23
Nov

Business lessons from Air Companies

Escrito el 23 noviembre 2007 por Antonio López de Avila en Creación de Valor, Transporte Aéreo

In recent times, when we talk about innovation in business models and strategies, we can always mention an air company example. In fact, I think Low Cost Carriers are one of the most innovative companies.

Recently, Southwest Airlines reorganized its fare classes into three categories, including a new Business Select “product”. Business Select, among other things, provides bonus loyalty program credits and a free in-flight cocktail. Southwest also added a new tier to its loyalty program to recognize its most frequent customers, who would be automatically checked in 24 hours before departure–increasing the chance of being in the first boarding group.

Gary Kelly, Southwest Airlines’ Chief Executive Officer, said last November 7th: “Today, we are announcing additional product changes that transition Southwest from a one-size-fits-all airline to the airline that fits your life. We are offering our Customers exciting improvements to their overall Southwest experience and saving them what they value most — whether it’s money, time, or both.”

Southwest went into corporations that are not utilizing its services today and asked them: ‘What is it going to take to win your business?’ It is clear. They want to catch business travellers and corporations. They want it all. And its innovations are focused on that goal.

These announcements follow other Southwest initiatives to appeal to the business travel community, including its participation in Galileo’s Apollo global distribution system and sibling Worldspan GDS.

Southwest and GDS? Am I dreaming? No, its real! So, why are people in Europe shocked for easyjet or Vueling decisions to open its business through GDS channels?

The more selling channels you have, the better? I think so. But, it’s clear that LCC have to focus on its direct selling channels more than the intermediate ones. While they keep a right balance between them, everything will be OK.

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