Customizing is the buzzword for airlines in order to avoid ‘turbulence’
The business outlook for most regional airlines is anything but bright despite projections of steady tourism growth.
The International Air Transport Association has predicted that total profits of airlines in the Asia-Pacific region will dip nearly 14 percent in 2017 to $6.3 billion. This has led Nick Evered, senior vice-president and general manager at travel and expense management firm Concur to query in a newspaper article: “Is it just a matter of getting through the economic doldrums or there’s something more fundamental that’s awry?”
That “something” is technology, which is forcing airlines to fundamentally alter their way of doing business by being more responsive to the specific needs of individual customers. This is the new area that an investor should look for in airline stocks.
The first thing to look for is whe ther the carrier has developed alternative means of selling tickets. The old system of relying on travel agents has broken down because the internet has made it easier for travelers to book flights them- selves, and most of them do.
There’s no shortage of websites for booking flights. The key challenge facing airlines is to find ways to win back customers by becoming full-service retailers. To do that, they have to be flexible in catering to the specific needs of individual clients.
For instance, a customer may want to fly from Hong Kong to Shanghai on business class. But, he or she can do without the meal and the extra luggage. Some carriers have already begun offering travelers multiple options to customize their travel needs and costs.
Nearly all airline companies run websites for customers to book their flights and attend to a host of other travel-related matters. But, they need to offer more options, or customers would hunt for the cheapest flights on Ctrip or any other travel-service provider which emphasizes efficiency and bargains.
The willingness and capability of regional airlines to customize is crucial to their success. Before you buy airline stocks, get into their websites and check how many options you have in customizing your travel experience and budget.
Before you buy airline stocks, get into their websites and check how many options you have in customizing your travel experience and budget.”