Mobile, social fuel aviation biz boom

Mobile, social fuel aviation biz boom

Author | Ankur Singh | Monday, Oct 06,2014 7:52 AM

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Mobile, social fuel aviation biz boom

With ‘mobile’ and ‘social’ dominating marketing activities, the aviation industry seems to be the biggest beneficiary of the trend.

The frequent price wars between the airlines have pushed up bookings by 300 per cent in September itself. Carriers such as Jet Airways, Indigo, and Spicejet slash their fares substantially in order to woo the travellers for a period of 90 days and above in advance. And, the biggest drivers of these seasonal sales are mobiles and the social networks.

The mechanics

Typically, 30 per cent of all airline seats go unsold in India. According to an Absolutdata Research & Analytics industry research, the objective behind flash sales for the airlines industry is to utilise unsold seats by selling them at lower price points. Discounts of this nature help airlines prevent seats from ‘perishing’ once the travel date comes around. Besides, all incremental revenue goes through to the bottom line as costs are already fixed.

Flash sales are pushed through heavy promotions on digital space including online and mobile. Traditional print and other media are also very important though it has replaced traditional promotional channels of phone and travel agents.

Suhale Kapoor, Executive Vice President, Absolutdata Research & Analytics, said, “Mobile connectivity plays a large role in enabling flash sales to be effective. All industries are exploring new ways of marketing to drive sales. Today two major trends sweeping India are growth of mobile phone usage, and growth of social media fueled by access through online and mobile mediums.”

New media push

Social media definitely plays an important role through networking/ word of mouth and creating direct relationship (point of contact) between the airline companies, travel sites and customers, he added.

An example of successful social media campaigns was by AirAsia promoting their RM1 fare flights across Asia. Prior to the launch of their ‘Mind Blowing Fare’ campaign, the company posted teasers on its Facebook and Twitter channels informing fans of their upcoming launch and encouraging them to spread the word. These teaser videos went viral in no time, doubling their fan base and pumping sales.

“In today’s online business world, approximately 62 per cent of customers use social media for either registering complaints or giving feedback on a particular product or a service. Social media’s advantage lies in the fact that it allows organisations to act upon such feedback swiftly and take corrective measures, Kapoor pointed out.

“A notable example of this aspect can be gauged basis what Air France KLM did in 2010. Due to a volcanic eruption, flights were cancelled and thousands of stranded passengers turned to social media for help. KLM was there, armed with the same channels to "respond more quickly to customer inquiries, re-direct them to other means of travel, and protect the KLM brand image.” It was the perfect example of a crisis averted through social media. This also triggered a fundamental change in the way the brand handled customer service through social media, and now one can interact with an agent and book travel via Facebook,” he said.

Sector-specific?

The sectors which are directly benefitted by airline flash sales are the travel industry including hotels, restaurants, travel e-commerce, advertising industry and media (including print, television and digital).

E-commerce portals like Flipkart, Jabong, Myntra offer weekend flash sales almost every week to get rid of inventory which otherwise will go unsold.

IT and telecom industry often have flash sales to sell old inventory or stock new product units and simultaneously create buzz around them. The most recent and effective example of this is flash sales done by Xiaomi MI3 on Flipkart. It created huge noise for the brand.

The dynamics of the hotel industry sector resemble that of the airline industry as rooms are also perishable and hotels can drive revenue and occupancy through differential timed pricing.

Future forward

“Flash sales are here to stay. In the past, flash sales were typically a desperate attempt to drive revenue without too much planning. But today, they are structured using advanced analytics to determine optimum pricing models across the airline industry as well across other sectors. The key is to manage differential pricing to boost overall utilisation and revenue while still reducing process for certain seats, selectively. A smart consumer will surely gain, as will the airline,” said Kapoor.

And, “social media provide avenues for integrated marketing campaigns, visibility to influencers and bloggers, increase face time through Facebook, Twitter etc as people spend more time on these media compared to traditional media – TV, allowing avenues for real time feedback (both positive and negative) and suggestions,” he added.
 

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