Airline passengers are the fussiest consumers on the planet. We love to whinge about the food, the service, the passenger in front of us putting their seat back and delays of any kind. Forget the fact we are paying the kind of ticket prices (in real terms) our parents could only dream about.
The general perception is that passengers choose flights on price and schedule alone. Punch in the day you want to fly and the destination and choose the cheapest ticket. That is how many search engines and airline booking sites have been geared.
But it is obvious speaking to anyone when they get off a plane that there are dozens of other things that have influenced their flying experience and overall comfort, particularly in long-haul flights. This includes everything from entertainment, leg room, power outlets, wi-fi speed, cabin layout, cabin humidity and the quality of the food. The array of choice for Australians flying on popular routes, such as Sydney-Los Angeles and Melbourne-London, is dazzling but passengers and the airlines themselves have had no way of measuring and comparing this information until recently.
Consumer behaviour
That is changing and airlines such as Qantas are jumping on board as part of a broader rush by airline chiefs to embrace data as a marketing tool but also to make operational decisions based on information about consumer behaviour. Qantas has become the first Australian airline to partner with a New York-based start-up called Routehappy, which has changed the way consumers go shopping for flights in the United States.
Routehappy founder Robert Albert, who spends a huge amount of time on planes travelling between New York and Australia, compares shopping for air tickets with coffee. Ten years ago, coffee was a commodity like bananas. There was not much choice except for a straight percolated brew but now the product has been customised and people have dozens of choices when they go into a cafe.
"There is a lot of activity happening in the Australian market," Albert says in an interview. "You will start to see in the next one to 12 months there will be a lot of activity. Flight shopping will start to look richer, there will be a lot more information. It will be like shopping for other goods and services that are not commoditised where you have really good information.
"We don't want to hate air travel. It is fun to whinge about it but it is more fun to enjoy the product and rave about it. When we go grocery shopping or clothes shopping, there is a tremendous amount of choice."
Selling data
Routehappy uses a data-driven algorithm to rate flights on more than 200 airlines globally. It measures everything from the speed of on-board wi-fi to the cabin layout and best connection times, then rates them. Late last year, it signed deals with Webjet, Expedia, corporate booking tool Serko and Qantas to distribute data in Australia and is in talks with Flight Centre and Virgin Australia.
For example, its data is now available on webjet.com.au when customers book a flight. Click on a flight and a box appears ranking a flight out of 10, based on flight duration, comfort and inclusions, as well as giving a summary of the entertainment, leg room, meals and USB outlets.
It sounds confusing but the content is not intended directly for consumers. Routehappy sells the data to travel distributors such as a corporate booking tool, online travel agent or meta-search sites that can then share the content with their customers.
Routehappy's partnership with Qantas is a content-sharing deal that allows the airline to distribute its own content, which features things such as details of its amenities, cabins and lounges to its partners. Qantas has set up a microsite on its website that its trade partners, such as online travel agents, can access.
The money-spinner
Albert started the company almost by accident 15 years ago while flight hopping regularly while he was living in Asia. The original idea was a Tripadvisor-style product that relied on millions of travellers signing up to rate flights in the way travellers rate hotels. This did not work. It turned out the real money-spinner was the airlines and other distributors themselves that were hungry for the data.
"Like any good entrepeneur, you have to be adaptable and listen to what the market is saying. What we found was it only went so far. There was a limit to how much people wanted to read other people's comments. So we started going down the path of hard data. We would go and map all the planes on the planet. What every seat offers in every cabin and get that info into flight search shopping.
"As we started putting the hard data on the website, airline distributors started reacting. We then realised it is hard data that consumers want."
Albert says the trick is presenting such a huge amount of data in a simple way. Consumers are making decisions with more data at their fingertips than before and Albert says this is forcing airlines to keep innovating.
Bells and whistles
"That's great as it means forever now aviation is entering a highly differentiated phase. It is not just a seat. When you shop for a flight, you will have all these options. I think we will enjoy flying more … airlines will start putting in more bells and whistles."
"Price and scheduling will still be critical but all of us are going to say: what are the seats like, what is the price like, what is the lounge like, should I consider premium economy, does it have wi-fi? The whole world of aviation is completely changing now."
He says the airlines themselves are frustrated there is too much focus on price. Low-cost carriers changed the rules almost 20 years ago when they produced a business model and forced larger carriers to innovate. The range of fares and cabin experiences is extraordinary compared with what was on offer just 10 years ago and airlines want to be able to show that off.
For example, when US carrier Delta launched a product called Comfort class, it's advertising campaign slogan was "Worth it", which sought to address the idea that consumers were so conditioned about buying on price, why would they want to spend extra money. That approach has also worked for Qantas with its premium economy brand.
Airlines are also investing more in data analytics then ever before.
Industry leader
Qantas Loyalty owns a market research and analysis business called Red Planet that mines data from its 11.5 million frequent flyers and consumer products, such as travel money cards and its insurance program. US airlines were the first to use the data but Albert says Australia is an industry leader because customers here travel a lot due to the country's physical isolation but also because they demand higher standards.
"The distances are so great, both within Australia and other countries, that Australian flyers pay more attention to the detail of the experience. It makes a big difference on a 15-hour flight. You enjoy quite extraordinary air service. The products and services in Australia tended to be among the world's best."
michael.smith@fairfaxmedia.com.au
