AIX Virtual: Passenger engagement the future revenue driver
With business travel expected to recover slowly and unpredictability in passenger numbers, airlines are looking for ways to drive revenue before, during and after the journey. Perhaps the two best examples are AirAsia’s Super App and Singapore Airlines’ KrisShop. The platforms seamlessly morph the passengers’ digital experience with the lived experience, from food delivery and ride hailing to thousands of products available for inflight shopping.
The industry is in the beginning of this revenue-driving transition, and The Passenger Experience Conference, running alongside the Aircraft Interiors Expo (AIX) and the World Travel Catering & Onboard Services Expo (WTCE) Virtual, covered an in-depth discussion on converting passengers to customers at the September 14 to 16 events.
‘Passenger engagement as a service – the new revenue driver,’ highlighted how the entire passenger journey is an opportunity to convert passengers, rather than just in the lead-up to flight and in the cabin. It was moderated by Daniel Welch, Co-Founder and Senior Consultant at Valour Consultancy. Speakers included Kian Gould, Founder and Chairman at Omnevo; Chris Pok Chief Executive Officer of KrisShop, a Singapore Airlines Travel Retail Division; Manuel Hübschmann Retail Director at Retail inMotion; and Kevin Clark, CEO of Bluebox Aviation Systems Ltd.
The session kicked off by addressing that the traditional method to onboard sales presents boundaries that prevent airlines from becoming full-fledged lifestyle and travel platforms. While there was a better idea of volume pre-pandemic, there was also massive waste and all kinds of risks associated with selling onboard, said Gould. During the pandemic, many airlines discontinued or paused retail operations and at the same time, passengers’ behavior and choices changed. Having just a few F&B options is no longer what people expect, accelerating the need for an updated model, he said.
“The suppliers and the vendors in the industry recognize the slightly new world, and we need to look at how we [can] work together technologically, commercially to be able to come up with capabilities that allow airlines to have the kind of choice that that they're going to expect,” said Clark.
“There are a lot more opportunities out there that the airline can actually tap by transforming the model,” agreed Pok. “In the sense that the customer base, whether they’re flying or not flying, remains your customer.”
The discussion addressed the role of IT, data and data ownership, as well as the approach of using digital technology to enhance the airline offering, rather than for the airline to build the offering around the digital opportunities.
“Technology is an enabler, it's not a business strategy itself,” said Hübschmann, “You're not going to be successful by simply adding technology onto your existing business strategy. It is crucial to know what you want to achieve with your strategy and to identify the right technology and the right data to enable that.”
In order for airlines to monetize the technology and data, they need to own it, added Gould. Rather than outsourcing a company to manage the retail, and another company to manage and own the data, airlines should work with companies, such as Omnveo, to facilitate ownership of the data in order to create a “holistic customer engagement,” he said. “Ownership of that data is crucial for the airline to have, in our opinion.”
Speakers also looked at possible solutions and how airlines can build the business case for becoming a travel and lifestyle platform – and applying best practices to maximize revenue generation.
Pok said transforming the traditional airline retail business model is a long-term project that “requires a lot of investment.” He added that part of the success of KrisShop is due to its shareholders. Singapore Airlines was able to become one of the majority shareholders in KrisShop by insourcing, a critical investment for the airline that helped “realize this vision,” Pok said.
AIX and WTCE Virtual replaced the live editions, which will not take place in 2021 due to the ongoing challenges and global restrictions on international travel. AIX and WTCE will return to Hamburg from June 14 to 16, 2022 at the Hamburg Messe.
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