Mike is a US Travel and Leisure Reports Analyst at Mintel. Mike writes reports about consumer travel preferences as well as leisure market research.
The newly-agreed upon COVID-19 relief bill is purported to provide the airline industry with a total of $50 billion, split between grants and loans. During the development of the bill, this specific line item has become a flashpoint among politicians and citizens alike. According to Bloomberg News, nearly all of the cash that airlines had on-hand went to stock buybacks, leaving little as a reserve fund in case of a crisis such as this. Outrage is already building at the idea of handing money to companies while struggling workers get little by comparison.
As relief comes to the airline industry, airline brands will need to put together a plan to draw customers during the COVID-19 era and beyond.
Keep consumers informed
Once the post-pandemic recovery begins, consumers are going to be gun-shy about their spending. For years, airlines have been trying to outdo each other in offering the lowest fares, and there’s no reason that this won’t continue post-pandemic – in fact, consumers will expect this, given that 82% of flyers state that price is the most important factor when choosing an airline.
Beyond price, what can airlines do to attract flyers in the future? More importantly, what can they do now to lay the groundwork? As with any crisis, proper management is paramount to success, and airline passengers pay attention to how carriers behave. When it comes to how airlines present themselves in public, more than half of flyers say that what they hear in the news influences their opinion of an airline brand, according to Mintel research on airlines. Nearly four in five passengers say interactions with airline staff influence brand perception and two-thirds will avoid an airline after a negative interaction with its staff.
As such, it is imperative that airlines communicate their plan for keeping passengers safe from the virus, as well as what changes are being made to rebooking and cancellation policies in the meantime. For example, Southwest Airlines is sending emails addressing these points clearly.
When it comes to how airlines present themselves in public, more than half of flyers say that what they hear in the news influences their opinion of an airline brand.
Make meaningful changes
Beyond emails, consumers want to see action. As awareness of the financial support airlines are requesting increases (and conjures up similarities of bank bailouts during the Great Recession), flyers want to see action from airlines that shows their commitment to their employees, such as expanding sick leave policies or continuing normal pay rates regardless of cutbacks in hours. According to Mintel research on attitudes toward brand ethics, three in five consumers say corporations should be paying their employees a minimum wage.
Airlines should be aware that their behavior surrounding any government monetary relief can have severe ramifications in the court of the public opinion. More than three in five consumers say that corporations are responsible for engaging in honest business practices. One airline’s poorly received actions could give its competitors an edge during the recovery. Of course, the competitive edge may not go to a competitor airline at all, but to road travel. Pre-pandemic, flyers were split on whether they agreed or disagreed that they prefer driving to flying; with gas prices likely to be low coming out of the recession, the driving option will be even more appealing.
Fare cuts won’t cut it
With fares low across the board in an effort to attract travelers, airlines will have to look to other mechanisms to compete. Beyond price, more than half of flyers say baggage fees factor into airline choice, and more than two in five cite the ability to choose their seat as a deciding factor. Reducing or eliminating these fees is a bold tactic that airlines can use to stand out. One way that likely won’t move the needle: in-flight vouchers. In-flight entertainment and food and beverage options are a deciding factor for only a small amount of passengers, signaling freebies won’t bring in a significant number of customers.
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