Not long after the Wright Brothers invented the first successful airplane, airports and airlines became commonplace. It was the simple, logical conclusion: a place and a brand to get people from point A to point B.
Flash forward to today. Increasing global competition and a dynamic geopolitical and economic landscape have put more pressure on airlines and airports. A successful flight is no longer the prerequisite for a positive flight experience. To win, airlines and airports must do more to unlock synergies. This is the way forward. Here’s how airports and airlines can successfully take better advantage of their natural partnership.
Integrate Sales Channels
Heathrow Airport is making shopping more convenient for its customers through Heathrow Boutique, a service that allows passengers to reserve items before the flight and then collect and pay at the airport. This has created a home-to-gate shopping experience for passengers. It shouldn’t come as a surprise that Heathrow Airport is enjoying strong sales.
By partnering with airlines to create an integrated end-to-end sales channel that connects at-home, in-airport, and in-flight shopping, airports can benefit even more. According to research from PricewaterhouseCoopers, sales revenue could rise between 10-20%, even if profits have to be shared. Airlines stand to benefit even more, with the potential for revenue increases over 50%.
Of course, integrating sales channels won’t work without the right business models. Airlines and airports must focus on using the right technologies and profit-sharing mechanism. This way, costs can be kept lower, data can be utilized effectively, and customers can enjoy all the benefits of an integrated shopping platform.
Link Loyalty Programs
Airlines have been taking advantage of loyalty programs. It all started when American Airlines unveiled AAdvantage in 1981. For the most part, the average traveler knows about these programs. Conversely, travelers aren’t always aware of airport loyalty programs. That’s because most major international airports don’t have one. The success of those that do have a loyalty program should be enough to get airports into the game.
For example, in early 2013, Copenhagen Airport launched CPH Advantage, its own version of a loyalty program. From the start, the idea has been to reward those who visit and spend the most with perks, like shop discounts, free internet, and more. In just 13 months, CPH Advantage reached 250,000 members.
If both airlines and airports benefit from having loyalty programs, it only makes sense to partner in this area. The present situation creates a gap in the travel experience. Airports can’t serve customers adequately when they’re on the plane; airlines can’t serve passengers adequately when they’re at the airport.
Integrating loyalty programs so that customers can enjoy rewards and perks anywhere is the solution. For airlines and airports, there are four main benefits:
They can expand offerings: For instance, airline miles can be used for access to parking spots or discounts at restaurants. Airport points can be used for in-flight upgrades.
They can enjoy a unified platform: Partnering not only enables airlines and airports to offer a better variety of items and benefits, it also helps them make the travel experience more convenient. In addition, airlines and airports can also gain better visibility into where they need to improve.
They can lower costs: A unified technology platform can reduce inefficiencies and, as the partnership grows, airlines and airports can lower supplier costs through increased negotiating power. For the traveler, that means lower costs for the product and services airlines and airports offer.
They can tailor offerings: Airlines are already using data to tailor offerings to passengers, but they can do more if they team up with airports. Airports and airlines can gain better insights on their customers, giving them the tools to prepare the right offering to travelers.
Make the Journey Seamless
The goal for airlines and airports should be to deliver travelers an easy, enjoyable journey from doorstep to doorstep. The problem is that there is a disconnect between different legs of the journey.
There are airports and airlines taking steps to bridge this gap. For example, Transavia partnered with Uber in early 2017 in an effort to make fantasy trips a reality for customers. Through the Uber app, users can see what flights are taking off at nearby airports and then book immediately. The price includes the Uber ride to the airport. By doing this, Transavia has made the whole process much faster and simpler, as customers are essentially taken to their dream destination just with a few clicks.
Other airlines are improving processes at the airport to ensure customers encounter no obstacles on their journey. A good example is JetBlue. Back in 2014, JetBlue automated the check-in process, taking away the need to wait in line for a ticket or baggage drop-off.
These advancements are a good sign. But more can be done to make the entire journey seamless. For airlines and airports, this relies not only on partnering with hotels, ride-sharing services, and car rental companies, but also with each other. This way, airports and airlines can optimize operations, improve decision making, and enhance cross-selling (which a joint loyalty program can do).
For instance, through systems integration and digital automation, airports and airlines can share information easily. This allows them to eliminate obstacles at the airport, from checking in to security clearance to boarding. With such information, airports and airlines can target offers to travelers as well, ensuring they get what they need and want quickly and easily.
It’s worth mentioning that the benefits extend beyond passenger travel. Cargo carriers and airports should partner to integrate the entire air shipment ecosystem. Using systems like an intelligent air cargo platform can ensure products and goods are shipped efficiently and safely, as well as allow carriers and airports to effectively track goods from warehouse to customer.
Share the Space More Effectively
Airports and airlines have a natural relationship because one can’t operate without the other. Airlines need the landing and takeoff space. Airports need to offer customers access to the flying machines.
The time has come to use the shared facilities more effectively. Some airlines and airports are already partnering effectively in this area. For instance, American Airlines Cargo opened a mammoth temperature controlled facility at London’s Heathrow Airport. The new facility can handle 16 times the number of skids the previous room could. It also ensures temperature-sensitive products are shipped safely and quickly. Clearly, this partnership is a win-win for the airline and airport, as it increases operating capacity and potential revenue for both.
Given the benefits that a deeper partnership would bring, airlines and airports must unlock synergies. To do this effectively, they must integrate sales channels, connect loyalty programs, work together to make the journey easier, and share physical resources in a more beneficial manner. This will ensure opportunities aren’t missed and the full potential of this natural partnership is realized.