Aviation is a famously-competitive industry, with slim margins and a wide range of carriers for passengers to choose between. So how can operators use airline apps to create great experiences and upsell more services?
Airlines depend on services to turn a profit
Airlines typically only break-even on ticket sales and rely on selling additional services in order to generate profits. Baggage fees and charges for booking changes and cancellations made up more than half of the net profits reported by airlines in 2016. Additional profits are made from fees for seat changes, extra legroom, priority boarding, onboard purchases, and pets.
Profit per passenger at the seven largest US airlines averaged just $19.65 between 2014 and 2018 – which is still double the average in most countries.
With these facts in mind, it’s surprising that many airlines are leaving money on the table by failing to design apps that offer great customer service; or even allow passengers to perform revenue-generating functions.
Airline apps are lagging behind on customer service
Offering great customer service is a powerful way to stand out and win loyalty in a crowded marketplace. Yet many airline companies fail to offer in-app customer service experiences that are aligned with market demands.
- 41% – live chat
- 32% – telephone
- 23% – email
- 3 % – social media
Live chat is the most popular option for customer service, yet only 15% of low-cost carriers have built it into their Android mobile apps – and this figure drops to just 4% for traditional carriers, according to research by Videc.
So more than 95% of traditional carriers still fail to offer passengers the most popular customer support channel on the market as part of their in-app experience on Android devices.
In contrast, 55% of low-cost carriers and 39% of traditional carriers offer social network plugins for customer support – despite the fact that just 3% of customers prefer social media as a customer support channel.
Airline apps often fail to maximize customer revenue
Given that airlines have to sell extra services in order to generate profits, it’s surprising that a large number of airline apps don’t allow customers to book these services. Sub-standard flight booking experiences are also likely to be turning many potential customers away.
How many airline apps offer travel management tools?
- 91% allow mobile check-in
- 83% reflect flight statuses
- 70% support mobile notifications.
- 55% issue mobile boarding passes.
- 27% support flight changes
- 17% of show flight cancelations
US airlines generated $3 billion in reservation-change and cancellation penalties in 2017, according to Transportation Department data. So it’s astonishing that nearly three-quarters of airline apps don’t support in-app flight changes – as this could be a major source of revenue.
Other customer service features like the ability to check flight cancellations and issue boarding passes are also surprisingly low, given how useful they are for customers who are trying to navigate the often stressful experience that is international travel.
The flight booking experience is also a crucial consideration for conversion optimization. Yet 98% of APAC airline apps have an in-app search feature that’s routed to an external website browser, which will behave more like a desktop than a native mobile experience – and is likely to lead to fewer ticket sales.
What do great airline app experiences look like?
Some airlines have embraced the value of in-app customer experiences and designed innovative features to win passenger loyalty.
- Delta customers can track lost luggage inside the airport using the Delta app.
- KLM offers a smart queuing system that allows passengers to digitally queue instead of stand around waiting. They also offer a ChatBot service with voice assistance.
- Iberia offers a personalized travel guide for each passenger through their app – based on their destination, dates, and language.
Any airline looking to increase its in-app revenue should consider adding features that allow customers to buy their entire range of services, offering customer support options that match market trends – like live chat – and overhauling their entire app design for great user experience and maximum conversions.