Airlines face stiff competition from airports and other suppliers as they aim to boost profits by increasingly personalizing air travelers’ passenger experience

To successfully compete for passenger spend, airlines must understand and gauge which services and touchpoints along the customer journey are valued by passengers, and which they would be willing to pay for, agreed experts speaking at Partnering for Personalized Travel, an Airlines International/IATA executive briefing, held on 28 October, in association with KPMG.

Passenger experience is moving up the business agenda for airline chief executives, but even now third parties such as airports are stepping into traditional airline territory by offering services such as flight bookings online.

“Doing nothing is not an option,” warned David Rutnam, Manager, NDC Regional Implementation, IATA, at the briefing.

The future of ‘loyalty’ and its meaning for airlines and carriers’ ability to both empathize with passenger needs and to differentiate themselves in a sea of players are subjects increasingly rising up the scale of importance for airline leaders as they explore passenger experience, said James Stamp, UK Head of Transport & Global Head of Aviation, KPMG. 

Initiatives such as IATA’s Fast Travel Program and New Distribution Capability (NDC) support airline innovation and collaboration with third-party suppliers to improve the passenger experience. At the same time, those programs and those undertaken individually by airlines will require significant investment, with limited capability to future-proof their initiatives. 

“I’m not sure you can predict anything beyond five years,” said Martin Herbert, Global Customer Experience Lead, KPMG. 

In addition to financial investment, major improvements to the passenger experience will likely lead to changes in airlines’ business models, speakers predicted. They said a probable outcome is growth in both the number of alliances and profit-sharing arrangements between airlines and third parties.