Aviation Platform

The continental living room effect

How to create an added value with an unique selling point at an airport?
Developed by Nico de Bock and Dominique Vos for KAIA Airport master plan 2033. 

Large intercontinental hub airports are facing difficulties transporting passengers through the terminal(s) with the shortest MCT and making money with retail at the same time. The passengers are too stressed to arrive in time at the gate and pay no attention to the retail facilities. Airports can do better, because research has an answer for this; the living room effect.

What do passengers expect when they use the terminal building of an airport? This is of course different per passenger, as they come from all over the world and have many different cultures, habits and needs. One thing they have in common is the clear overview they want and need, to find the facilities they search for at the airport.

The airport would like the passengers to use the retail area, as this makes the revenue for the airport higher. But due to long walking distances for transfer and possible departing passengers, retail is skipped by the passenger to make sure they are in time at the gate.  

Read more: The continental living room effect

Airline Consolidation

Airline consolidation or just plain working together on a greater scale - because on your own you struggle and possibly drown - is not new, but certainly is considered more during economic downturn. During these periods of downturn airlines tend to focus on operations and cost, during positive periods airlines focus on service and revenue.

Source: IATA

The current economic downturn has made the aviation industry search for options for survival, one option is consolidation. More and more we see forced consolidation due to financial difficulties, wherein mergers and acquisitions are used as a last resort to survive, instead of an opportunity when all is well.

So what consolidation can we distinguish, there are operational partnerships for instance on maintenance or ground handling services, there are the commercial alliances where code sharing and common branding is applied and the financial consolidation with mergers and acquisition of the other airline. The last one is the most difficult as this involves regulation from different countries, politics, and cultural differences and more challenges facing this type of consolidation.

Read more: Airline Consolidation

Brand Engagement, check. Customer Service, check. Revenue?

A few years ago, the question was still a point of discussion, to get social or not? And all airlines have found a reason to why they should get social, being the incident of the ash cloud or that they noticed their competitors were coming up with all kinds of ideas to get their brand out there. Now, a few years later, every airline has at least one social media platform, and social media is here to stay. What have we seen in the airlines business the past few years?

• Over 75% of airlines invest more than 90 person-hours per month- and only 3.4% dedicate less than 10 hours.
• Cross-functional roles are commonplace for social media teams, with 85% employing cross-functional teams.
• Customer service emerging as the most common cross-functional role.
• Business goals of social media investment are: 1) brand engagement 2) customer service 3) revenue.
• The biggest challenge faced by airlines is the insufficient allocation of resources to social media.
• Over 70% of respondents plan to increase their social media budget in the next year, showing an increase over Simpliflying’s 2011 report.
  

Let’s discuss point four again, brand engagement, customer service and the ultimate goal (I would think), revenue. The first to points were a challenge in the beginning, but now, most airlines know how to get their brand out there with social media and use most of their social media platforms as a customer service. I bet most of us have already contacted an airline through Facebook or Twitter knowing we’d get a response sooner than filling in a contact form or finding the right number to call (right?).

Read more: Brand Engagement, check. Customer Service, check. Revenue?

Possible solution for full service carriers? If you can’t beat the low cost carriers, join them?

The position of the low cost carriers (LCC’s) is undeniable. Especially here in Europe, Ryanair and Easyjet are daily found in aviation news. Many of my friends have travelled by plane, but only half of them has ever flown with a full service carrier. Especially the friends who aren't interested in aviation, they just want to fly with the cheapest airline, they don’t care about the rest. And that is what makes LCC’s so strong in today´s society. On non-business related short haul flights, passengers hardly care whether they get extra service or not, as long as they can save that extra ten euro’s. The old FSC’s like Airfrance/KLM can no longer deny it.

The start of Easyjet and the start of the new market strategy of Ryanair was the mark of a new era in the aviation world. While the FSC’s and flag carriers like Airfrance/KLM and British Airways just stood there and watched, as the LCC’s grew exponential. There was nothing they could do against it. This whole LCC market was made possible by the 7th freedom of the air within European Union: cabotage. Cabotage is when a company from one country, for example Ireland (Ryanair), is allowed to exploit profitable flights from a different country (Germany) to another country (Hungary), without making a stop in the company’s home country. This opened up an entire continent for the market of LCC’s.

Read more: Possible solution for full service carriers? If you can’t beat the low cost carriers, join them?