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How does an Airline Business Succeed?

p.s. a big factor has to do with passenger service!

For an airline business to succeed it has to fully understand how to run its operations correctly.

The airline business is indeed a growing business. Yet it is a tough business to be in, with a huge overhead cost and regulatory requirements to constantly comply with.

The ultimate decision-makers of the airline business

An airline’s stockholders are concerned about their return on investment. Board meetings can sometimes be a battle over decisions on profit versus operational and personnel expenses.

The stakeholders are always concerned about making sure their airline runs smoothly, and at the same time achieve hefty financial returns for themselves.

This can be a big challenge for the bigwigs making decisions for your airline. It takes a constant situational service-awareness to make an airline business succeed.

The importance of excellent customer service

Providing a consistently excellent service experience for the airline passenger is a major key to running a successful airline. But there is so much more required.

Safety and On Time, a common policy used to make an airline business succeed

A passenger steps on an aircraft with the main foci and expectations of reaching the destination safely and on time, every time they fly.

The typical airlines’ “safe and on time”-policy is often marketed to the flying public as a slogan.

Avoiding unpleasant experiences, such as delayed flights, bad weather conditions, operational errors, or mismanagement of their flight is across the board is common among all major airlines.

Delta Airlines, for example, promises its customers that they will arrive at their destination “on time and with little stress”.

The product an airline sells you is a service, not a tangible, or touchable product.  

What airlines do to sell you their service

The moment a passenger steps into the airport terminal and initial contact with the airline’s representative the job of the airline is to ease the travel-stress imposed on the passenger.  

The pressure to deliver a pleasant experience from that airline continues non-stop from there. Airline performance commitments to the customer do not end until after the completion of your flight.

Frequent Flyer Programs

Flight programs such as “Frequent Flyers” or “Privilege Clubs” launched by airlines provide credit points for the passengers. Passengers can then redeem their points for upgrades. Upgrades can be had for many things. Free flights and other VIP services, awarded by a point system, are common awards.

The point system is based on how many miles you fly on your airline within a given time-period.

Airline frequent flyer points have proven very popular for building customer brand loyalty for the customer’s chosen airline.

Airline differences in the level of services provided

Differences between airlines and the way they operate are widespread. Every country has its own “flag carrier”, with different service and product offerings.

You will find that some airlines provide impeccable service, while others provide mediocre to terrible customer service. Many passengers prefer to fly with excellent service providing airlines, although their ticket prices are generally a little higher.

Most of the airlines with the worst customer experience reviews are low-cost budget carriers.

But those carriers also tend to utilize a lot of third-party help to handle their flights. Such help includes third-party gate agents and ground handlers, even pilots and flight attendants, working for less than industry standard wages.

As far as customers are concerned, one bad customer experience may result in a  loss of that customer. That passenger he may not fly with that airline again on that airline’s future flights.

Airline brand improvement strategies

Airlines are constantly attempting to improve their image as a preferred carrier in many ways, to retain and to get new customers.

Fleet modernization, improved staff training, and improved inflight services, comfort, and experience are all hot items on an airline’s agenda.

Marketing is another layer of airlines image-strategy. This, in spite of fairly few customers making buying decisions based on fancy posters and advertisements alone.

Supersonic jet from Hermeus, a US company
Are supersonic passenger jets going to be part of airlines’ fleet modernization in the future? Here the supersonic Hermeus, being built by a U.S. aviation company. Credit: Hermeus.

A broad passenger demographics

Some passengers don’t really care too much about the airline’s services. Those are the passengers who just want safe and efficient transportation to reach their destination on time. The type of passengers happy with such a service are most likely to book low budget “no frills” airlines.

Meals, timeliness, comfort, safety, convenience, and security are the most demanded items from airline customers choosing a flight experience.

No one wants to risk their lives on board any airline that is not operating safely.

Consistently selling out every seat on a flight is every airline’s dream. To reach every person likely to purchase a ticket on a specific leg the airline needs to take all the passenger preference-variances into consideration.

The U.S. Southwest Airlines Business model

The “Southwest” model of operating an airline has a remarkable reputation in the airline industry. Southwest Airlines’ timeliness and comfort level have a strong customer appeal attraction.  

Their operating model is consistently building a loyal customer base, ensuring future bookings from repeat customers.

To maintain customer loyalty, an airline needs to maintain its reputation for providing service excellence. 

Top-level management’s role

And that is the job of competent top-level management. As in any other business, an airline can quickly go downhill if it doesn’t maintain its excellent service reputation.

If customers stop being loyal, leaving for another airline, then the airline may get into financial trouble. And, if you have no customers then you have no business!

To make an airline business succeed you have to know what you are doing. Airline management should always be vigilant and never allow the reason for success in the past to be forgotten.

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