TORONTO — This is a brave new world for airlines, as well as for anyone invested in the business of selling airfares, travel agents included.
And while travel restrictions are lifting in many countries around the world, and travel is largely reopening, airlines are still facing headwinds in their recovery.
Part of the issue is consumer confidence – not just because of COVID, but from confusion about airline cancellation policies and the like.
Jay Sorensen, President, IdeaWorksCompany puts it this way: “‘I remain quite optimistic for the summer of 2022,’ is a quote you will likely hear from dozens of airline CEOs … it’s human nature to hope for the best, and one can hardly fault a CEO for declaring brighter skies are ahead. However, the pandemic has been a painful episode of advances and withdrawals. Off-camera, these CEOs should be pushing their teams to improve traveller confidence.”
IdeaWorksCompany’s latest report, sponsored by global travel tech provider CarTrawler, is ‘Advice to Airline Managers – Don’t be Paralyzed by the 2022 Consumer Challenge’.
The report includes a chart listing the COVID-era change and cancellation policies for 25 leading global legacy and low-cost carriers. It also includes 5 call-to-actions for airlines looking to better serve their passengers, and improve financial sustainability. The report, along with the chart, can be viewed here.
This time around we get Sorensen’s take on the 5 call-to-actions, and what airlines are getting right – and might get wrong – in this challenging transition period from pandemic to recovery.
1. PROTECT CONSUMERS FROM TODAY’S TRAVEL UNCERTAINTY
In the report Sorensen highlights Air Canada as one carrier with no expiration date for COVID change and cancellation protections.
“There are not many airlines that provide robust and continuing assurance for travellers from the uncertainties created by COVID,” says Sorensen. “This includes a basic decency of accommodating changes required by border closures, negative test before departure, and illness from COVID.”
2. IMPROVE CLARITY OF FARE RESTRICTIONS
Low-cost carriers typically do a better job than traditional airlines of presenting fare conditions, says Sorensen.
We asked him if traditional airlines are following suit and getting better with spelling out fare conditions, or if they’re content to leave this clarity to the LCCs.
“The failure, to be fair about posting fare restrictions, is a legacy airline problem,” says Sorensen. “Low cost carriers came ‘out of the blocks’ with aggressive fees for reservation changes. Thus they were very transparent about it – they had no issue charging these fees and wanted no consumer confusion on the topic.”
He adds: “Legacy airlines have been reluctantly brought to the table of these fees when they adopted supersaver fares in the 1980s. Yes, that’s how old the tradition is for global network airlines. Since then, these airlines have added layer upon layer of changes without ever redesigning the process for the digital age. The result is a mess for consumers and failure by regulators to require fare conditions be simplified and written in plain language.”
3. ALLOW FRIENDS & FAMILIES TO POOL FREQUENT FLYER POINTS
We wanted to know, did the pandemic’s tough times force airlines to loosen their control on their frequent flyer programs?
“The pandemic has really messed with the statistics of frequent flyer programs,” Sorensen tells Travelweek. “Suddenly, all the top tier members were inactive. What’s an airline to do? Well, they extended the qualification period to ‘earn’ back elite status multiple times. The problem being — those that once were high-flyers, are very likely to never achieve that status again. That’s because their jobs changed, corporate travel changed, and the world changed. So the data of these programs needs to be rebuilt from the ground up; programs need to determine who will be the top flyers. And, will the previous levels of activity return?”
Sorensen adds: “Plus there’s a new category of traveller — the premium leisure traveller — and the airlines are just discovering this. It will be a while before they develop loyalty strategies for this category … and these folks are valuable because they are willing to pay higher fares for premium economy, and maybe even a discounted business class seat.”
Sorensen notes that Singapore Airlines now allows family members to aggregate frequent flyer miles.
4. PROMOTE FLEXIBLE HOLIDAY PACKAGES
The one clear message that’s come out of the pandemic for the travel industry is the consumer’s insistence on flexible booking policies.
We asked Sorensen if he thinks airlines and tour companies will attempt to rescind their flexible policies once ‘normal times’ return.
He notes that the vacation division of European LCC easyJet — easyJet holidays — provides a good example of a thorough and well-conceived policy for consumers.
But, he adds, “my industry has a sad reputation for having a very short memory. At present, I don’t think airlines are acknowledging the risks COVID has placed on the backs of consumers. The forward thinking examples provided by Air Canada and easyJet are too rare. I’m afraid the majority of airlines will return to feed from the change-fee-trough as we exit the pandemic. That’s too bad, because some airlines have a long reputation for profits and for not charging fees. Southwest Airlines is the leader of that parade.”
5. BE MORE GENEROUS AND KIND TO YOUR CONSUMERS
The example Sorensen gives for this call-to-action is Icelandair, which flew passengers delayed by mandatory self-isolation home at no additional expense.
We asked him if consumer loyalty to a specific airline is a thing of the past, with the exception of frequent flyer program loyalty.
“I am a forever believer in the power of a brand,” he says. “If an airline wants to portray low fares as its only feature — then loyalty will exist if it has the lowest fares. Otherwise not. That has always seemed to me as a ‘race to the bottom.’ But of course, the majority of consumers – in reality – only seek the lowest price. And so we have an industry which places good service far down the list of important attributes. I guess to paraphrase, we get the government we deserve . . . and we get the airlines we deserve.”