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New report on the airline industry calls for customer-centric

A major independent global study released today appeals to the airline industry to take a fresh look at the age-old frustration of delayed or cancelled flights, in order to drive loyalty and reduce the impact of irregular operations on its customers, both now and in the future.

The study, written by Norm Rose of PhoCusWright, argues that airlines should consider a more customer-focussed approach managing delays, cancellations and missed connections
The report makes a number of recommendations including offering a standard service approach to disruption, delivering ‘intelligent re-accommodation’, and providing more transparent communication
 
Las Vegas, NV, United States & Madrid, Spain, 5th September 2013:A major independent global study released today appeals to the airline industry to take a fresh look at the age-old frustration of delayed or cancelled flights, in order to drive loyalty and reduce the impact of irregular operations on its customers, both now and in the future.
 
‘Passengers first: Re-thinking irregular operations’, written by Norm Rose of travel industry research authority PhoCusWright, and commissioned by Amadeus, a leading technology partner for the global travel industry, aims to provide airlines with practical strategies to improve responses to irregular operations, urging airlines to place a greater focus on the impact of disruptions on each passenger’s trip experience as part of operational decision-making during times of disruption.
 
The reportargues that a customer-centric approach to handling irregular operations may overcome some of the disparities between how airlines and passengers can sometimes perceive delays. For instance, providing greater alternative travel choices for travellers that take into account their individual reasons for travelling, which in turn could positively affect future booking behaviour. At the same time, the processes used to manage delays and cancellations today, including scheduling, customer communications and re-accommodation, often tend to be flight-centric, rather than customer-centric; something which the report argues must change.
 
The study, which is based on interviews with leading academics, industry trade organizations and global airlines, also includes a survey of 2,800 travellers from Australia, Brazil, China, the UK, and the US, showing that delayed or cancelled flights meant that nearly one in five (18%) of all passengers surveyed could not fulfil the purpose of a trip booked in the past year (rising to a third in China). Furthermore, among passengers’ most common frustrations was insufficient communication, something which may impact a traveller’s loyalty to a particular airline in the future.
 
 
Global airline passengers’ most common frustrations
1. There was insufficient communication about what was happening
2. I was not offered any compensation
3. There was conflicting communication about what was happening
4. I was not able to fully achieve the original purpose of my trip due to the flight issue
5. I had to pay additional costs for alternative arrangements
 
 
 
Key findings from the report:
 
·         Deliver a standard service approach to disruptions: Airlines should consider incorporating a standard service approach to deal with passenger itinerary changes. When severe events occur, airlines with such an approach in place merely extend their processes to a larger number of travellers rather than attempt to implement a new, reactive process.
 
·         Offer ‘intelligent re-accommodation’: Automated re-accommodation technology may provide efficiencies for the operational staff, but it does not always solve the underlying passenger itinerary disruptions. Airlines may want to implement an intelligent one-click solution that empowers passengers to choose alternatives most relevant to their needs. Airlines should also consider investing in systems to gain a greater understanding of each passenger’s preferences and reasons for travelling, including passengers who book through indirect channels. 
 
·         Provide transparent communication: In every market surveyed, except China, insufficient communication was cited as passengers’ top frustration with irregular operations management. Introducing an integrated, cross-departmental approach to customer service will enable airlines to provide authoritative, personalised, proactive communication – and lessen the need for travellers to rely on third-party sources.
 
·         Moderate delays hurt the industry more than big ticket disruption: One of the greatest challenges facing airlines is not major weather or force majure events, such as the volcanic ash cloud that disrupted travel across Europe in 2011, but rather the far more regular moderate delays of 1-4 hours that matter most to customers. In all markets at least 50% of travellers have experienced a moderate delay on one or more flights in the past 12 months, with this figure highest in China (74%) and Brazil (67%). Instances of significant delay are far less common.
 
·         Travellers are increasingly venting frustration via social media: Globally, around one third of travellers surveyed said they had posted comments about delays to their friends on social networks such as Twitter and Facebook, with higher numbers sharing experiences amongst their immediate family or friendship groups using other means. The study calls on airlines to shift social media strategies from promotional activities alone, and to embrace analytical tools that help them to understand the impact of social comments made in relation to disruption. By following this analytical approach, airlines can practice social mapping to better understand the impact of disruption on their brand as well as the sentiment of their customers.
 
Norm Rose, Senior Technology and Corporate Market Analyst, PhoCusWright, commented: “Many airlines around the world have challenges in measuring the true cost of irregular operations on customer sentiment. Whilst carriers are aware of the direct costs associated with delays and cancellations – U.S airlines alone lost $7.2 billion as a result of disruption in 2012 – those figures do not tell the whole story. When travellers post negative messages on Twitter or decide never to book with a particular carrier again after being kept waiting for several hours at the airport, this results in an indirect loss of revenue for airlines which is often difficult to measure. A passenger-centric approach requires a re-evaluation of irregular operations management, to enable airlines to better serve customers and protect revenues”.
 
Patricia Simillon, Head of Airlines Operations Strategy, Airline IT, Amadeus IT Group, commented: “This report tells us that at times of disruption, perhaps the first question an airline might ask is not how it can shift travellers from a cancelled flight to another, but rather how the delay impacts that person and their unique reason for travelling. To this end, there is a strong argument that passenger insight and choice should be integrated into the irregular operations process. We will continue to work hand-in-hand with our global airline partners in order to help them to refine, refocus and maximise their irregular operations procedures.”
 
To download the report please visit: www.amadeus.com/passengerfirst
 
– Ends –
Notes to the editors:
 
Amadeus is a leading provider of advanced technology solutions for the global travel industry. Customer groups include travel providers (e.g. airlines, hotels, rail and ferry operators, etc.), travel sellers (travel agencies and websites), and travel buyers (corporations and travel management companies).
 
The Amadeus group employs around 10,000 people worldwide, across central sites in Madrid (corporate headquarters), Nice (development) and Erding (operations), as well as 71 local Amadeus Commercial Organisations globally.
 
The group operates a transaction-based business model. For the year ended December 31, 2012 the company reported revenues of €2,910.3million and EBITDA of €1,107.7 million.
 
Amadeus is listed on the Spanish Stock Exchange under the symbol "AMS.MC" and is a component of the IBEX 35 index.
 
To find out more about Amadeus please visit www.amadeus.com
 
Contact details:
 
Amadeus
Corporate Communication
Telephone: +34 91 582 0160
Fax: +34 91 582 0188
 
 
 
About PhoCusWright Inc.
PhoCusWright is the travel industry research authority on how travelers, suppliers and intermediaries connect. Independent, rigorous and unbiased, PhoCusWright fosters smart strategic planning, tactical decision-making and organizational effectiveness.
 
PhoCusWright delivers qualitative and quantitative research on the evolving dynamics that influence travel, tourism and hospitality distribution. Our marketplace intelligence is the industry standard for segmentation, sizing, forecasting, trends, analysis and consumer travel planning behavior. Every day around the world, senior executives, marketers, strategists and research professionals from all segments of the industry value chain use PhoCusWright research for competitive advantage.
 
To complement its primary research in North and Latin America, Europe and Asia, PhoCusWright produces several high-profile conferences in the United States and Germany, and partners with conferences in China and Singapore. Industry leaders and company analysts bring this intelligence to life by debating issues, sharing ideas and defining the ever-evolving reality of travel commerce.
 
The company is headquartered in the United States with Asia Pacific operations based in India and local analysts on five continents.
 
PhoCusWright is a wholly owned subsidiary of Northstar Travel Media, LLC.