Report calls for more passenger-centric approach by airlines

A major independent global study released today calls on airlines to take a fresh look at handling flight delays and cancellations in order to drive loyalty and minimize impact on customers in the short- and long-term.

Titled ‘Passengers First: Re-thinking Irregular Operations’, the study is authored by Norm Rose of travel industry research authority PhoCusWright and commissioned by Amadeus, a leading technology partner for the global travel industry.

The report aims at providing airlines with practical strategies to improve responses to irregular operations. It also recomends airlines to focus on the impact of disruptions on each passenger’s travel experience as part of operational decision-making during times of disruption.

The report argues that a customer-centric approach to handling irregular operations may help bridge the gap between how airlines and passengers perceive delays. For instance, providing greater alternative travel choices to travellers that factor their individual preferences could positively affect future booking behaviour. At the same time, the report recommends a change in processes used to manage delays and cancellations such as re-scheduling, customer communications and re-accommodation that often tend to be based on the airline’s convenience rather than the customer’s.

Interviews with leading academics, trade organizations and global airlines as well as feedback obtained from 2,800 travellers from Australia, Brazil, China, the UK, and the US have been collated for the project. Responses indicate that cancelled flights meant that nearly one in five (18%) passengers surveyed could not fulfil the purpose of a trip booked in the past year (rising to a third in China).

Global airline passengers’ most common frustrations included:
1. Insufficient communication about what was happening
2. Not offered any compensation
3. Conflicting communication about what was happening
4. Not able to fully achieve the original purpose of my trip due to the flight issue
5. 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 serious flight interruptions occur, airlines with such an approach in place need to merely extend their processes to a larger number of travellers rather than attempt to implement a new or reactive response.

• Offer ‘intelligent re-accommodation’: Automated re-accommodation technology may enhance operational efficiency, but does not necessarily resolve 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 consider investing in systems that provide insights into individual passenger 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 services will enable airlines to provide authoritative, personalised and proactive communication and reduce traveller-dependence on third-party sources.

• Moderate delays hurt the industry more than big ticket disruptions: The biggest challenge facing airlines today is not from major weather disruption or force majeure events such as the volcanic ash cloud that disrupted travel across Europe in 2011. It is the far more mundane moderate delay of one to four hours that matters most to customers. In all markets at least 50% of travellers have experienced moderate delays on one or more flights in the past 12 months, with this figure peaking in China (74%) and Brazil (67%). Instances of significant delays 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 flight delays to their friends on social networks such as Twitter and Facebook. More travellers shared experiences among their immediate family or friends groups using other means.

The study urges airlines to shift their perceptions on social media and consider it as more than just a mere promotional tool to market their services. Structured social mapping using analytical tools could give airlines a greater insight into customer sentiment and public perception on how disruptions were handled.

Norm Rose, Senior Technology and Corporate Market Analyst, PhoCusWright, said: “Many airlines around the world have challenges in measuring the true cost of irregular operations on customer sentiment. While carriers are aware of the direct costs associated with delays and cancellations – US 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, it 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 when disruptions happen the first question an airline must 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. There is a strong argument that passenger insight and choice should be integrated into the irregular operations process. We will continue to work in collaboration with our global airline partners to help them refine, refocus and maximise their irregular operations procedures.”

To download the report please visit: www.amadeus.com/ passengerfirst