Up until the unprecedented spread of COVID-19, the Airlines industry was recording a steady growth in passenger numbers. In the near term, after the COVID-19 pandemic has been contained, most people may not consider international travel a top priority due to reasons like fear or economic slowdown. Many questions are being raised without clear answers.
The current crisis demands that the industry accelerates actions to reduce the impact of negative cash flow. Airlines will need to get their think tanks together along with their business partners who can strategically support in the revival process.
Airlines have struggled with challenges around fuel cost and hedging, optimal load factor, leasing cost, fleet maintenance cost, and efficacy of loyalty programs. This crisis has created a window to reimagine ways to counter long-standing challenges, which have quadrupled due to the COVID-19 impact.
While there is an immediate requirement of cutting costs and minimizing losses, there are more challenges to be expected as normal operations begin. Airlines can start assessing the low hanging ones for remedial measures:
- Analytics for assessment and prediction: Predictive Analytics can help assess incurred losses and frequencies at which flights can be operated to sustain cash reserves during losses, and measures to bring down losses in operational routes
- Customer care transformation: Airlines should ensure self-service tools and automation for simple customer enquiries through chat bots. This will help lower costs, enable faster responses and create better customer experience
- Demand generation: Through customer sentiment analysis and tracking of customer confidence indicators, airlines can enable proactive offers and discounts, for instance, personalized offers can be made to future booking cancellations. With such initiatives, airlines will be able to stimulate demand and increase reservations
- Hiring & training workforce: Due to mass lay-offs during COVID-19, airlines will need to hire new staff on a fast-track basis once operations are back to normal to cope with the demand. Training would also need to be executed on fast-paced models
- Standardizing disparate operations: Decentralized operations, disparate processes at outstations, varied cycle times for processing data should be standardized. This would enable shortening of recovery time, and swift and easy to execute business continuity processes
In the near future, we may experience new business models in the airline industry and see airports equipped with contact-less check-in. The new normal would be more sustainable and self-service-enabled with pivotal role played by digitization and automation. The COVID-19 crisis has also raised the importance of e-commerce in the airline industry, however, it’s again a question of how soon can airlines adapt and transform customer touchpoints.