We are currently stuck amidst one of the biggest crises that has hit the airline industry in the last two decades, the debate revolving around personal choice and equity will gather more attention as all of us are trying to figure out a way to recover from the Covid-19 pandemic. The industry that has been most affected by this pandemic is the airlines industry which is struggling since the end of last year.
How to protect revenue during Covid-19 outbreak
Given the major impact that the industry is facing due to COVID-19, many airlines have stopped their services to comply with government regulations. Looking at the airspace in the current time, showcases empty pockets over many countries that is frightening to watch. However, the industry is expected to get back on its feet by the end of the quarter and to help out the airline industry in order to stop revenue leakage in its value chain, a crisis management strategy needs to be adopted and a separate strategy to bounce back in a post corona world also needs to be envisaged.
Taking into consideration the importance of airfare rates, airlines of today cannot continue to only tweak their revenue management strategies and models at the surface level and expect it to turn out well, a more data driven approach needs to be taken. With the increase seen in artificial intelligence, companies adopting smart devices and sophisticated algorithms- the focus has now shifted from the product itself to the person at a granular level.
That means we might witness or make a personalized consumer journey which is no longer moving from awareness to consideration to purchase linearly. Instead of that, there will be various digital touchpoints and all of them will be unique and personalized to every single consumer.
When talking about personalized commerce, it has gigantic implications on the airline industry. The true potential of personalization has not been seen currently and it's really just the tip of the iceberg that has been exposed. It is exciting to imagine if various airlines started moving towards the choice of the user, wherein they will have all the control and would expect ancillary offers and fare personalized for each search.
Making the right choice during the age of disruption
Most of us are working from home right now, so it goes without saying that COVID-19 is altering our day to day lives and not only in your country but around the world, every company and citizen is struggling with the virus and its potential impact on the global economy. According to a study by IATA, it is believed that the airline industry stands to lose close to $110 Billion due to the pandemic.
Airlines slow recovery
We all know that airlines might recover a bit slowly from such demand shock, but the inevitable decision they will have to make here is whether to alter offerings that will help increase revenue or optimize their revenue strategy using data backed statistical models. The answer is, a balance between both. In the past decades, the airline industry has gone back and forth on equality v/s choice of the individual as traditional players that had standardized offerings were against the disruptors who practised personalization and micro-segmentation to appeal to the needs of the individuals.
With digital technologies that are threading through the travel industry, exploring more about how, with, where and whom they should do their business with, during this, the slow-moving corporations were forced to meet with disruptors head-on. The digital transformation has nearly been completed, and it has taken over the travel and hospitality industry.
We are now faced with a challenge that roots from that very same transformative technology. Even though we have now shifted from "one to many," in this the travellers were sold products keeping in mind the broader segmentation, to "one to one", in this we will focus on travellers micro-needs with personalized experiences across dozens of digital touchpoints spread across multiple devices. Therefore,
These were a few things that can help airlines drive revenue in a corona impacted world. All of this research was gathered by RateGain, a travel technology company. They have recently released a document on the state of airline parity which explains this thought further explaining how the next decade is going to look like, it can be found on their website for further information.