APEX Insight: Low-cost carriers in Asia are being pushed to higher standards by unprecedented competition, increasing passenger expectations and digital disruption. Jetstar Asia has responded with a customer-centric overhaul of its business model – and it’s working.
With inbound and outbound travel spiking in Asia, the competition for low-cost carriers is fierce. By 2030, North East Asia is expected to be the most visited destination in the world, and according to UNWTO forecasts, a large number of travelers between now and 2030 will come from the Asia Pacific Region. Where are these Asian travelers flying to? Asia.
The travel boom has driven legacy carriers in the region to boost service levels, but perhaps those most affected by these higher stakes are regional low-cost carriers. In his keynote presentation opening Future Travel Experience’s Asia conference, Jetstar Asia’s CEO, Barathan Pasupathi, explained, “It used to be enough for low-cost carriers to offer the lowest fare, but in the past decades, we have seen that passengers don’t just want the lowest fare. So, the customer has become the heart of our business.”
Beyond record travel numbers, Pasupathi asserts that culture, connected travelers and digital disruption have played a significant role in revving up competition for low-cost carriers in Asia and abroad. “The more connected travelers are, the more they expect the journey to be simplified through technology,” he explains. Based on that sentiment and customer studies, enhancing the customer journey through technology has been central to Jetstar’s passenger-first overhaul.
“We conducted a survey and found that 78 percent of our passengers said they hate queuing. When they queue, 85 percent are on mobile,” Pasupathi says. The results led Jetstar Asia to roll out a series of mobile-focused initiatives including a new mobile check-in and self-service baggage drop program, “Straight to the Gate.” At its new Terminal 4 location in Melbourne Airport, Pasupathi says they’ve managed to achieve 100 percent self-service for domestic services.
The airline also did a rethink of their digital platforms, including its website. “The typical layout of booking engine architecture is very linear. Low-cost carriers typically unbundle the travel experience and then bundle it up again,” explains Pasupathi. “But we are now changing the whole experience and moving toward what Amazone, Google, eBay and others have done.” The airline’s booking process has now been simplified from six to three steps, and the new architecture has allowed for better data mining and tracking.
“Websites are no longer just for booking tickets, they’re for booking travel experiences,” Pasupathi notes. A scroll through Jetstar Asia’s webpage begins with the airline’s passenger-focused #BecauseYouCan campaign. In addition to all day, every day low fares that are advertised, passengers with December birthdays are invited to share their baby stories for a chance to win a special birthday present. “We know how it feels to be born in December,” a Facebook post from the airline reads. “People are buying gifts for Christmas, making plans and your birthday is just an afterthought. This year we are going to change all that.”
Among some of the key discoveries the airline has found from improved website analytics is a growing customer base of business travelers. “Forty-one percent of business travelers are flying low-cost carriers in Singapore,” Pasupathi shares, citing research from Mckinsey. “The customers are looking for another variant of business travel.”
It seems that successfully putting the passenger first is turning competition in the Asian air travel market on its head.