How-airlines-can-reduce-distribution-costs-and-win-more-corporate-customers-with-a-next-gen-direct-booking-system

How Airlines Can Reduce Distribution Costs And Win More Corporate Customers With A Next-Gen Direct Booking System

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Over the last few months, corporate travelers have increasingly been taking to the skies in numbers that aren’t that far from pre-pandemic highs. 

The Wall Street Journal notes a steady uptick in corporate travel transactions since early 2022, especially from small and medium-sized businesses. Notably, the demand for corporate travel shows no signs of slowing down, presenting an immense opportunity for airlines to capitalize on this highly lucrative customer segment.

Every airline executive knows that acquiring more corporate customers, providing them with a memorable, frictionless experience, and optimizing the revenue from each of these passengers is mission-critical, given the beating the sector took in the last two years of sustained lockdowns. 

But is the airline industry capable of making the most of this resurgence in the number of corporate customers?

Legacy corporate booking solutions—airlines’ one-way ticket to revenue leakage and poor customer experience 

Airlines are subjected to high Global Distribution System (GDS) fees when they make their inventory available to travel agents and corporates through the distribution network. 

Aside from that, the GDS only allows airlines to share prices and schedules, leaving them unable to upsell with ancillaries, such as travel insurance, checked bag, priority bag drop, lounge access, priority check-in, etc.  

It is further worth noting airlines reliant on the third-party distribution of tickets to corporate customers can’t offer dynamic ticket prices and packages based on the customers’ purchase history and personal information. 

Making matters worse, airlines that rely on agencies like Travel Management Companies (TMCs) to get clients must pay exorbitant commissions, bringing down the carriers’ revenue from business travelers. 

As a result of all this reliance on external parties to distribute their inventory, airlines have no control over the revenue from this crucial segment. 

Reimagining corporate booking with a next-gen direct distribution platform 

To overcome all the pitfalls of the traditional corporate booking system, airlines desperately need a direct distribution system that offers an end-to-end self-service portal for corporates to seamlessly book tickets across multiple channels by integrating with the airline’s passenger service system and corporate Human Resources (HR) software. 

Such a solution will drastically transform the corporate customer experience, given that the business travelers can get ancillaries, discounted tickets due to non-reliance on the GDS, and further ensure that all their company policies are followed—all in a single platform.

Crucially, airlines will be able to handle multiple corporate accounts with the solution and provide their customers with curated offers and travel packages, leading to higher retention rates. Another way airlines can utilize such a solution to bolster corporates’ favorable view of them is by offering loyalty programs, the ability to book tickets in multiple languages, multiple currency options, etc. 

With the platform in place, airlines can potentially save millions of dollars by distributing their content directly to their target audience instead of depending on the GDS or travel agents. Business travelers will also enjoy the convenience that a direct distribution solution offers; corporate staff can book tickets straight from the airline, get approval from their management, and issue the ticket directly or via a travel management company within seconds. 

Since it is a self-service platform that supports mobile and desktop, airlines will have an easy time onboarding more corporates. Also, airlines can delight customers by bundling and unbundling fares, setting up specialized cancellation policies, allowing them to create and manage PNR directly, and enabling them to reschedule as well.

In addition, airlines can draw up pricing agreements with companies or groups of companies that belong to the same customer segment. Upon finalizing the fare, customers can access the booking portal to purchase inventory at the negotiated discount prices directly. As a bonus, the corporate can maintain a direct relationship with the airline, leading to better deals. 

However, the biggest benefit is providing interactive reports to your customers that outline how their business travel program is progressing. Details include whether employees adhere to the company’s business travel policies, how much is being spent, what trips need to be approved, etc. 

Conclusion

As business travel demand soars, airlines need to immediately figure out a way to provide their corporate customers with a direct booking tool that is cost-effective, easy to use, and personalized. With a solution like AgencyDirect, airlines can offer customers unparalleled ease in managing travel policies, self-booking & ticketing across multiple platforms, and trip approval workflows. The airline can also rake in unprecedented revenue due to the increased ancillary sales, distribution cost reduction, and betterment of customer experience. To witness the solution in action, schedule a demo by emailing marketing@infinitisoftware.net

Check-In Counter of An Airline - A Blog Banner for the Future of Customer Segmentation

Customer Segmented Distribution – The Future Of Airline Distribution

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For airlines around the world, developing a comprehensive, 360-degree view of their customers is vital. As the travel industry limps back to normal after a couple of years of travel curbs, airlines will benefit massively if they can figure out what triggers an individual’s purchasing decisions. 

To do this, and turn customers into assets, airlines need to create and cater to segments based on value, behavior, and needs. 

Enhancing the travel experience through segmentation 

For everyone from corporate customers to retail customers to large packs of tourists, airlines can apply segmentation to provide optimal fares, offers, and ancillaries. The segmentation can be based on anything; flying frequency, demographics, etc. are all considerations.

But how does such segmentation help airlines to the extent that it is embraced as the future of airline distribution?

Maximizing the revenue from retail customers

Retail customers are generally low yield fliers but viewing them as a segment with specific needs will go a long way in maximizing the returns from each seat. The key is ancillaries, such as food options, drinks, covid insurance, etc. 

Within retail customers, you can have segments based on paying capabilities, which is an approach that has been successful for Delta Airlines and many others. Notably, Delta managed to offer enhanced personalization with the help of products, such as Delta’s Economy Plus, which targets affluent couples.

To optimize its revenue, the airline tailored its NDC content, pricing, and retailing channel based on the requirements of the target group.

Making the most out of corporate travel

Generally, corporate customers don’t mind surge fees for late bookings, and they will also prefer to fly with comforts, such as priority boarding, checked bags, onboard meals, etc. Some airlines even provide Wi-Fi and business lounges for this passenger segment. 

With highly granular segmentation and insights from customer behavior, airlines can further provide business travelers with stellar customer service. For instance, when the airline knows that someone is a business passenger, they can offer easy flight cancellations, seat upgrades, and notifications during disruptions, which will go a long way in bolstering customer retention. 

Taking advantage of group bookings

Tourists, religious pilgrims, corporate group bookings, and mass requests from travel agents can all be treated as different segments that airlines can take advantage of with personalized pricing and product offers.

Flights like Malaysian Airlines have dedicated Hajj trips with flights that serve only specific meals that are consistent with the occasion, have prayers onboard at the prescribed times, etc. This has been a huge revenue generator for the airline. 

Further, travel agents may look for discounts in exchange for a large number of ticket bookings that will come in consistently every month. Airlines can make use of demand forecasting and seasonal tourism data to provide optimal pricing for them.

Apart from this, companies that have employees traveling in large numbers can be served with loyalty programs, access to premium business lounges, etc. 

A surprisingly underrated passenger segment 

In many countries, governments mandate their employees to only travel on their national carrier. This can be a lucrative segment for airlines if they can provide the government employees with a dedicated portal for bookings, cancellations, and unlocking rewards for flying frequently. 

NDC-enabled merchandizing 

As NDC adoption takes off, airlines can also segment customers based on shopping data and customer intent. Enhancing the NDC-shopping experience will go a long way in helping airlines enhance the conversion rate and customer experience. Moreover, this allows the airline to keep customer needs at the center while designing future products, bundling fares, and making marketing decisions.  

Conclusion 

Not all passengers are the same. As air travel becomes increasingly common, airlines need to figure out how to effectively cater to nearly 3 billion passengers from different backgrounds. With customer analytics, airlines can successfully implement value-based segmentation and consequently boost profits.  If you are looking for a solution that can handle customer segmentation for you and provide you with actionable insights on how to cater to them for optimal revenue, reach us atmarketing@infinitisoftware.net 

An Airplane Surrounded by 5 Sales Component Pictures that represents the Airline's Ancillary Sales

What Ancillaries Should The Airlines Focus On In The Post Covid Era?

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Long before covid, airlines—especially the budget carriers— have been boosting their operating margins with ancillary revenue. Ancillaries, which are non-ticket sources of revenue for airlines, brought in 109.5 billion U.S. dollars in 2019 alone.

Since the pandemic has made passengers pickier—they expect personalization and higher safety standards—and airlines need a massive boost in revenue to recover from the devastation caused by international travel restrictions, ancillaries are expected to lead the way.

Choosing the right ancillaries to focus on

Emerging from the pandemic, customers have a variety of concerns they need resolved before they can trust air travel again. A few of them are: 

  • Increased safety measures
  • Flexibility in pricing
  • Modular offers for corporates

Meeting these should be an airline’s primary focus if they want to rekindle passenger confidence in flying and provide a seamless journey for their customers. This is because customer behavior has seen a massive shift due to social distancing requirements, fears of infection, the economic downturn, and the shift towards online buying. 

The way out of the pandemic—personalizing the passenger experience

To stay relevant and gain increased customer loyalty, airlines need to focus on personalization the way Netflix and Amazon have been able to, by moving from a product-focused approach to a customer-focused one.   

Here are a few of the ancillaries that you can offer passengers in light of the pandemic and your efforts to fill more seats with high-yield passengers. 

Covid related health measures

Passenger confidence will be boosted if you take the initiative to offer ancillaries, such as travel insurance and baggage wrapping and immune boosting kits to protect from infections. Ensure that the insurance is affordable and comprehensive, covering aspects like screening, telemedicine, treatment, and quarantine costs.  

Also, you can take a cue from a variety of tour operators who are offering tours in Russia with a twist—you will be given the vaccine on arrival. 

Moreover, some airlines are allowing passengers to book seats or whole rows near them to ensure social distancing. This can be quite lucrative if airlines are able to automate the booking process and make sure those seats are blocked from being booked by others.

Crucially, passengers also need to be offered the ability to cancel without any penalty if they contract covid.

Modular bundles for business travelers 

Identifying flights or timings with more business travelers and offering something as simple as Wi-Fi will do wonders for your bottom line. Also, offering business-class lounges, extra legroom, transport facilities in their destination, etc. for corporate travelers can significantly boost ancillary revenue.  

To attract more corporate clients, airlines can also begin offering tickets that offer changeability of the seat, refundability, and easy upgrades. 

Frequent flier rewards 

Airlines can present passengers with the opportunity to be part of a rewards program that benefits the fliers every time they use the services of the airline. Seeing rewards accumulate will serve as an impetus for many to become loyal to the brand.  

Further, the airline can make money selling loyalty points to credit card companies who pass it on to their premium customers. These customers go on to become patrons of the airline.  

Tour packages

Tourists and religious pilgrims will form a substantial part of airline revenue for the next few months, given the reluctance of many business travelers to begin corporate travel because of factors, such as remote work.

 So, catering to the tourists with fully packaged trips to their dream destination, including car rentals, hotels, and food, will serve to delight your passengers and add to the bottom-line as well. It is worth noting that airlines can profit from offering relaxation or wellbeing-themed tours because of the effect that the pandemic has had on people’s minds and bodies.  

Conclusion 

Airlines need to come up with innovative, personalized products through dynamic bundles across all touchpoints and channels. Doing so will go a long way in giving the airline a competitive advantage amidst these turbulent times.  \

If you want help with offering customer-centric ancillaries to optimize your revenue and strengthen recovery, don’t hesitate to reach us at  marketing@infinitisoftware.net 

MICE-Automation

MICE Automation: A growing opportunity for Airlines

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“Even as everyone prophesied that the rise of digital would do away with face to face business, precisely the opposite is happening now. The value of in-person meetings are rising, and the need is only getting bigger and bigger, much to the delight of the travel industry.”

Just scroll down your LinkedIn feed, and be astounded by the endorsements of countless conferences happening around the world. Surprisingly, the more people are getting plugged-in through the world wide web, the more the hunger is to have face-to-face interaction. Knowledge and doing business are no more confined to a particular tribe. MICE (Meeting Incentive, Conference, Exhibition) give people from diverse geographical locations the opportunity to connect, share and learn. But for corporates, event managers, TMCs managing travel for such large events are complex and labor intensive.

The role of Airlines

MICE industry is booming! But MICE planners are struggling to find an efficient way to manage such large scale movements of people across geographies. Airlines can make things easier by providing a platform that enables MICE group booking. This allows airlines to attract event planners to their website directly and hence reduce distribution and servicing costs.

How can airlines make conference group booking a breeze?

Though MICE is a profitable segment, the conference group request is a challenging process for the airline’s group desk. This is because airlines follow a manual process which is operationally inefficient leading to high turnaround time and error prone. However, with technology airlines can overcome the hurdles faced by the group desk in their day-to-day operation.

Furthermore, the airlines can redefine their groups business by allowing less than ten passengers from every single origin to get access to group fares as long as the overall size of the group is above their group booking threshold.

The technology breakthrough

Airlines can fulfill conference group travel request effectively with a fully automated end-to-end solution. An airline group booking tool makes it easy for customers to raise travel request mentioning multiple sources and the destination. Once the system receives the request, it responds instantly with the ideal quote. This is possible as the system can automatically calculate the fare considering several pre-set conditions. Also, through a negotiation platform customers get an opportunity to negotiate group fares. Group bookings require timely reminders for payment and name list submission. Automatic follow-up increases the probability of conversion. Over and above for monitoring purpose, the system also keeps a record of all information and generates reports accordingly. For more understanding, let’s take a closer look at how technology can combat challenges.

Faster revenue accounting process

MICE booking involves multiple request ID generations for various PNRs. Details of their sector-wise revenue and payments received from time to time are recorded manually. A little alteration may result in a mismatch in the accounting process. A group booking tool generates a single request ID for all PNRs. This helps the reporting engine to auto capture the details and maintain accurate records of various financial transactions.

Gaining visibility and control

It is difficult for the airline’s group desk analysts to track the status of every MICE request and their resulting impact on the revenue. Group Desk analyst can get complete visibility on all transactions and easily identify violators. Airlines can now efficiently run reports to see the effectiveness of their group booking program.

Group Travel is growing exponentially, and airlines around the world are consistently trying to make group traffic management more efficient. A technology solution for groups provides automation and allows airlines to pursue newer markets and reduce cost. Worlds top airlines have already started tapping this lucrative segment. Is your airline ready to take the next big leap with MICE group booking?