Air cargo is a highly volatile business. External factors such as trade policy, consumer sentiment, global events like economic recessions, spreading of communicable diseases, and socio-political situations have an immediate impact on air cargo.
As the COVID-19 crisis continues, airline loyalty programs have become a survival lifeline for airlines. Airlines can harness the power of loyalty programs to generate non-travel related revenue and retain cash by maintaining meaningful engagement through non-air activities and demonstrating compassion for their customers' circumstances.
The air freight business has always been challenged by the very operating model of the business. A significant share of global air cargo is ferried in the available belly space of passenger aircraft. Large scale commoditization of the offering has led to diminishing yields – even while costs continue to rise. There is a significant opportunity for cargo carriers and GHAs to derive higher returns from their cargo product by focussing on differentiated offerings and an elevated customer service that goes along with it. “Special Cargo” is the smart way to productize the air cargo service such that it is tailored to meet specific needs of specific markets.
As airlines strive to be more responsive to changes in demand, reliance and focus on digital and data-driven strategies, especially in the areas of distribution, retailing, and pricing, will allow them to create expanded, personalized ancillary offers to renew their revenue streams and re-establish customer confidence.
The COVID-19 pandemic has accelerated an existing need for change in terms of how airlines manage flight disruptions and irregular operations. Airlines today need heightened situational awareness and streamlined decision-making functions to anticipate and respond to macro and internal disruptions.
By all measures, the COVID-19 pandemic has dealt a devastating blow to global air travel. Fortunately, technology advances and upgrades to conventional airline systems can help passenger and cargo airlines transition into a new economy.
The COVID-19 pandemic has proven that it’s important for air cargo companies to adapt quickly, especially when market conditions, regulations, and customer priorities suddenly change—both to tide over future crises and to focus on long-term growth. For this, they require smart, digital tools to succeed.
Due to a lack of comprehensive data about their customers owing to intermediaries and insufficient control over the pricing process, airlines are deprived of making the right pricing and product decisions based on direct, individual customer interactions. It doesn’t have to be this way!
The entire airline industry is undergoing a digital revolution, with airlines relying more than ever on digital technology to manage everything from booking and in-flight entertainment to aircraft maintenance. In this scenario, digital infrastructure will become the foundation that supports both the launch and the entire lifecycle of new airlines. It will help new companies differentiate themselves from competitors as they scale.