Why the airline industry is ready for conscious brands
Written by Ludwig Duran, Strategy Director at Wolff Olins.
COVID-19 is threatening the future of the airline industry. But the measures they are taking to win customers back may not be enough, nor are airlines prepared to address the next big threat: growing reluctance to fly, to avoid contributing to climate change. But airlines have the opportunity to address these challenges by embracing the ‘conscious brand’ model, where brands act responsibly and responsively to offer a better experience for their customers, and the world.
Passengers are scared to return to the skies
A key ingredient airlines need to make money is passengers. This feels obvious, but their absence may be one of the biggest threats airlines face in re-building their businesses, as lockdown restrictions ease. Recent IATA data showed that across the industry, passenger RPKs (demand-levels) for international travel continued to decline by nearly 100% YoY. Although domestic air travel had shown some signs of recovery in the last two months, RPKs had declined by 57.5% YoY, dimming the hopes of a significant summer bounce. The passenger demand that might save airlines, isn’t yet coming to their rescue. And their absence is driven by legitimate health and safety fears over flying.
Traditional brand experience drivers won’t win them back
But in a twist of irony, the steps airlines are taking to address those fears, may erode a key lever for attracting passengers: brand experience (assuming price, route and travel time are all equal). IATA health and safety guidelines mean airlines must strip out or dramatically reduce many of the features they use to differentiate and entice customers: food and drink service, in-flight amenities and extra perks like priority boarding. These guidelines also reduce the significant power front line staff have in shaping the brand experience by limiting their interactions with passengers.
These experience drivers have been replaced with a variety of cleaning and hygiene measures, many of which are likely to become similar across airlines, further diluting the differentiation of the experience they offer. As a result airlines may have to lower prices to lure skeptical travellers back, further eating into their margins and complicating their recovery.
Climate concerns may seem forgotten, but they are far from gone.
Airlines will also have to contend with negative category associations. Flight shame may be temporarily forgotten, but it is far from gone. In October 2019, it was predicted by a UBS survey, that air traffic could be halved, based on customer concerns with the environmental impact on air travel. While last October seems like a lifetime ago, the concern for our planet and the focus on limiting carbon emissions is not going to go away, given how important the issue is among the valuable millennial market and the growing importance of sustainable travel with middle class Chinese and Indian tourists, who were predicted to account for nearly half of passenger growth over the next 20 years.
Conscious brands could offer airlines a flight path for survival
All of this begs the question for airline brands: how can they reimagine the experience of flying in a way that feels attractive and right, in the age of intensive health and safety measures and against the backdrop of the unresolved climate crisis?
The start of the answer might be in the idea of the conscious brand. Recently we identified conscious brands as the next era of brand. Conscious brands are defined by being responsible and responsive: responsible in that they go beyond CSR and marketing activities to drive positive impact at scale and responsive in that they go beyond digitising services or building chatbots, to empathetically responding to human needs. While there are some brands exhibiting conscious qualities, to date, there is no brand that is a fully conscious brand. And this presents an opportunity for beleaguered airline brands.
What a conscious airline brand could look like: becoming responsible
A conscious airline brand could act responsibly by owning the role it plays in increasing the planet's CO2 levels - not only to counter ‘flight shame’, but also to act as a good citizen to the world. The first, and most important step, would be to fully integrate sustainability into its purpose as Unilever did through the Unilever Sustainable Living Plan. This would help transform the airline from within, directly orienting investment, operations, and customer experience decisions around sustainability. Such a shift in purpose, could help airlines capture existing demand from competitors. A recent study on purpose done by the Zeno Group indicates this, showing that 82% of customers surveyed would be more likely to buy from a brand whose purpose they support. Given the growing, cross-generational concern about sustainable travel, embracing a sustainability-led purpose could help struggling airlines capture market share, as demand grows and stabilizes.
Examples of how a sustainability-led airline might behave include:
- Working with governments to use government investment to hit the more stringent pre-COVID-19 carbon limits instead of trying to avoid them
- Expanding their businesses with lower-carbon partnerships, such as train operators, and allowing customers to complete journeys with lower carbon travel choices, as done by Austrian Airlines
- Incenvisting passengers to change their travel behaviour to further reduce a journeys’ carbon footprint e.g. partnerships with public transport providers to promote lower carbon travel to and from airports, or adjusting pricing structures and baggage weights to reduce per passenger travel weight and improve fuel efficiency
- Continuing to invest in and fly with biofuel blends such as Cathay Pacific, the world’s first airline to invest in a biofuel company
- Reviewing supply chains to promote greater sustainability at every step and selecting partners who have integrated sustainability into their organisations, to create a cascade effect of promoting sustainability beyond the airline’s own business
With a looming recession, responsibility would also mean actively working to protect staff jobs vs. tactically pursuing restructures, as BA has done, as the way an airline treats its people directly influences the passenger experience and perception of that airline.
What a conscious airline brand could look like: becoming responsive
An airline that wanted to be responsive would focus on anticipating, not just responding to customers’ needs, ensuring these inform every facet of its business. The power of being responsive is not to be underestimated. Research by Think with Google found that 89% of businesses surveyed said that anticipating customer needs was critical to their growth.
This anticipatory approach could help airlines create responsive brand experiences that add new value to the customer’s experience, giving them an added incentive to return to the skies. In a COVID-context, this could mean reframing health and safety measures as holistic, wellbeing measures. Etihad Airlines have recently made a big step in this direction through their Wellness Ambassadors initiative, which feels like a value-added and differentiated experience layer that has elevated their health and safety measures.
But could airlines go further? An opportunity might lie in supporting a customer's mental wellbeing, in addition to their physical wellbeing. Arguably, a big reason customers may hesitate to fly, is their anxiety about what may happen to them if they are suddenly quarantined or are unexpectedly denied entry due to travel restriction changes. Lufthansa Airlines has done work to address this, through their “Return Home” guarantees, which include guaranteed access to repatriation flights, special partnerships with AXA Insurance to cover quarantine costs and options for a video consultation with a doctor if needed. For hesitant customers this shifts the experience from one associated with uncertainty and fear, to assurance and comfort - feelings that can persuade a customer to travel, by addressing what is holding them back. And for struggling airlines, triggering that shift will be critical to their survival.
A responsive approach can also be valuable in helping airlines shape their experience beyond COVID-19, where the nature of travel is likely to be significantly different vs. 18 months ago. Passengers are likely to be more cautious about investing in a journey and may need a flavour of the experience before they fly. Expanding into providing VR experiences at the consideration stage of travel planning, to inspire travellers is one way airlines could respond. Another area airlines could show their responsiveness is in addressing the incredible complexity of the travel experience. This was already an issue before COVID-19 and may become a greater challenge after the pandemic based on how uncertain travelling is likely to continue to be. Centralising all touch-points of the journey into one airline-controlled platform, like what start-up airline Breeze was working on prior to the pandemic, is one way airlines can show their customers that they are responding to their needs.
What airlines can do now
While a full transformation into a conscious brand may seem far-fetched for a struggling airline to undertake today, taking inspiration from conscious brands can provide a clear strategic direction on how to get there. And this direction can help put airlines on a more competitive footing to better capture demand as it returns, and help them make the case to governments and shareholders on why they deserve to exist, as the industry faces the prospect of bankruptcies and consolidations in the months ahead. If a crisis is a ‘terrible thing to waste’ - now seems like the time to take full advantage of it. The future of many airlines we know, may depend on it.