The 2023 World Passenger Survey, based on over 8,000 responses from air travelers during the spring and summer, indicates that the implementation of personalisation in the air shopping experience is expected to evolve gradually.
GLOThe latest survey by IATA reveals that airline passengers express greater satisfaction with the booking process compared to other stages of their air travel journey. However, airlines see potential for improvement in creating more content customers and generating additional revenue through personalized air shopping experiences, even if passengers may not have actively considered the possibilities.
IATA Director General Willie Walsh acknowledged that despite booking being the highest-rated category in terms of satisfaction (84%), there is room for enhancement, as discussed during the World Passenger Symposium.
The 2023 World Passenger Survey, based on over 8,000 responses from air travelers during the spring and summer, indicates that the implementation of personalization in the air shopping experience is expected to evolve gradually. This transition relies on airlines enhancing their capabilities to offer products in real-time, facilitated by NDC-supported technology.
IATA’s overarching objective is for airlines to shift toward a sales environment resembling that of online retailers, where customer purchase histories inform tailored shopping recommendations. Airlines envision personalized offers primarily as bundled product suggestions. For instance, a passenger with a history of purchasing premium products might be presented with a package offering an extra-legroom seat and lounge access at a discounted bundled price. Such offerings are anticipated to boost both revenue and customer satisfaction.
A McKinsey study, recently revised, indicates that airlines could unlock up to $45 billion in new value by 2030 through widespread implementation of what IATA terms as modern retailing. This involves transitioning to an all-NDC environment for various aspects like merchandising, payment, servicing, and settlement. Personalized offers generated dynamically at the time of flight queries are expected to contribute $27 billion to this total.
While some airlines have started experimenting with personalized offers, it has not yet become a widespread practice. For instance, American Airlines has tailored some offers for AAdvantage loyalty program members, and Singapore Airlines has used its NDC program for customized offers. Air France-KLM and United have also initiated steps toward modern retailing.
Despite limited current adoption, the industry is progressing in its ability to offer dynamic, real-time tailored offers, though not necessarily personalized based on individual histories.
Research indicates that once personalized offers become widely available, passengers are likely to be receptive. An Atmosphere Research survey found that 75% of U.S. airline passengers were comfortable sharing personal data if it meant receiving appealing offers and better fares. Additionally, 70% expected airlines to track their purchases for more tailored flight shopping results. Walsh likened the potential acceptance of personalized offers to the positive reception of check-in kiosks in the airline industry a couple of decades ago, highlighting that customer satisfaction often surprises industry expectations.
