By Srinivasan Radhakrishnan

The Airlines Industry is one of the most scrutinized  sectors where customer experience creates international headlines while the capital expenditure pressures and the revenues follow the cycles of the very expensive flight fuel and can take a company to bankruptcy in a couple of quarters. In the midst of all of this the airline sector has to really innovate in every small way possible for the best of the customer experience and the enhanced bottom lines. In my own small way, I bring out the some of the approaches taken that have been trendsetting in the airlines sectors.

Improving Passenger’s onboard experience on In-Flight Entertainment (IFE)

Following the success of the deployment of virtual reality (VR) headsets on air routes in the United States, FlixBus also partnered with Inflight VR to offer immersive entertainment to its passengers on the routes. Their aim is to make today’s most emerging technology work, and thorough approach addresses all technical, logistic, usability and rights management aspects to make this a seamless way for FlixBus to amaze their passengers and build a closer relationship to their brand.

The VR-powered IFE platform allows for many different third-party application integrations ranging from VR storytelling to destination-based content, such as sightseeing tours or tourist shopping. The platform has the potential to be an entirely new form of IFE that can generate revenue for airlines.

Increasing accountability of Revenue Management

Airlines always track the volume of sales its reservations agents make and also track time taken for a ramp services team to unload an aircraft full of bags. But what does a revenue management analyst bring to the table?  The models of revenue management and optimization enables most of the decisions. But it is about increasing the accountability of the analyst.

There are various metrics that can showcase it. There are metrics that can calculate both the total forecast accuracy and forecast the extra value add brought by the analyst (how much his/her interventions in accuracy improvement). A “revenue opportunity” model calculates missed opportunities- e.g.- seats went out empty or alternatively too many low fare seats were sold.

Other metrics, in addition to unit revenue changes, include frequency, and documented logic for model interventions. More qualitative measures include increased expertise in analytics and participation in group and interdepartmental discussions.

Using Available Seat Miles and Load Factor

 Available Seat Miles (ASM) may make load factor more understandable. The ASM of an airline measures how many passenger travel miles are available at a given time which is used to express the capacity of the airline. Higher load factor values make the airline more profitable by spreading fixed costs across the passengers.

Using the ASM and load factor, investors can determine the revenue gained when planes are filled to a particular level.  Airlines typically have thin profit margins and must have high load factors to stay profitable.

Strategic planning entails the use of Break-even load factors.  Budget airlines focus on high load factors. While the premium players charge more for their services and stay afloat even with lower load factors.

Monitor and Control Risk in Aviation Hazard Management

Best practices dictate that risk is minimized to as low as reasonably practical with the implementation of “controls in depth.” Implementing “controls in depth” means that there will always be redundancy, or a failover mechanism should a hazard manifest itself and the primary risk control strategy fails.

The cost of controlling hazards’ risks is always considered whenever determining what is “reasonably practicable.” Cost really jumps to the forefront of any risk management discussion whenever costs are grossly disproportionate to the risk. For example, implementing expensive risk controls may not be required for managing low level risk hazards.

Short term corrective and preventive actions often play important roles in mitigating risk until the operator has sufficient time and resources for a long-term solution. Risk control are not always of the corrective or preventive nature. Another very important type of risk control in aviation SMS is the “detective risk control.” Detective risk controls are designed to alert either users or monitoring equipment that a hazard is developing. It is highly likely that your risk management processes have a combination of all three types of risk controls.

Improve Customer Services

The basic rules of airline customer services are follows:

  1. Offer the lowest fare available.
  2.  Notify customers of known delays, cancellations, and diversions in proper way.
  3. Deliver baggage on time, and support an increase in the baggage liability limit.
  4. Allow reservations to be held or cancelled, and provide prompt ticket refunds.
  5. Properly accommodate disabled and special-needs passengers.
  6. Meeting customers’ essential needs during long, on-aircraft delays.
  7. Handling “bumped” passengers with fairness and consistency.
  8. Disclosing travel itinerary, cancellation policies, frequent flyer rules, and aircraft configuration.
  9. Ensuring good customer service interaction between code-share partners.
  10.  Make sure CRM team provides more effective responses to customer queries and concerns
  11.  Make sure IBE(Internet Booking Engines) provides nearby good hotels, Rental cars, holiday trips and Insurances  to enable easy access for customers
  12. Good relationships with travel aggregators

If these facets are covered airlines have a good chance to stay profitable and happy!