If you attended APEX Asia or FTE Asia this week in Singapore, you probably noticed a few themes for the Asian air travel market and beyond. Personalization – driven by consumers empowered by connectivity and unlimited choice – is in high demand in the air travel industry and is set to transform the airline passenger experience.
Business is Booming
A rising middle class has seen a large demographic of affluent Asian travelers spread their wings. China leads this trend with a forecasted 148 million Chinese travelers expected infuse $188 billion in the worldwide travel and tourism market this year. And while no part of the world has escaped the travel-hungry clutches of Asian tourists, notably, Asian destinations are among the most popular, spurring a hotbed of inter-regional and domestic competition.
Ongoing partnership agreements in the region such as Qantas’ and Emirates’ collaboration, and more recently American Airlines’ agreement with Japan Airlines, see Asian carriers serving new routes and destinations worldwide. Within Asia-Pacific, traditional carriers are leveraging ventures with low-cost counterparts to keep up with increasing demand.
Passengers Will Vote With Their Feet
Regardless of the airlines’ size and business model, higher stakes have led to several passenger-centric initiatives. “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,” explained Barathan Pasupathi, Jetstar Airways’ CEO in the opening keynote address at FTE Asia.
Some of Jetstar’s initiatives include responding to preferences of its tech-savvy passengers with mobile check-in and self-service kiosk options. Recent campaigns from the airline, such as the #BecauseYouCan campaign or its ongoing December Babies contest see the passenger at the heart of its brand messaging. Cathay Pacific’s #LifeWellTravelled digital marketing campaign utilizes storytelling to evoke a brand narrative with the passenger journey as its crux.
“The passenger experience is now central to airline profitability,” Leader proclaimed. “Half of all airline profits industry-wide are being directed to enhance passenger experience.” Survey results from SITA OnAir find that 82 percent of airlines are investing in solutions to improve personalization.
“82 percent of airlines are investing in solutions to improve personalization,” – SITAOnAir 2015 Airline IT Trends Survey
Mobile is Everything
“The future is mobile,” said Mike Crump, partner at Honour Branding firm during the FTE Asia day two Think Tank session. Whether for pre-flight check-in or to consume entertainment, mobile-driven consumer behaviors are turning the industry on its head.
Bolstered by connectivity, the in-flight entertainment (IFE) sector will likely feel the burden or the benefit of mobile the strongest – depending on how you see it. “The majority of passengers will bring their own devices and content and will consume via streaming experiences in 2025,” forecasted Panasonic Avionics’ Mathias Walther during FTE Asia.
Welcome to the New IFE
Asia will likely lead the way as a regional influencer in the revolution of IFE since, as Leader announced in APEX Asia keynote – citing results from APEX’s 2015 Global Passenger survey, Asian travelers value entertainment above all.
But will mobile disruption spell the end of embedded seatback screens? The opinion is invariably mixed. “We’ve started to see briefs for long-haul that are asking us to not have IFE screens,” noted Ben Orson, managing director of JPA Design when asked about how connectivity is influencing seat design during an FTE Asia panel. Voicing the opposition in an earlier conversation at APEX Asia, MediaCorp’s chief digital officer, Shane Mitchell said, “I think that there’s still a role for seatbacks. I think that [replacing the seatback with tablets] overlooks the fact that consumers really enjoy convenience.”
Regardless of the screen, all agree that the content it supports will change as a result of connectivity and new consumer behaviors. “Hollywood movies might not be the only option – box sets or a constant YouTube, Instagram or Periscope stream might be preferable,” shared Panasonic’s Walther on day two of FTE Asia. “JetBlue/Amazon Prime-style partnerships will become far more normal.”
Destination-specific content is also expected to take off. TripAdvisor recently developed an app with Western Outdoor Interactive (recently acquired by Global Eagle Entertainment) for Air New Zealand that is fed into IFE systems and allows passengers to look into destinations before they land. The app’s content is updated once a month and is certified on both Panasonic and Thales platforms.
“Along with personalization and customization, I think airlines should be thinking about giving passengers access to local content that they love wherever they are,” MediaCorp’s Mitchell said, adding that live TV and event-based programming like live sport are set to take off, too.
Regionally Flavored Services
During the “Airline Passenger Experience – Perspectives From Asia” panel on day two of APEX Asia, representatives from Qantas and China Southern Airline were quick to point out that the need for localization extends far beyond IFE. From China Southern’s partnership with New Zealand chef Al Brown for the airline’s Auckland-Guangzhou to Qantas’ emphasis on employing staff with strong language skills, the benefits of regionally inspired approaches reach into catering, services and beyond.
Targeting New Retail and Advertising Opportunities
There was hardly a conversation that took place at either conference that didn’t touch upon the untapped potential of advertising and retail partnerships. By 2025, Panasonic Avionics’ Walther forecasts “Airlines will think more like retailers and partnerships with major retailers such as Amazon will create new opportunities.”
Crucial to unlocking the potential of advertising revenue streams is tracking passenger analytics. “If you’re able to capture data about your passengers on the fly and to provide it to the people who are interacting with them, you’re going to have better customer experience interactions and will better able to monetize them,” APEX CEO, Joe Leader pointed out.
“If we start approaching entertainment on planes as a personalized experience… advertisers are very keen to talk to people on that level,” said MediaCorp’s Mitchell. “It’s a billion-dollar frontier.”
In addition to inter-airline alliances and strategic partnerships, all agree that collaboration amongst industry organizations will pave the way forward. Endeavors such as APEX and FTE’s freshly announced colocation of the 2016 EXPO in Singapore will go a long way in fostering more joint discussions.