengers taking to the skies (according to ICAO) and you can see why there’s an excitement around the industry. The market is returning – and with a vengeance
So how are airlines going to compete for all this business?
Well let’s just take a step back. Exactly what do travellers care about now and how does that fit in with airlines’ marketing plans? Although much has changed in the last 4 years, it’s important to take stock here. Ticket sales are still driven by price. Customers want a great booking experience and more choice but passengers still want to know that they’re getting the best deal. That is a constant and airlines should not lose sight of this. .
What’s different this year?
Ancillaries will increase and they will get smarter, more competitive and innovative. It’s not just about the existing products available, such as adding bags, choosing legroom seats, or upgrading to the next service class. Airlines will add new products and new vendors to the ecosystem. We’re already seeing how tours and experiences are becoming a standard and in many ways, expected offering with carriers as well as a key revenue generator, but airlines are going beyond and it’s being driven by data.
If an airline’s data shows certain loyalty members always check in let’s say two items of luggage, perhaps pays for a meal and regularly takes a train from the airport then there is an opportunity to deliver a seamless booking experience in one simple transaction. Dynamic ticket pricing has been around for years and airlines will now go to the next level. Bundling ancillaries together dynamically based on preferences and analytics.
Low-cost carriers are competing on a global scale, extending their range of destinations from domestic flights to international and long-haul. Interline technology has opened new partnerships enabling travellers to book flight combinations to new destinations with a single reservation and airlines can move quickly without the legacy limitations usually associated with traditional interlining. Because of these interline and codeshare agreements, the routes that passengers can take can become more complex so airlines will forecast demand at the origin and destination (O&D) level based upon the connections. Airlines will adjust marketing campaigns to maximise sales of these new routes and we will see a shift in strategies, particularly among the LCCs looking to capitalise on these expansions.
The preference for searching and booking flights on mobile phones increased last year and this will continue to grow in 2023. This emphasises the need to increase the booking experience across all touchpoints but also means that marketing and optimizing advertising campaigns will increase across these platforms.
Native Advertising Will Increase
According to Edyn and the Centre for Economics and Business, 34% of Gen Z and Millennials in Europe plan to take longer trips this year than before the pandemic. Airlines will focus on this key demographic and explore strategic opportunities with tools such as native advertising. Sponsored video content across social media platforms will elevate brand awareness particularly among the new carriers looking to break into this lucrative market.
The inclusion of partnerships and affiliations within the marketing strategy will be essential, where agreements with large rewards, loyalties or cash back partners will increase .SEM campaigns will continue to be the cornerstone of every airline’s digital strategy, with performance-based campaigns a preferred cost effective alternative for national or local airlines.
Airlines must anticipate the changes and be ready for when they occur. The global pandemic has proved that the ability to quickly adjust to new realities is what separates successful companies. Apart from the changing aviation environment, strategic planning should be a continuous process that considers customer demands.