Industry context

Compared to the largely grounded global international air travel sector of just 12 months ago, the airlines sector has seen a steady – if turbulent – return to the skies.

In many geographies, domestic travel saw a return to pre-pandemic levels of travel well before COVID-19 had begun its decline, while international travel significantly lagged in numerous regions thanks to ongoing restrictions and local lockdowns. Indeed, in some geographies, the airlines sector continues to suffer as both domestic and international travel remains halted – demand hinges entirely on local restrictions.

Customers now see holidays as essential to wellbeing rather than simply a luxury, and after a three-year wait, passengers are excited to be traveling again.  The degree of "revenge" travel causing the demand surge, and how long it will last as pent-up demand is satisfied, is also yet to be seen.

One issue facing the sector as it has reopened over the past year has been a global labor shortage on the ground. Airports and their partner organizations have been unable to bounce back to meet increased capacity, having either laid off staff or lost them to other sectors. Airlines are still suffering from the huge financial losses of two years of COVID-19 closure, and many are still unable to employ all the colleagues needed to provide the pre-pandemic customer experience that passengers expect.

This shortage of labor has led to disruption at many airports. Customers waiting hours to navigate security queues or retrieve their luggage has damaged public trust in airline services, and it will be integral for these services to recover for continued growth of the sector. Many markets have seen record-breaking delays and cancellations of flights, which has impacted the customer experience significantly – passengers are having such negative experiences that there’s a risk of international holiday-makers being replaced by stay-cationers, who are now looking for any ways to cut their spending as we enter a global cost-of-living crisis.

As the challenges of the pandemic are replaced by the challenges of a looming economic crisis, it remains to be seen how airlines will fare when meeting customer needs as the drawstring tightens on customer and sector purses.

Key trends

Bouncing back to pre-pandemic service is difficult, but must be a priority for airlines hoping to retain customer trust. With disruption abound and cancellation policies moving away from Covid-era full refunds, customers need airlines to stand by commitments to reimbursing for their trouble – the lack of ground staff to handle complaints means trust could fall through the floor. Customers still expect sanitary conditions for passengers and crew, though this is less of a factor this year.

People are essential to problem resolution against a backdrop of cancellations and delays. Chatbot technology can’t yet meet the needs of disgruntled customers, yet an absence of personnel to resolve challenges on-the-ground Is leaving customers with unresolved issues.

Customers expect pre-pandemic service, yet with a depleted workforce and fluctuating restrictions regionally, it’s not possible to deliver that. Patience runs thin very quickly as the novelty of being able to travel again wears off and pre-pandemic BAU is expected. Rising operational costs exacerbated by rampant inflation mean airlines will need to hike prices to survive, leaving some customers without the means to travel for the expected price.

Time & Effort

While booking processes are largely digital and seamless, we are a long way from an automated airlines industry when it comes to checking in and navigating airports. The requirement to show health passports has declined rapidly and will continue to be phased out, streamlining the airport navigation process. Although the labor shortage continues to add strain to a suffering industry, delays and cancellations will greatly inconvenience passengers.

The sector has made strides when it comes to contactless experience across the customer journey from home to destination, but there’s a way to go in terms of catering that experience to unique customer needs and creating an experience that works for everyone and goes the extra mile.

ESG is a non-negotiable for customers who are increasingly conscious of their impact on the environment. Airline providers will need to be aggressive in embedding ESG across supply chains and their product, in what is a carbon-intensive sector. Continued care for an overstretched workforce is a must.

The Customer Experience Leaders

Emirates, which is well known for its attention to detail when it comes to servicing customers, remains unchanged in the top spot in this year’s Hall of Fame. Broadly, airlines operating out of the UK and the US have taken a big hit in this year’s rankings, which is testament to the varied performance across regions.

Airlines operating in the Asian and Middle Eastern markets have bounced back more effectively with top ranking brands like Emirates, JAL and Saudia showing they can hold their own. While there’s clearly a way to go for a lot of airlines, these top performers are showing that a full recovery is possible.

With no airports featuring in the Hall of Fame this year, it’s clear that disruption at ground level has caused a hit in customer excellence performance. But as airlines poise to streamline processes, digitize the customer experience with fewer touchpoints, and continue upskilling staff and filling vacant positions, a full recovery to pre-pandemic performance is possible, if not inevitable.

The current excitement of customers being able to travel abroad has driven a surge in customer numbers and consequently service issues in terms of service delays, cancellations and other disruptions. Airlines that are able to fund and fill labor gaps and bolster their service delivery teams the fastest will emerge victorious in the sector. The use of technology and automating processes is required to help pick up the shortfall and meet the customer experience expectations of passengers, who compare the digital journey now to best of class sectors.

Malcom Ramsay
Airlines Sector of Excellence Lead