0:00 - On partnerships 5:28 - Magic Wand 8:44- Advice to younger self
SkyTeam0:00 – On partnerships
5:28 – Magic Wand
8:44- Advice to younger self
Read the full transcript below.
00:00
GLO: What is SkyTeam’s approach to partnerships?
Mauro Oretti, Chief Operating Officer, SkyTeam: In terms of partnerships, the first thing I will say is that SkyTeam carries a very strong DNA that comes from airlines like KLM and Delta. KLM and Northwestern were the first two airlines to create a deeply integrated alliance in the 90s. That DNA has remained and has translated into the transatlantic joint venture with AirFrance/KLM, Delta and Virgin Atlantic. It is the only joint venture of its kind in the industry that is profit-based and not revenue-based. So, the first notion is that we carry this important DNA in our philosophy. The second is code sharing. We try to retain traffic within the alliance, but of course, the alliance can only cater to 90% or 95% of the needs of our members, not 100%. So, we need to allow a degree of flexibility to the members in case they need to cooperate with a member of a competing alliance.
Specifically, on loyalty, I wanted to mention our three focus areas: accruals, redemptions, and recognition. The tools that we have created for the airlines at SkyTeam are linked to these three areas. Looking ahead (the budgets are going to be a little bit better), we will most likely invest in improving the experience in these areas. Specifically, when it comes to accruals, making accruals more seamless. Today, there is a coexistence, for example, of revenue-based and distance-based. And from a technology perspective, this is not easy to bridge. So, we need to do something to enable a better coexistence of airlines that have chosen revenue-based and airlines that have chosen distance-based. The other piece that we are looking at is miles or points as a currency because that would enable the fliers to have more options for redemption, including upgrades.
4:04
GLO: What about partnerships outside of the airline industry? Are you looking to expand there as well?
Mauro Oretti, Chief Operating Officer, SkyTeam: Absolutely. One of the things that has happened at SkyTeam in the last few months is that we have created an innovation department. We have a team of people—a small team but very strong and very motivated—that is looking at innovation specifically. And that’s an area where partnerships come in handy. For example, we have developed a partnership with Plug and Play, the incubator in California, that will help us adopt a solution for knowledge sharing that is evolutionary. Another area where partnerships come in handy is sustainability. We have partnered with the World Economic Forum to reach 10% SAF by 2030. We are partnering with the IAWMA, the International Association of Waste Management in Aviation. We want to partner with another association that we just discovered. So that’s another area where we can do a lot of things.
5:28
GLO: Thank you very much for your insights on the loyalty industry and the airline industry. At the Global Loyalty Organisation, it has become a tradition that we ask interviewees two personal questions. The first question is, if you had a magic wand and had an unlimited budget, what would you invent?
Mauro Oretti, Chief Operating Officer, SkyTeam: It would be something to solve the biggest challenge that airlines today have in the customer experience space, and that is managing irregular operations. I think the industry doesn’t do a good enough job of managing irregular operations and disruptions. The whole field of service correction and service recovery is very close to my heart. Hence, I would invest in that space.
6:26
GLO: And is there actually already technology which would help to do that? Is that something you’ve been looking into?
Mauro Oretti, Chief Operating Officer, SkyTeam: There is technology. However, is it enough to do whatever we want to? I don’t know. AI can play a role in this, but also simply people—call centers. Sometimes you just want to talk to someone, and you need to empower that someone. Empowerment is another very important topic: empower the frontline to solve those problems. We are not doing a good enough job.
7:04
GLO: Actually, that brings me to another question. There have been a lot of layoffs, especially customer-facing roles, that have been cut as a result of COVID, the implementation of AI, and digitalisation. Listening to what you say, you think it’s very important to actually have human interaction with the customer.
Mauro Oretti, Chief Operating Officer, SkyTeam: In my opinion, it is hugely important. I find that human interaction can be an important ingredient in problem-solving. There is a cost element there, of course, but it’s an important piece. I always mentioned the service recovery paradox. If something bad happens, like a flight cancellation and if you (as an airline) manage to recover that passenger by offering a credible alternative nicely, quickly and effortlessly, the loyalty of this person will become higher than the loyalty of a person who has not suffered any disruption. We need to do a better job in that area.
8:24
GLO: If you could talk to your younger self, who is starting out in the aviation industry, having the experience you have now, if you were able to give yourself some advice, what would that be?
Mauro Oretti, Chief Operating Officer, SkyTeam: When I started in aviation on January 1st 1990, I was coming from the automotive industry. And I thought “Yeah, great aviation”, but I was underestimating the complexity. I was greatly underestimating the fact that, at the time, the profitability of the industry was very poor. Today, it is better, but still not high enough. So that’s to be aware of where you’re going. Because it’s a very fascinating industry with low turnover, but it’s a challenging industry. The second piece of advice would be to keep on learning—permanent learning—because the more you learn, the more you can understand how to navigate the industry and, frankly, how to bring benefit to the industry and how to serve the industry.
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