Carriers worldwide are making dramatic business model changes: Sabre
Published: 14 Oct 2009
A survey conducted by Sabre Airline Solutions, featuring 90 airlines across the globe, has revealed that while fuel cost instability and revenue management are among the top challenges for carriers over the next 18 months, it is customer loyalty and retention efforts that are viewed by an overwhelming majority of survey respondents (86 percent) as having the most positive impact on their business.
Customer experience was ranked by nearly 50 percent of those surveyed as the primary issue related to customer loyalty and retention. The importance of developing customer loyalty is part of the unwieldy crisis airlines face today as charging additional fees is viewed by them as one of the top tactics to increase revenues.
Overall customer satisfaction with airlines was down this year, in part because of costs and fees, according to a study released in June by J.D. Power and Associates.
According to 58 percent of those surveyed, merchandising and ancillary revenue will help airlines’ bottom line results. Baggage fees, travel insurance, and vacation packaging were rated among the highest in the survey to generate revenue.
Other key Sabre survey findings:
Comments
worldpolita said on 15 Oct 09:
Almost every airline company has changed it's philosophy because of LCC competition.
In my opinion the question is if in the meanwhile airline companies decided new pricing strategies (running in the no frills carriers ideal territory), wich one of them also had realized coherent strategies with their public image, their roots and their traditional strenghtness;
wich messages do they carried out to customers perception, when in a while all the prices has changed and sometimes who has payed a lot for long time, now see significant cut prices all around:
I think it'sobvious to get the conclusion that before someone has earned more than necessary!
Morevover if time ago, a doubt could have touched people's mind, now people knows that LCC airplane are safe as the major and often newer than those.
All this has a stronger impact because it happens in a world of media with instanct comunications with overloaded promotions: almost everyone has become familiar with "cut prices";
at the end of this scenary economy has collapsed and with it, customer's perception of the differences between a company and another.
THE CHALLENGE
I think customer loyalty now it's easyer to mantain for LCC because they can add services with better profits in quantity and quality, without loosing identity (ergo perception);
the question is difficultier for the major when they CEO only looked at their rivals without rethinking their model years ago, in a better economy.
Pitkin said on 15 Oct 09:
Yes, indeed, customer loyalty and retention are one of the main causes of the loss of revenue for the airlines. So, when are the airlines going to admit to themselves that air travel is no longer the pleasant experience it was 10 and 20 years ago?
The fact is that almost all airlines have cut services so much that many, if not most, air travellers do not enjoy the trip. The profit margin is lost to that percentage of travellers who fly only when necessary.
All this is especially bad in the USA where poorly managed security efforts are pushing away potential customers.
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