Unless you’ve had your head under a rock, you might have noticed that airlines are struggling to survive right now. Their entire model is based on free movement between destinations, a right that has since been rescinded by the global governments who are trying to get a grip on the pandemic. As such, airlines are tightening their belts, reporting losses they never thought they would, and predicting they are 3-4 years away from returning to 2019 traffic levels.
But from these devastating times comes green shoots of success and those who adapt quickly, preparing for the rebound usually always flourish. It’s one of the reasons that Virgin Atlantic would aggressively run its advertising campaigns during recessions when no others would advertise. It was this counter-intuitive approach that kept Virgin in the hearts and minds of the great British public.
Yet right now, even this once loved brand is fighting for its survival in the same way its competitors are. But while bean counters are trying to conserve cash flow, limit outgoings and hold on to as much revenue as possible to survive, could it be that investing in cabin products – that have some of the longest lead-times to roll out for any industry – are still as important as they were before this pandemic?
Picture this. In 2023/24 when airlines can allegedly brush off their chequebooks, Qatar Airways’ QSuites will already be over 6 years old. Worse than that, Emirates’ A380 Business Class product will be verging on 15 years old and that’s ignoring the fact that British Airways will still have a business class product on some aircraft over two decades old. When you pair that with the fact that a new product takes a couple of years to develop and roll out, we’ll be looking at late 2020’s before we start to see cabin innovation once again.
It’s not just about seat design though, it’s also about passenger experience. The two biggest shifts to passenger experience in the past three decades can be summed up with Virgin Atlantic’s decision to offer personal TV’s to every passenger in the 90’s and since then, the (partial) introduction of connectivity.
However, with the apparent stagnation of product innovation in aviation during this pandemic, airlines could find themselves victim as the rest of consumer technology advances over the next few years, leaving airlines even further behind what we will be accustomed to at home. Even before the pandemic, it was clear that now is the time for airlines to invest in design and passenger innovation.
The landscape in three years may well change – not radically mind – we certainly won’t be travelling in plastic bubbles, or walking through disinfection tunnels and business class travel, no matter what sensationalist headlines you read, will not disappear. Instead we should be seeing more emphasis on space and privacy and those Business Class seats will be filled with a higher percentage of leisure travellers meaning the product offering might have to adapt. To avoid congregations onboard, airlines might invest in more toilets in return for less seats to help with the long-lasting stigma to social distancing. No doubt we’ll see more investment in Premium Economy cabins and products too.
But if airlines sit and do nothing until the airlines are profitable, it might be too late, and the existing cabin product will no longer be fit for a passengers of the future. For airlines to win market share, there has to be evolution, and this time used as a period of learning but certainly not stagnation.
If airlines decide to invest wisely – which doesn’t have to come with a huge price tag – there will be clear winners from this period. We predict a couple of design routes to success.
Airlines willing to invest in reflecting new passenger needs
Before Coronavirus, there was a clear divide between airlines that invested in design and those that didn’t, and there was a direct correlation between design and market share. Yet right now, many airlines (even tier one carriers) and design agencies are reporting that projects are indefinitely frozen or worse still, cancelled.
With OEMs feeling the heat due to delayed or cancelled orders, new aircraft deliveries are slowing to a standstill. However the projects that they usually feed, such as new cabin designs, upgraded seating or IFE capabilities could still continue as retrofit projects to help bring their existing cabins up to standard. Making sure that current cabins reflect the needs of the next decade may not be colossal investments, but they are important nonetheless.
Which leads us to our next prediction for success post-pandemic. Aircraft and routes have been shaken up dramatically, with airlines scheduling non-standard aircraft types to mirror the capacity requirements across their network. Once prestigious routes usually to larger metropolitan areas and global capitals are now seeing smaller, leaner aircraft to match demand.
Examples of this include Qatar and Emirates who are having to place older models on London routes now, without their flagship products onboard and in some cases now without First Class products. This means savvy travellers might select competing carriers, with Oman Air and Gulf Air in some regards offering a more premium one-stop connection from Europe to Asia.
Airlines need to bring their fleets up to standard, and retrofit older cabins to match the latest ones, especially as many airlines might start considering delaying retiring older aircraft. Those with the larger fleets will struggle the most, allowing the smaller boutique carriers to thrive post pandemic who usually have small, modern, consistent fleet.
Airlines need new revenue streams
Many airlines will be looking to find new revenue streams to sure up finances, and many of these can be found as a symbiotic part of the passenger experience. Some of these we’ve already covered in our white paper, but airlines can start to monetise lounges with pay-for access while business passenger numbers might be diminished.
Subscription models such as Club Miles and Go from TAP Air Portugal allow members to generate miles without even flying as well as other benefits, with an annual payment. Ancillaries can be found by selling vacant ‘economy space’ seats to those nervous of travel in close proximity to others, and there’s media sales revenues from companies like Ink, who bring advertisers in to generate revenues through brand partnerships.
Fundamentally, design doesn’t have to be expensive and it can be revenue generating. Investing in an airline design lead who can create a consistent, premium brand image while continuing to innovate and seek out new trends and opportunities is key to increasing revenues, whether through market share, increase in ticket sales or through new cabin innovations. The design industry is there to help and it is hungry to make a difference. Right now the airline industry can’t afford to leave this powerful asset on the shelf.