Despite profit projections of $35.6 billion in 2016, airlines must shift focus to the revenue and profit potential emerging from mobile commerce, according to the latest monthly industry brief from CellPoint Mobile, ‘Mobile Commerce and Payment Innovation Across the Airline Sector’.
Airlines that embrace mobile commerce strategies and payment solutions benefit by establishing permanent, internal links to currently untapped direct-channel and ancillary sales, according to the brief, and they create a companywide mentality that aligns more closely with their passengers’ mobile-centric behaviors.
The revenue potential is vast, with eMarketer predicting global digital travel outlays of $817 billion by 2020. According to research from SITA, over 90 per cent of travelers want to use mobile devices to search for flights, obtain flight updates and receive boarding passes – what SITA calls “the joined-up journey.” Travelers demand reliable connectivity that gives them more control over their travel experience and expands their options for on-the-go travel purchases.
“Airlines should extend their thinking beyond selling more legroom, overhead bin stowage or a day pass to the airport lounge,” according to CellPoint Mobile. “A typical journey involves so many touchpoints beyond the airport or aircraft, so why aren’t more airlines pursuing more opportunities to cater to their passengers’ need for seamless, secure, on-the-go transactions from their mobile devices?”
Many airlines are failing to leverage the benefits of mobile commerce for reasons that include:
• Absence of e-commerce as a core element of corporate business, marketing and sales strategy
• Siloed operations and lack of ownership for mobile commerce and mobile payments across multiple touchpoints
• Failure to deploy secure and efficient payment technologies that build revenue while reducing the need for travelers to repeatedly expose confidential financial information
• Legacy technology limitations that make it difficult or expensive to build effective e-commerce and mobile payment technology on the back of aging or resource-constricted IT infrastructures
Airlines must also take into account traveler expectations that have been formed by such trends as ride-sharing and personalized web-based shopping. While Airline Trends notes that innovative products and services in one industry raise the bar for all industries, CellPoint Mobile urges airlines to pattern their mobile and broader e-commerce efforts after successful mobile commerce leaders and innovative airline peers.
The brief acknowledges current airline efforts to support mobility, through better in-flight connectivity and branded websites and apps that make it easy to schedule or change travel arrangements, select a seat and receive boarding passes. But given the highly competitive nature of the airline industry, carriers are urged to enhance their technology platforms, sharpen business ownership of e-commerce and customer experience, and adopt a proactive selling mentality to capture the full revenue potential of the mobile commerce and payments environment.