Monday 11 January 2016

How to Boost Airline Revenue, Reduce Costs, and Survive the Age of Disruptions

Becoming and staying profitable in the competitive airline world is going to be more challenging than ever. Keeping the business afloat by relying on traditional metrics and short-term financial fixes at the expense of quality will no longer be a workable option. Nor will the rise in the non-core revenue ever be enough to compensate for losses in quality and reputation. 

The key to success will more than ever depend on airline ability to balance between cost and quality essential to win passenger loyalty and rise in revenue. This assumes learning from disruptions and taking actions to reduce the number and length of delays and flight cancellations - the main reasons for losing passengers regardless of how low you go with prices.
 
Have you ever thought how much even the slight increase in customer loyalty can impact the revenue? The following example can give you some idea:

For the sake of simplicity say that on 10 observed flights carrying 1000 passengers the improvement in passenger experience resulted in 10% more passengers, 10% rise in revenue per passenger, and 10% more return passengers. The result: 33% increase in revenue. 


If you add to this the cost savings made by reduced number of flight delays and cancellation, would it prompt you to try and test this practice on your own? If proved successful, would you be ready for revising your approach to strategy creation?