For Airlines, How Much Is Passenger Happiness Really Worth?
From Texas Standard:
Thanksgiving is just a few days away and many would-be passengers are hoping airlines will be trying to make the holiday flying experience somewhat less unpleasant. According to a new study by the International Air Transport Association (IATA), however, it looks like happy customers don’t really make airlines any more profitable.
Marisa Garcia recently wrote about the study for the global travel publication Skift. She says that profits aren’t directly impacted by consumer happiness. "There's no direct correlate between the airlines that do so and airlines that have been profitable,” Garcia says. “That's the really tricky part because for any business, investments and pleasing the consumer have to show a return."
Part of the point of the study, Garcia says, is that pleasing the consumer on an airline flight doesn’t inspire consumer loyalty, nor do people buy tickets based on that alone. “Often they buy based on the lowest fare,” she says.
She says could could be looking at airline competition to offer the lowest prices, but it’s not a necessity for airlines to go lower.
"One of the things that's interesting to look at with those low-cost carriers is they’re really segmenting themselves,” she says. “But they argue that they are creating a lot more flyers than what they're taking away from traditional carriers. In other words, they're making it affordable for people who would never think of flying as an option before to finally take a plane wherever they're headed.”
Garcia says even among the low-cost competitors there is a focus on pleasing the consumer. “At the long-term if you just have a bunch of unhappy passengers, nobody makes any money off of that either,” she says. “But again, the IATA argument was that there are a lot of economic factors that affect whether an airline is successful or not."
Listen to the full interview in the audio player above.