How SMS Can Solve the Premium Cabin Riddle for AirlinesLet’s paint a nightmare scenario. It’s a Sunday morning following a wedding that went late into the evening. Your next two hours will be spent packing up a hotel room, […]
Let’s paint a nightmare scenario.
It’s a Sunday morning following a wedding that went late into the evening. Your next two hours will be spent packing up a hotel room, traveling to the airport, going through security, and waiting in a barren terminal. You finally board your transcontinental flight home, where you are rewarded with a middle seat sporting a 30-inch pitch (legroom), and the man to your left snores. Enjoy the next five hours… oh and don’t forget your mask!
This scenario is the reality for many leisure travelers. And while most are ecstatic to be traveling again as pandemic era restrictions are peeled back, many are wary of traveling the way they used to. This wariness creates an enormous opportunity for airlines.
An industry bounces back
One would not be surprised to learn that the travel industry suffered substantially during the pandemic and associated lockdowns. The airline industry will have lost a collective $174 billion by the end of 2021. United Airlines alone took a $7 billion loss last year. Anecdotally, anyone who could travel over the past 18 months will point out the same: empty middle seats, no lines at security, half-full planes. The airlines are now looking for ways to scrape back some of that money. Fares that may have been low to lure back travelers are starting to inch up as demand reaches pre-pandemic levels. Most major airlines are now filling cabins, and folks who were grounded for a year and a half are ready to fly again.
That said, one group of travelers that have not come back in droves yet are the all-important business travelers. Australian airline Qantas has only seen 65% of that traffic return, while many airlines have seen that number drop even further. When you look at an airline’s finances, it becomes clear how vital those business travelers are. A leisure traveler that buys a basic economy ticket three months in advance is not as valuable as a business traveler that books a premium seat 24 hours before an important meeting. So, while airlines like Delta may have seen 85% of their domestic leisure bookings return, their balance sheet is not nearly as healthy as that number may indicate.
More space, please!
Let’s revisit the flight experience we mentioned earlier. Most folks would prefer to travel in a premium cabin if it weren’t so much more expensive than economy. The food, the wine… the leg space! (Breaking the fourth wall to say I’m 6’3″ and would very much appreciate it.) However, a premium cabin comes at a premium price – for now. While British Airways and American Airlines transatlantic flights have been found around $3000, down nearly 67% from the standard $9000 cost, these rates are still substantially more than economy fares.
But still, airlines such as United are betting big on premium cabins. They plan to increase premium seating by 75% on all North American departures. So how do we fill these seats?
A familiar channel with a new use case
One thought is using a channel such as SMS for outreach. Many airlines’ websites or apps will publish this information, but it’s rarely a proactive approach. Sometimes at a gate, you may see ‘upgrade available,’ but then you are required to wait in line to speak with an agent.
Consider how you might feel if you were ticketed to travel home with a domestic coach fare and received a text message directly to your fingertips offering you an upgrade for a nominal fee in just a few clicks. The person at a bachelor party or returning from a large sporting event might decide that the extra amenities in business class are worth the price. Or what about the person who collected miles for an entire year without the opportunity to redeem them.
Furthermore, airlines could reach out to non-ticketed customers. “Hey, we know you fly to San Francisco a lot. Here is a business class fare that is 30% cheaper than average.” This scenario is just an example, but airlines truly need to innovate and get creative with their messaging. SMS, with its 98% open rate, would be a home run.
A last-minute upgrade is tempting
Airlines should already be leveraging SMS for communicating announcements such as gate changes, delays, and ticket delivery. We suggest a new use case: friendly but aggressive marketing. For a large class of leisure travelers, impulsive behavior while on vacation is half the fun. Think about Southwest’s most successful ad campaign: Wanna get away?
Now you are simply asking your travelers: Wanna get away and travel like royalty? We should all be so lucky.