The Covid pandemic has changed our society and our economy in many ways. Some businesses have thrived as a result, including home delivery services, video conferencing, and home remodeling. The travel industry, especially airlines and cruise lines, have fared much worse. Demand initially dropped precipitously when the pandemic hit, and while leisure traffic has rebounded to a large extent, business travel is still far off its 2019 peaks. Given that it takes three to four leisure customers to equal the revenue of one business traveler, this creates a big threat to the largest US airlines, whose models have depended on this premium revenue source.
Like all challenges, the pandemic also is an opportunity for US airlines to emerge not exactly as they were, but better aligned to a post-pandemic world. Here are four specific ways that the largest US airlines can better adapt to the world as it is evolving:
Use Technology For Better Customer Service
Airline use lot of technology. Yet, it is still a people-intensive process once a passenger arrives at the airport, or often in the event of an irregular operation. Airlines collect a lot of data, but haven’t invested in data science at the same rate as physical capital. Almost every customer carriers a smartphone, and this phone could do more than hold a boarding pass and handle some mundane transactions. There will always be exceptions, but removing people from the processes from airport arrival through boarding should be a goal of every airline for both efficiency and better customer service.
We’ve seen this past summer and during holiday periods how tough it is for airlines to operate on thin staff. Finding ways to rely on fewer people is a strategy many companies can take, and for airlines the benefit is that this will improve the customer experience as well by shortening the processing time. When customers can tag their own bags everywhere, check documents, handle flight changes quickly and easily, and have a biometric scanner accept them through the boarding door, it is easy to imagine a seamless and pleasant experience based on technology. I wouldn’t expect that TSA will adopt this strategy, and of course airlines will need some people to handle those without a smartphone or with other special circumstances. But for most travelers on most trips, the processes can best adapt to the post-pandemic world by requiring no human interaction.
Embrace Video, Don’t Be Scared Of It
Gillette has been a leader in the shaving razor space for over a century. They pioneered the disposable blade on a fixed handle, and everyone who shaves knows that the handles are cheap but the blades are expensive. When Bic first introduced a completely disposable razor and handle for a cheap price, Gillette could have fought this to maintain their lead in the more premium space. But instead, they decided to win at both games, and now they are a leader for any type of blade with which you choose to shave.
The lesson here for airlines is that the rapid adoption of video services like Zoom and Microsoft Teams made business happen during the pandemic. Companies learned that plenty could get done this way without all the spending that goes along with airline travel. Airline CEOs have pointed to the need for human interaction and the ultimate return of business travel while quietly being worried that video will replace at least some of the impetus to fly. Surveys of companies confirm this fear, showing they’re not eschewing airline travel completely but finding ways to reduce total expenses by using video strategically.
It’s time for the airlines most dependent on business travel to except this reality, and learn to partner with the video services. Why couldn’t you earn frequent flier points while on a Zoom call, or have a meeting coordinated where some people go in person and others are virtual but all coordinated and arranged by the airline? If airlines are really in the business of solving people’s travel needs, that travel can be physical and virtual. Learn to win at both games, and the airlines will end up bigger and with more business volume and loyalty than before the pandemic.
Add Biological Safety To The Safety Protocols
Airlines have learned how to be incredibly safe. Most people know that flying is much safer than driving, and when anyone is inured or killed on a plane it makes national news. This, while over 3,500 people globally are killed in cars every day. This is not coincidental or only because of good engineering. Airlines have added rigor and measurement to safety protocols using a process called the Safety Management System (SMS). This process measures risk and understands using regular measurement and tracking the areas that create the most risk for safety. This informs the airline how to improve their processes, training, and more to reduce risk and increase safety. Airlines are good at this, know how it works, and most well run airlines have these processes well imbedded in their corporate culture.
This view of safety has not specially concerned itself with passenger biological safety, meaning the transmission of diseases on the airplane and in the airports. It has been focused on physical safety like people getting injured on the job, training to ensure safe flights, and more. The things every airline has learned in the last few years can be made part of SMS, by broadening this umbrella of safety to include transmissible diseases. The structure is in place, and it is the structure that is hard to create and institute in a company. Airlines are in a perfect position to add this new kind of safety to their measurements and tracking, and by doing so will keep us even safer than before the pandemic.
Build Flexibility Into Regular Operating Plans
The pandemic has made airlines realize the value of flexibility. Since demand has changed so quickly, airlines have found it impossible to plan a schedule that regularly meets the levels of demand available. United Airlines made a point to stop forecasting, and instead created teams to be able to bounce back more quickly every time the world changed. This is more realistic, and has resulted in fewer cancellations for United than their large competitors. With so much uncertainty about the return of business travel and ever-changing virus variants, flexibility as an ongoing business model makes sense for most airlines.
This has implications for crew planning, fleet assignment, and airport staffing, among other things. It may change what airline management asks of their teams in the next contract negotiations. It may change customer policies to better react to faster-changing environments. Thinking of how to make capacity deployment more closely tied to actual demand is a tough thing to do and not the way traditional airline scheduling functions normally work. This kind of normality won’t be back for a long time, so why ever expect it to come back? Building flexibility into the schedule plans is the most effective post-pandemic plan.
Change makes people nervous and makes some businesses freeze. Taking what we’ve learned from this pandemic and using it to evolve airline products and processes that are better and more aligned with consumers is a smart strategy. This requires that airlines proactively adjust their businesses to attack these new realities.