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Airline Marketing: Flyers Prefer Low Prices Over Perks
A billion U.S. passengers fly every year. There are estimated to be 4.5 billion scheduled passengers worldwide in 2019, 130% higher than in 2004. International tourist arrivals to Europe have grown by more than 400 million since 1990. People are traveling more than ever, and airlines are constantly evolving to meet the needs of travelers. The latest flight experience change is from Emirates, which has introduced a pared-down, or “unbundled,” business-class fare, reducing some of the perks Emirates flyers may have come to expect. Perks versus price, particularly with the introduction of airlines like Frontier and Spirit, is an ongoing conversation in the airline marketing industry as travel soars in popularity.
More Options For More Flyers Could Boost Revenue For Emirates
Emirates is offering, so far on a very limited basis, a business-class option called “Special.” At the Special level, flyers will no longer have access to the lounge, car service or upgrades, unless they are already Emirates Skywards rewards members and those services come with their types of membership. Previously, luxury perks, like those detailed above, were standard with any level of Emirates business class ticket, including Saver, Flex and Flex Plus.
The reason Emirates is making the business-class policy change may include an interest in “improving financial performance” despite their reputation for a luxury-at-all-costs approach. With the new Emirates Special business-class fares:
- Emirates is hoping to attract the flyers who care more about comfort in the air than amenities on the ground, converting those who might otherwise fly coach class on another carrier.
- Emirates is likely also expecting to entice price shoppers with their Special fares only to upgrade them to the next business-class tier (the price difference is not extreme) to maintain the business-class benefits they are accustomed to.
At this point, the new option is so limited it remains to be seen how it will impact Emirates in terms of market share or brand perception.
Perks Vs. Price: What Do Flyers Want?
Emirates isn’t the only airline trying to hit the sweet spot with customer’s wallets and travel preferences. For travelers willing to pay, first-class lounges, onboard cocktails and high-speed internet connections are among the perks airlines are using to keep them happy. However, 83% of flyers prioritize ticket prices when planning travel, according to a Reuters poll, and 52% of surveyed travelers would not pay more to fly on preferred airlines.
These views are particularly reflective in infrequent leisure travelers, leading more major airlines to create basic fares which are cheaper than prior economy fares and offer no perks, including carry-on baggage or a seat assignment. Discount airlines Spirit, Frontier and Allegiant already operate in a no-frills manner, and their presence in the airline market has changed pricing and offers from the major airlines as well. “It’s impossible to underestimate just how important the effect of low-cost carriers are on a given route,” said William McGee, the Aviation Adviser for Consumers Reports.
How Should Digital Marketers Respond To Airline Innovations?
Low-cost carriers, basic economy class and unbundled tickets, that include every manner of paid-for and not-paid-for carry-ons, are among the many recent changes in the airline industry, which has finally figured out how to be profitable just in the past decade. (This year is predicted to be the airline industry’s 10th straight year of profitability, thanks in large part to pricing innovations.)
Future airline innovations may look more like the perks that modern consumers can get excited about. Virtual reality (VR) and augmented reality (AR) experiences, hyper-personalized travel options, new business models (industry disruptors) and frictionless travel through airports are among the many possibilities that are currently emerging in the travel sector or may emerge moving forward. For digital marketers across all industries, these exciting changes offer opportunities for partnerships, co-branding and activations that reach consumers, even in the air.
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