Airlines’ Race to Bottom Price Gets Most Passengers
Neither brand loyalty or airline reputation will factor into the ticket purchases for infrequent flyers — they want cheap seats, researchers found.
So these passengers may not be pulled into loyalty programs that incentivize increased spending, theorized Reuters/Ipsos in research released on Wednesday and summarized in a Reuters article that ran in The New York Times that day. However, they also won’t be turned off by a bad brand reputation.
“The poll showed 83 percent of Americans put ticket prices among their chief considerations when booking personal travel, outweighing travel perks or an airline's reputation.”
So travel and hospitality marketers may notice two main takeaways from this research.
Airline Loyalty Programs Should Market to Big Spenders
Infrequent flyers may spend the most money in total, but they’re brand-agnostic, researchers found.
So airlines may be better off concentrating their loyalty marketing efforts on passengers in business and first class seats, which the Reuters research finds these marketers are doing “with plush airport lounges, fancy onboard cocktails and high-speed Internet connections,” as well as faster boarding options and seats with extra leg room.
Price Can Shield Brands in Bad Times
The Reuters research shows consumers already distrust airlines, but they’ll book travel on them, anyway.
The stated reason for the distrust does seem to overlook a factor. While the findings show respondents were upset about baggage fees and more seats squeezed onto planes, and that “about 53 percent of respondents said airlines prioritize profits over passenger, safety despite eminent safety records and enhanced airport security measures,” Reuters/Ipsos surveyed consumers from June 22 to 29.
The incident during which United’s overbooked plane policy resulted in a bloodied senior citizen passenger being dragged off of its plane happened in April. Then United quietly created a new overbooking option in July that may result in infrequent flyers being incentivized to give up their seats to business passenger who will pay a premium for the seats.
Regardless, the Reuters/Ipsos research finds:
The consumer focus on ticket price can work to the advantage of airlines. Carriers like United Airlines and Delta Air Lines may be shielded from public relations disasters when travelers care most about getting a good deal.
(It’s unclear which Delta incident the article is referencing. Conservative pundit Ann Coulter recently had a disagreement with the airline.)
However, this prediction appears to be coming true, the article reads. Presented with a no-frills option, 40 percent of United passengers are taking the cheaper seat; and about half of American Airlines travelers did the same.
What do you think, marketers?
Please respond in the comments section below.
Related story: United ‘Quietly’ Intros New Overbooking Policy