5 steps for airlines to survive the travel embargo

The number of daily flights has fallen by over 100,000 since the WHO named COVID-19 a pandemic. The International Air Transport Association (IATA) has estimated that the airline industry could lose up to 252 billion US dollars globally, a 44% drop in revenues.

I’m sure you don’t need to be told how big the impact of COVID-19 will be for airlines. The CEO of British Airways, Álex Cruz, told his staff that the crisis is worse than the aftermath of the SARS outbreak or even the 9/11 attacks. But, it’s hugely important to remember that airlines have overcome crises before. Survival is the first goal, but you should keep one eye on the eventual recovery. But how do you survive during this uncertain time?

Our company is deeply integrated with airlines and travel brands, helping build promotional campaigns and strategies — providing us with an informed outsider’s perspective on how to retain business and find new customers.  these are the first steps to surviving the travel embargo and living to fight another day. 

 

Step 1: Don’t panic, take a step back and evaluate

A very simple rule for crisis management is to remain calm. This is more of a mindset suggestion than anything else. While we’re in a global crisis — and it’s important to take it seriously — we will emerge from the other side. Global passenger numbers returned to normal and the economic growth of airlines resumed after only a few months of disarray following the 9/11 crisis.

What we face today may take longer, but we will eventually return to normal. One one level, you need to keep your plans short-term — taking the dynamic situation as it occurs. But you should also be thinking about the long term.  

First, you need to evaluate your business. The situation is dynamically changing -- you need to minimise your exposure to risk in order to be prepared for change. Your first priority should be creating a united front. You don’t want different departments focused on different goals. Take a step back and think about your objectives and how you can align them across the business. 

 

Reduce your expenses

Your second priority should be to reduce expenses. Focusing on margin is a great way to do both at the same time -- providing a common metric to evaluate success, and keeping relative costs to a minimum. One thing you may want to do is look into government aid. Many countries are providing relief for businesses in the form of furlough packages, sick pay relief and more. 

In the UK, businesses can apply for different kinds of financial support. For example, furlough schemes for help with paying employee wages, schemes that provide sick pay, business support grants, schemes helping small and medium-sized businesses and large businesses, or schemes that help with paying tax. 

Similarly, the USA is offering various types of financial support for businesses, such as furlough schemes and loans. There are also regional differences with the government aid on offer. For example, in New York, small businesses who see sales decrease by 25% or more are eligible for loans or even grants to cover wages if the business has fewer than 5 employees. It’s a good idea to look into what exact support your local government is offering. If you’re not based in the UK or USA, it’s worth checking out your region’s individual support schemes. 

 

Step 2: Retain your customers’ loyalty

During this crisis, you need to watch what your customers are doing, what they are asking for and how they react. Being able to provide them with what they need is crucial to ensure good customer retention and loyalty. But more than that, evaluate what your competition is doing too. Make sure that you’re not missing a trick. 

First, your existing customers’ flights have been cancelled so the best course of action is to offer full credit refunds in the form of vouchers in order to retain goodwill. This will help you maximise your revenue and ensure you are the first airline they think of when thinking of booking their next flight. Many will be waiting for society to return to normal so they can go on holiday again — especially after living in lockdown!

With an enormous number of flights cancelled, there will be a huge influx of customer care calls which are impossible to accommodate quickly and efficiently. So, it’s key to give all customers credit without them having to speak to you. This can easily be done with certain software like a promotion engine that provides unique and single-use codes, which your customers can effortlessly redeem. Your marketing department may already have these kinds of tools, but if not, it is straightforward to acquire, integrate it into your CRM so you can improve trackability and make organisation simple. 

Some of your customers, however, might contact you directly for a full refund and you need to be willing to offer that. Keeping your customers happy is essential to retaining their loyalty and sometimes giving them that full refund is the way to do that. You will also avoid online complaints and negative reviews, which could damage your reputation.

 

Step 3: Give your customers peace of mind

Your customers will be watching how you react to this situation, so it’s important that you’re doing everything you can reassure them that you’re taking it seriously. When airlines are running as normal again, your customers will want to know that during the crisis you were taking actions such as looking after your staff. Here are some short term steps you can take to provide your customers with peace of mind.

You also don’t want to damage your reputation by appearing flippant during the current crisis. Airlines must do their part to adhere to the new health and sanitation measures when they start running again, and this will also provide your customers with reassurance that your airline is safe to fly with. Make sure you advertise how you’re sanitising aeroplanes etc. and ensuring the health of your staff.

Furthermore, do everything you can to look after your staff. Apply for government schemes to ensure they get the pay they need and if they’re sick, send them home and continue to pay them. Consumers often value businesses respecting and looking after their staff, and it will provide them with security that you’re doing everything you can to recover from this situation, meaning you won’t lose their loyalty. 

 

Step 4: Plan for the long term trends

Once this pandemic is over, there will be pent-up demand and thinned competition — and you need to make sure that you’re ready for it. It’s time to use this pause on flights to assess how you operate and how you could come out of this even stronger than before.

One way to rethink how airlines can give even more to customers is looking at where the trends in travel are. Despite the pandemic, these long term trends will come to fruition when life returns to normal. Here are some of the trends you should keep track of. 

 

What you can offer customers after COVID-19

Global development and the growth of the service economies is fuelling a demand for access to new tourist destinations. Rethinking your options to offer new destinations could become a great way to kick-start your growth post-virus. If this is a move you decide on, make sure that you partner it with new marketing using social media so that you hit the ground running. 

There are specific things that customers will want from a holiday when the pandemic is over. Perhaps being self-isolated inside means that customers will crave adventure, activity and holidays with friends. Understanding what your customers may want will help you offer them specifically-curated holiday packages that cater to their desires. 

 

Partnering

As mentioned, people will be looking to visit those top tourist destinations that they often see on social media and the like. The rise of influencers posting on platforms like Instagram has contributed to the increased popularity in new destinations too. Consider those destinations and how you plan to market them to your customers once the global lockdown has lifted. 

This can also be done by partnering with these influencers. Using a promo engine, you can offer unique, single-use discounts to various influencers whose audiences are your target market. They can book flights with you using those codes, meaning you’ve found a brand new customer base that will help you prosper ahead of your competitors in the long term. 

It’s not just social influencers you should be thinking about partnering with. Airlines are just one aspect of a customer’s travel plans so you should look to do what you can to entice them to book with you. You can’t do everything on your own and there are huge benefits to partnering with larger companies to offer better deals to your customers. For instance, you could partner with hotels so that your customers can book package deals with you, making it even easier to book their trip. 

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The price of flights

The emerging middle class across the developing world will be eager to travel once COVID-19 has passed. In light of that, it’s important to determine the right price for flights. During the crisis, many customers will have lost income, so flights need to be affordable. However, don’t make them so cheap that it hurts your profits or devalues your higher-end offerings such as first-class tickets.

 

Revitalising your marketing

Take a very detailed look at your current marketing strategy and innovate it so that it’s personal to your customers. 56% of customers stay loyal to brands that “get them”, so be sure to create a marketing strategy that personally appeals to your consumers. 

One thing that customers want now are promo codes, which calls for a well-crafted promotion code strategy within your marketing plan. 93% of shoppers used a promo code in 2019, and 75% of consumers now expect promotional offerings. If you’re not engaging with that extremely high percentage of people, you’re creating one more barrier between you and a sale. Using promotion software with automation capabilities and analytics reporting functions can be a game-changing tool for your marketing strategy. 

 

Step 5: Remain positive

It’s so important to focus on the fact that the travel industry, and specifically airline companies, have suffered through crises before and have come out the other end. The outbreak of the SARS pandemic in 2003 hit global airline traffic hard. But it grew to record-breaking heights in the years following it. It’s the same story with the global financial crisis of 2007-2009. Nothing will permanently deter travelling.

Even now, with COVID-19 lessening in China, passengers are already getting back in the air. These Chinese passengers are getting on flights especially because they are tempted by large discounts. Airline companies that used the preparation time of the travel ban to think ahead are delivering these offers to them. 

People, families and businesses all need global travel. The travel embargo will come to an end and airlines will rise again. It’s easy to over analyse things and try to predict the future. But for now, it’s best to take everything one day at a time. Now is the time to stay calm, focus on the positives and ensure that your airline is ready when travel resumes. 

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Topics: travel industry promotion strategies

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