Industry Comment


On the tray


Making it easy for the airline customer and finding a solution - Rob Britton throws in his thoughts and commentary on airline innovation in a tough climate. Email: rob.britton@airlearn.net


In the previous columns, I’ve introduced myself and offered some thoughts on differentiation and commodity in the airline industry, essentially arguing


that service tends to move toward commodity in open, fully competitive markets. But that doesn’t mean that innovation is impossible in Europe, North America, and some parts of Asia – indeed, one could make the case that fresh thinking and new approaches are needed even more in those places. On this page, I’d like to take off on that theme


of innovation, and offer some views on the airline industry’s receptivity to new ideas. Let’s start with something that many suppliers know – and honest airline people will admit: they often seem cool to new things, and at worst they fold their arms and scowl. Understanding five reasons for lack of receptivity may well be the first element in making a sale. First, remember that it’s not a single industry,


but many, varying by home country and market; at the extremes these industries are open and competitive, vs. closed and non-competitive (but the latter are usually very profitable). For example, successful carriers in East Asia can thank restrictive bilateral aviation agreements for large shares of their profits. I’m not being critical, just acknowledging something seldom mentioned. By contrast, the EU domestic market, Canada, and the U.S. are all brawling places. A second, and related, reason for resistance is


that many airlines in those competitive markets, especially older carriers, have lost vast sums since 2000. For example, American Airlines has lost US$11 billion over the past decade, a staggering sum of money. Third, in the wake of these losses, employees


feel beaten down. Aviation has long been a positive business (what could be better than getting people together?), but year after year of red ink takes a significant toll on morale and open-mindedness.


52 www.onboardhospitality.com


And it leads to a fourth reason for reluctance to


look at new stuff: management teams at nearly all older carriers have been reduced by 25% to 40% in a decade. At some airlines, even with interest and adequate budget, no one has time to prudently analyze opportunities. It’s like triage on


“Aviation has long been a positive business (what could be better than getting people together?) but year after year of red ink takes a significant toll on morale and open-mindedness”


the battlefield: medics attend the worst wounded first, and may not get to the rest. Moreover, because of the many peculiarities of the airline business, many tasks cannot be outsourced to third parties. Lastly, airline buyers are often leery of innovation because implementing change –


The airline industry must remain receptive to new ideas


especially hardware and other tangibles that go on board – often requires sorting bewildering and often ambiguous operational rules that governments worldwide impose. It’s not a happy situation, but determined suppliers should not throw up their hands. Here are my four pieces of advice: 1. Be patient. My father was a salesman, and that was his first counsel. 2. Make it easy for the airline customer; when possible, take on the work that he or she would have to do. 3. Help them understand what “the competition” is doing, without threat; but always remember the point above about market differences – Wizz Air is not Singapore. 4. Offer risk-free trial; find a way to experiment. There’s no better way to show buyers that your solution works.


Email your comments to: rob.britton@airlearn.net


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