Cheaper fares will not earn loyalty

As airlines prepare for the gradual return of bookings, United Airlines’ is removing a page from the hotels playbook.

The hotels’ approach to brand loyalty is of particular interest to airlines returning to greater passenger demand. Speaking to investors on an earnings call, United CEO Scott Kirby hinted at how the airline might present itself to businesses when business travel (possibly) rebounds in a post world. -Covid. Although he did not provide a specific strategy, Kirby said the current industry mentality of relying heavily on “price to win customers” needs to change.

“Hotels do a remarkable job of having brand value, getting guests to like them and retaining customers for reasons other than price,” Kirby said. “Getting our customers to love us and choose us because they love us, love what they stand for and they trust us rather than competing on price. “

Hold a seat for loyalty

While United are unlikely to reveal any branded spinoffs, Kirby’s point underscored the importance of relying on loyalty programs and going beyond cheap flights to attract travelers. While still mired in the pandemic, every airline is looking for differentiators that will help them attract new businesses as they exit the pandemic.

Delta’s pledge to block the middle seat has apparently paid off: Last week, the airline told investors it was seeing a “significant bonus” generated by the decision. Although its middle seats are open, American Airlines is also seeing an increase in loyalty. A representative for the airline told Adweek that he saw a 40% conversion of new travelers into their loyalty program.

Airlines are hopeful that every new customer won amid the pandemic pays off down the road, as United doesn’t expect to see a substantial recovery until 2023.

Although the Christmas holidays gave a boost, United’s profits were, as expected, bleak. The airline posted a net loss of $ 1.9 billion in the fourth quarter and $ 7.1 billion for the whole of 2020. As the new year dawned, it expected its Operating revenues fell 65% to 70% this quarter, with capacity down 51% from 2019.

Leave a Reply

Your email address will not be published. Required fields are marked *