by Editorial Team
October 05, 2018

Airline managers know: When it comes to air travel, their passengers not only want to be able to easily find and pay for flights, they also want to be well informed at all times afterwards – for example, about delays, lost luggage or additional services that they can book in advance for their flight. In short, they want a customer experience that is entirely positive.

In this blog post you learn more about how airlines can respond to these increased customer expectations and arm themselves against ever tougher competition thanks to smart, digital technology – and why payment plays a central role in all this.

In general, people love to travel by plane. But sometimes, everything just goes wrong.

Just imagine John, a frequent flyer and your best customer, has been forced to stand in line for ages just to check-in, or endure flight delays, or suffer through the confusion as he couldn’t work out just what was going on. When he finally boards, he may have been hoping to buy refreshments, only to be told that his mobile wallet isn’t accepted.

If the nightmare continued, and his luggage was lost on the other side, he might have to wade through reams of paperwork just to get his insurance refund (which may only have reached him many weeks later anyway).

How happy have you made your customer John on that day? And how likely is it that he will fly with you again soon?

All airlines work hard and do their best to satisfy their customers. However, with so many role players, and so many moving parts involved in the end-to-end travel experience, it’s often difficult for airlines to connect all the dots.

This is why some of these negative experiences are not all that uncommon in the travel escapades of loved ones returning to their families, of bloggers recounting their experience online, or business travelers at evening meals with their colleagues from across the globe.

Digitalization is giving power to the people

Today, passengers like John have more power than ever before. Customer views about certain airlines or other travel providers flow in through our social media streams. Who can forget musician Dave Caroll’s song ‘United breaks guitars’, created in response to his valuable guitars being broken on a flight, and which became a fabled case study in the power of social media, racking up almost 20 million views on YouTube?


 Source: YouTube / Dave Caroll

And then, there are automated digital assistant services that promise to strike right to the heart of airlines’ pricing strategies (which are dependent on supply and demand dynamics). For instance, the online service ‘DoNotPay’ explains that: “Flight and hotel prices change all the time. DoNotPay finds travel confirmations from past bookings in your inbox. When the price drops, our robot lawyer will find a legal loophole to negotiate a cheaper price or rebook you.”

Masters of a new payments ecosystem

Against this backdrop of rising consumer demands and increasing market competition, airlines must outmaneuver their peers – with digital-first services that delight and excite.

Whether your airline is a massive global player or a small domestic carrier, a traditional airline or a snappy disruptive start-up, it’s no longer enough to simply get the traveler from A to B. Customers are looking for simpler, more intuitive experiences, where they can access a wide range of travel services without any hassle – in other words, just like in all other industries, consumers want to be offered a good customer experience.

Travelers are already using their smartphones for everything from finding holiday inspiration, to price comparisons, booking flights and additional features, updating their bookings, checking in, downloading and printing boarding passes, buying in-flight products and services, ordering from the duty-free, or scheduling a taxi on arrival.

To provide these services and more, the big opportunity for airlines today is to ensure frictionless, fully-embedded payment services that simplify the lives of travelers at every stage of the travel experience.

Mastering payments enables airlines to play broader and deeper roles in the total travel ecosystem: everything from airport lounge reservations, to in-flight purchases and entertainment, travel advice and consultancy, to brokering great deals on those often-needed services like car rentals, hotels, tourism operators and more.

In fact, a compelling vision for payments becomes a key aspect of an airline’s broader digitization strategy, ultimately transforming the airline from being flight-centric and transactional in nature, towards becoming a truly traveler-centric service provider. In other words, putting the passenger first, not least in the event of irregular operation, as the major IT provider for travel and tourism Amadeus put it in their infographic.

Passengers first: re-thinking irregular operations
Source: Amadeus

4 ways to a better understanding of your customers’ needs

As airlines look to improve experiences and gain outsized growth of market share, just how can they position digital payments at the forefront of their thinking?

Here are the four most important measures for air carriers to offer their passengers a great customer experience:

1. Choice over payments channel

The very nature of travel is that people are often ‘on the move’. As they navigate their way around the world, towards their destinations, travel companies need to find ways of enabling rapid mobile purchases. Customers might not always have a laptop or computer nearby to make traditional web-based purchases.

The millennial generation has a wide array of payments tools at their fingertips – from mobile wallets like Visa Checkout, boon, PayPal, MobilePay, Apple Pay, or Google Pay – to classical channels like online credit card purchases, electronic funds transfers, and of course redemptions from one’s frequent-flyer miles.

But airlines also need to consider nascent platforms and form factors like contactless, wearables and voice-controlled devices – building a visionary dimension into their payments strategy, and always giving travelers unlimited choice in how they’d like to pay for services.

From an airline’s point of view, the ideal travel payment solution has to offer these three main components:

 2. Great mobile/digital experiences

A research by Google and Ipsos MediaCT indicates that 46% of users who make their flight decision on a mobile device will then change to another, non-mobile device to make the actual booking. Airlines could capture far greater value from these users by providing great mobile experiences.

But it’s not just a matter of bluntly throwing every possible offering or add-on in front of your customer. Airlines need to be subtle and strategic with how they position all their features, demonstrating a keen ear as they listen to their customers’ needs and learn from their previous behaviors.

Our recent whitepaper ‘Airline Payment Solutions: How Airlines meet Increasing Customer Expectations with Digitalization’ (download it here for free) explores how to create customer experiences that meet customer demands.

Here is a quote from it:

“In a sector such as aviation, where it’s hard to establish a long-term and emotional customer relationship and not be seen as interchangeable, it’s important to make a positive impression on customers. Does a customer have a favorite seat or food? This is an ideal opportunity to make him or her an individual special offer shortly before take-off, for example, for a snack or an upgrade, which can then be paid for by credit card, loyalty points, or other methods.”

3. Personalized services

While many airlines have offered loyalty programs for some time, there is an opportunity to deepen the level of engagement and wow customers with services that truly show them that their airline cares about them as an individual.

By mashing up a customer’s core travel information, with transactional data gleaned from their payments habits and other sources of unstructured data, airlines can build richer pictures of their customers, and provide services which are tailored to their unique needs.

For airlines, the choice is clear: either transform your operations digitally and redefine your customer experiences with smart, digital solutions, or face a very uncertain runway into the future.

4. Absolute trust and security

With data at the heart of their digital strategies, airlines are certainly getting smarter with how they use customer data – e.g., think of pre-populated credit card data in online forms to simplify the booking experience… or personalized services based on traveler preferences.

But doing this raises the stakes. Airlines must demonstrate that safeguarding their customers’ financial and personal data is paramount. In fact, one slip up can cause untold brand and reputational damage. While they’ll want to offer a range of convenient payment options, it’s essential to ensure that each of these is tightly secured with a very clear security architecture.

Conclusion: Go digital for lift off!

Ultimately, for airlines, the choice is clear: either transform their operations digitally and redefine their customer experiences, or face a very uncertain runway into the future.

We need only look at a recent Bitkom study about digitization in the aviation industry – which said that 95% of aviation companies see digitization as an opportunity. At the same time, 68% say that holding onto traditional business models hinders innovation in the industry.

Within this broad spectrum of digitization, payments is the key that unlocks incredible new customer experiences, as well as new revenue streams for airlines. And this can make John – and all the others – happy customers again.

Get ready for lift off!