Airlines have non-revenue customers, which are people who get special deals by being an employee, or associated with the industry, such as Travel Agents. These customers return a reduced amount of revenue to the airline, and in some instances, return no revenue. So what can we do to increase revenue?
Once again, let’s turn to personas.
Meet Jasmine. Jasmine is a hostess with an airline. She travels around the world on long haul flights, and is pretty accustomed to being in hotels with nothing but carry on luggage.
As an airline, what do our systems need to do to ensure that she can take a flight?
- We need to find out where she wants to go
- We need to find out if a seat is available
- We need to find out when she wants to go
Now as the revenue from the customer decreases, so does our profit. So we really only have two options to make money from Jasmine flying:
- Reduce costs
- Increase fares
So let’s focus on reducing costs first.
We could create conditions on fares that reduce the amount of time Jasmine needs to interact with a person:
- She can only book online
- She can only take carry on luggage
- She can only choose flights taking off within the next day that have a load less than 60%
All of these conditions reduce the amount of effort required from the airline for Jasmine to go on a flight.
From here we need to focus on increasing fares. How can we do this? The same way low cost carriers do. And hence the idea is born:
An internal low cost carrier brand for non-revenue passengers to turn them into revenue passengers
By creating our own internal Jetstar or Air Asia X, we can then look at how those Low Cost Carriers extract revenue from their customers, all through little experiences.
For Jasmine we could say:
- If you pay cost + 10%, we could upgrade you to Business Class
- If you pay cost + 10%, we could let you select a particular seat
- If you pay cost + 10%, we could let you select flights 48 hours away rather than just 24 hours way
- If you pay cost + 10%, we could let you jump the queue to get a flight versus other customers
All of these methods allow you to extract additional revenue from that non-revenue customer, and turn them into another customer, who is satisfied by getting a better deal than the public, and is delivered awesome innovative service from the airline!