The airline industry represents a critical economic engine - according to the trade group Airlines for America, the U.S. airline industry alone helps drive $1.7 trillion in economic activity and creates more than 10 million jobs. Yet despite the current robust worldwide economy, the global commercial airline industry is facing difficult times, with net profits will plummet to a-20.1%with revenues crashing 50% to $419 billion from $838 billion in 2019. In 2021, losses are expected to be cut to $15.8 billion as revenues rise to $598 billion. Financially, 2020 will go down as the worst year in the history of aviation.The commercial aviation market is fiercely competitive and costs for both airlines and consumers are rising. With the emergence of new competitors, the prospect of further digital disruption continuing to impact the airline industry and the COVID-19 pandemic impacts, airlines should prepare for a challenging future.
In order to remain competitive, airlines need to embrace and adapt to the vastly evolving marketplace and invest in a digital future. To do this, airlines are learning more and more about data analytics and location intelligence in order to stay ahead and get a competitive advantage. Investing in these technologies enables them to optimize logistics and create a better, more seamless experience for customers. In return, airlines can expect more loyalty, less customer churn and ultimately more market share. Here are some examples of how location intelligence is moving the needle in this industry:
Identify Share of Wallet
Using a unique combination of geospatial, temporal and flight data, airlines can gain a much clearer understanding of fliers behaviors, travel patterns and airline preferences. This data uncovers insights into market-by-market identification of competitor market share which enables airline companies to answer questions like:
What portion of consumers total flight spend do I capture?
Where am I losing market share and why?
Location data can get even more granular, providing airlines with insights into which airport has the largest share of customers who split their loyalty between several airlines and what other airlines loyal fliers fly with. Airlines can also discover which markets competitors are doing well in and can also identify the top city pairs.
Understand Flier Behaviors and Demographics
Outside of the airport, foot traffic analysis is utilized to see real-world patterns of movement of anonymized mobile users in a privacy-protected manner. This information provides an in-depth understanding of fliers’ offline behaviors, their demographics, patterns of movement, brand affinities and loyalty. Airlines can use this knowledge to segment their customers into audience groups. Using this data, they can identify what other brands business travelers interact with on a regular basis. With that information, airlines can tailor their experience or promote offers based on that audience segment.
Personalize to Gain Loyalty
Understanding what fliers do beyond traveling is crucial in creating a well-rounded personalized experience. As PWC says, with both business and leisure travelers accustomed to seamless and personalized purchase experiences from the digital retail giants, travelers expect the same when they shop for and purchase travel. Airline travelers seek seamless and personalized experiences from the point of buying their ticket online to when they leave the airport at their destination.
Finding brands to partner with that align with fliers is one example of how location data is being leveraged. With these insights, airlines can discover what other brands loyal fliers interact with and partner with them to create a better and more relevant customer experience. For instance, perhaps a loyal business traveler dines at a Legal Sea Foods location whenever they fly at a specific airport. An airline could send this customer a discount for their meal upon booking their flight online. Honing in on these brand affinities allows airlines to personalize their experience from online to offline.
Fundamentally, these insights enable airlines to measure loyalty in new ways. By identifying and uncovering these trends, airlines can then try to win over these non-loyal customers by building more targeted marketing campaigns. These types of flier acquisition programs tend to offer high ROI, making it easy for executives to get behind and support. Already, "69% of travelers are more loyal to a travel company that personalizes their online and offline customer experiences" according to McKinsey.
The Bottom Line
Location intelligence is key to providing seamless end-to-end travel experiences and improving airline marketing efforts. Airlines must adapt and invest in data analytics and location technology in order to create experiences that match customers needs in the challenging future ahead. A comprehensive strategy that incorporates location-based insights will win fliers over and ultimately increase market share.
Interested in learning more about location intelligence for airlines? Visit the website page or request a demo today to see what location intelligence can do for your airline.