Customer satisfaction has always had as much to do with art as science, but one unshakeable fact in the airline industry would appear to be that passenger expectations for the in-flight experience are becoming ever more demanding. Travellers may not actually choose one airline over another because of the quality of croissants, the movie selection, or even the courtesy of the cabin attendants. Nevertheless, carriers are under increasing pressure to deliver the right level of service. That does not necessarily mean absolute luxury, but rather a product that conveys the carrier's values and brand message.
Low-cost carriers have deliberately stripped down their product to the bare essentials. Others are in search of that innovation which will differentiate their product from the herd. In highly competitive long-haul markets, such as those across the Atlantic or Pacific, the competition is intense. Witness the race to introduce in-flight entertainment (IFE) innovations such as in-flight e-mail and Internet access, or the recent move to seats that convert into flat beds in first and business classes.
The difficulty comes in attempting to measure what impact such individual initiatives may have. "In general, the in-flight service is an intangible," says Kent Craver, manager on-board marketing group at Continental Airlines. "Yes it is important, but you don't tend to choose an airline on one aspect of it. Continental has been successful because it offers the total passenger experience. The in-flight service is part of that overall package, and it is this entire package that influences the customer," he says.
Despite this, airlines spend an inordinate amount of time on research into what passengers think of in-flight offerings, and what they would like to see. British Airways has its Overall Onboard Customer Satisfaction rating. This shows that taste of food is the top scorer with 13%, followed by seat comfort (11%), how the cabin crew made you feel (10%), and IFE for long-haul (9%).
Research heavily influences how airlines develop various areas of their product, depending on the type of service provider the carrier wants to be. At the end of 1999, BA pondered whether its European short-haul services should be a full-service offering, a no frills-type service, or a product somewhere in between. One of the main issues revolved around the decision whether to offer full meals. "In a cabin where you are under yield pressures, it is attractive to reduce the catering," says Tony King, general manager for catering at BA. The airline performed trials with a minimal catering service of just "bar, beverage and a biscuit", but passengers did not like it. "We concluded that full service was an expectation for BA's main customers," says King, and it has responded by launching its "All Day Deli" meal product on short-haul services. This seeks to mirror current trends for upmarket, trendy sandwich bar style food and drink products.
Lufthansa is interviewing 500 of its frequent flyers around the world as part of a major project called Intercontinental Innovation that will re-launch its long-haul product in 2003. The airline knows that it has a very strong core brand, but is concerned that travellers recognise this more readily than its various class brands, says Ingo Wuggetzer, general manager for intercontinental product development. "We want a stronger focus on the philosophy of each class, making it easier for the customer to recognise the product he has bought."
Nothing is off limits in the Intercontinental Innovation exercise. Lufthansa's analysis has already looked at whether it should continue offering a first class cabin, says Wuggetzer, and the result is a definite yes. "If you want to be a major player you have to have a first class. It is there that you can really show your full service and technology capabilities." First class is also a crucial element in Lufthansa's Miles & More frequent flyer programme. "There are a lot of upgrades sitting in our first class cabin, many due to Miles & More. It is an effect that is calculated as part of our frequent flyer concept," he says.
Good hospitality
Global branding consultancy Future-Brand feels airlines can push their interior product further than they do at present. "Airlines should stop viewing themselves as simply transportation providers," believes Gerrie Smith, Future Brand's aviation practice leader. "They have to realise that they are a hospitality provider. They need to create very strong brand experiences, and not just for the premium passenger."
Virgin Atlantic prides itself on taking exactly this approach, and has a long string of awards to prove how successful it has been. "Our concept was to build an airline that had a very strong operational team, but was not operationally driven," explains Virgin managing director Steve Ridgway. "Our aim is to orient the airline so that it is totally driven by customer needs. As we all fly the same aircraft it is even more necessary to be different, and we are always trying to do things on the ground and in the air that haven't been done before."
One decision made early on was to recruit 90% of its cabin crew from people that were new to the job, and carried no baggage about how to do it, so that Virgin could train them in its style. "We are very careful about the raw material we select and are confident in our ability to train them. This is very simple thinking, but it is a key point," says Ridgway.
The rise of premium economy
Virgin also decided early on in its history to go away from the standard three-class cabin. After starting with just two classes - Upper Class, which it describes as offering first class service at a business class fare, and Economy Class - in 1992 it launched Mid Class, now renamed Premium Economy Class. The new class is for passengers paying full fare economy prices, and offers a range of benefits over standard economy including a seat pitch of 38in compared to 32in, more elaborate meal presentation and pre-take-off drinks.
"It is too simplistic to look at the rest of the market (outside business) as one amorphous economy cabin," says Ridgway. It is aimed at cost-conscious business travellers who for budgetary reasons travel economy, and for an increasing number of passengers who cannot justify business class fares for leisure travel, but are willing to pay a bit more for premium service, he explains.
For several years Virgin and Taiwan's EVA Air have been the main advocates of greater product segmentation in the cabin, but the trend of offering a so-called "fourth class" is catching on. BA has launched its premium economy product, World Traveller Plus, on the transatlantic, while British Midland will also offer one on its Airbus A330 services from the UK to the USA that begin in April. SAS tested an enhanced economy class, called Economy Full Flex last year, and liked the results. When it takes delivery of its A340s and A330s in September they will feature the new class, with tickets costing about 65% of the current business class fare.
But the move to extra classes is far from universal, and may not be appropriate in some markets. Continental, for example, is sticking fast to its strategy of being a two-class carrier, while Lufthansa wants to keep a clear product separation between business and economy.
Figures from the World Airline Entertainment Association (WAEA) show how much airlines rate their IFE as a product differentiator. It estimates airline IFE spending has grown from $400 million in 1992 to $2 billion in 1999. The entertainment side of IFE has been pushed a long way, with Digital Versatile Disc technology offering passengers a library of in-flight viewing and in-flight satellite television both well established. The latest stir is around in-flight e-mail and Internet access, says Sophie Vossenaar, manager for in-flight communications for KLM, and WAEA president. Air Canada started the first trials of in-flight e-mail on two Boeing 767s in September last year.
According to Elizabeth Young, general manager aircraft services at SITA, the big unanswered question is the number of core communication services the frequent flyer will insist on having. She believes basic telephony and e-mail access and some Internet access will be "must haves". The next level of services, such as more robust Internet access allowing web surfing, a large degree of individual access to programming, or the ability of a passenger to use his own mobile phone on-board, will become the true product differentiators.
The desire to innovate through products like IFE clearly depends on an airline's philosophy. However, all the carriers appear to agree that the pace of change is quickening. "There is no doubt the airline industry will have to follow the automotive industry with shorter product cycles," says Virgin's Ridgway. "Today the cabin has a 6-7 year design life with three-year mid-life upgrades. The days of a 15-year life for a seat are long gone."
For Lufthansa, its current intercontinental project will be the last "big bang" switch to a completely new product, says Wuggetzer. The job is simply becoming too large to be done in one go. "We will run into problems if we keep on shortening the cycles," he says.
Therefore, Lufthansa is moving towards a continuous product improvement process. "We will go to a modular concept so we can change things every other year. Improvements will be introduced so much faster to the customer and you won't have to totally change your whole fleet," he says. To achieve its modular vision, Lufthansa is encouraging manufacturers, such as IFE and seat suppliers, to develop standardised platforms that are easily adaptable.
Virgin's Ridgway would like to take this mantra to the aircraft level too. "Aircraft interiors need to become far more flexible; for example you could see an aircraft being configured differently for day and night flights. I have got people looking into this today," he says. The ability to easily change cabin layout by adding or removing seats, or changing seat pitch, would open up much more dynamic marketing approaches to the airline, he believes.
At a more micro level, Smith of FutureBrand believes airlines can update their in-flight service more regularly than they think at minimum cost. For instance, many soft items like cushions, head covers or blankets, have fast turnover, while carpets are replaced every three months. As these are being changed anyway, the chance can be taken to renew the design, or add new touches, she says.
Memorable flights
It is often very simple things that can make a difference. One airline's china, which includes a specially commissioned design, has been so well received that many travellers feel compelled to take them as they leave. Little touches like this and the ice cream some carriers offer during the movie, could be the experience that sticks in the mind to make the flight memorable, she says.
Some believe that the use of e-commerce will be crucial if airlines really want to take the in-flight experience to another, more personal, level. Travellers could, for example, not only book their ticket on the net, but choose their meal and drink from a wide selection, specify when the food will be served, and pre-order duty-free goods, says Henning Boysen, president of GateGourmet.
The prospect is open to mainline and low-cost carriers alike. Alpha In-flight Services is talking to low-cost carriers easyJet and Go, which provide no in-flight catering themselves, about offering a food pre-ordering opportunity on the Internet after booking their ticket, says Kevin Abbott, chief executive.
Alpha is a firm believer that it can manage such a service, but many have doubts. "Greater personalisation of service is certainly desirable for the passenger, but we have to be pragmatic with what we do," says Adrian Ort, catering services manager at Cathay Pacific.
"The logistics part will be an absolute nightmare and very costly," he says. Managing the special meal choices that airlines offer today is already one of the main headaches for in-flight catering departments.
The greater use of e-commerce to enhance in-flight service is an open question at present, but is a good illustration of the broad and creative thinking that the industry is bringing to bear on this area.
Whether an airline is an early adopter of new thinking, or a follower, any who risk neglecting their in-flight service will do so at their peril.
Source: Airline Business
