Passenger Experience

Why Passenger Experience Matters

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Passenger Experience is important. It receives top billing at major industry conferences and is the focus of numerous industry publications. Passenger Experience is influential. It is shaping the design of future passenger terminals and has a direct link to airport profitability. Passenger Experience is perplexing. Why is it that a force from a non-involved aviation stakeholder is wielding such power in the industry? The answer lies in the serendipitous interaction of three unrelated developments of the last century.

The first major influencing factor is embedded in technological advances in the computing and social media space. The ubiquity of the internet, coupled with advances in mobile computing and the power of social media have amplified the voice of the passenger, elevating this non-traditional stakeholder to a position of power. This is perhaps best illustrated by the legendary case of David Carroll who used social media to take on a giant, and won. Although a precise dollar amount of the damages caused by Carroll remains vague, it has become unarguable that there is a direct connection between the digitized passenger’s experience and airport profits.

The second development which has elevated the importance of passenger experience is steeped in the aviation industry itself. Since the 1970’s, the effects of de-regulation and the introduction of low-cost carriers have resulted in changes to the sources of airport revenue. Prior to privatization, airports operated as quasi-government “utilities”. Much of the revenue under this model was generated from exclusive use, long-term lease arrangements between airports and carriers. With de-regulation, however, the revenue streams shifted. In the current model, airports rely on significant revenues from retail and passenger ticket fees. The nature of the relationship between passenger experience and retail profit is still being explored, however, results to date indicate that there is indeed a positive correlation between the passenger retail experience and profit.

The third contributing factor is the effect of the commoditization of air travel. The decrease in differentiation between the “in-flight” component of a passenger’s journey has largely removed price elasticity from flying. However, if we consider that the passenger journey also includes interaction in the terminal building on departures and arrivals, it follows that the terminal building itself can be used to create a differentiated, hence more price elastic, experience offering. Thus, through the design of the passenger terminal, passenger experience can again be linked to airport profitability.

It is unlikely, but the integration of three disparate world developments that have propelled passenger experience to the top of the industry’s agenda. Passenger experience is important, it is influential, and it is directly linked to current airport profits. However, the key reason passenger experience matters is that it may be the fresh perspective needed from which to approach the development of new, better and simpler paradigms for future air travel.

Sources: Overview of the aviation industry and the effects of deregulation: Airport systems: Planning, design and management.Creating value in the new experience economy: The experience economy: Work is theatre & every business a stage.

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7 thoughts on “Why Passenger Experience Matters

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