Whether you have just started to fly a new route, are expanding into a new region, or are trying to tap into a lucrative target audience, this is what your airline needs to know to gain a share of a new market.
Entering an away market
New routes, markets or customer segments can be unchartered territory even for well-established airlines. The decision to move into any new ‘away’ area is usually motivated by the potential to generate more revenue, but can also be a way to mitigate risk and futureproof by broadening the scope of operations. Now more than ever, new opportunities are presented by political shifts, emerging economies, global events, and of course, tourism trends.
Decision making throughout this process is complex, and requires close collaboration between your sales, network planning and revenue management functions. This will typically mean looking at lots of potential new flight routes, then building detailed business cases based on volume and revenue potential for all of them.
However, even the most carefully planned strategy still faces barriers to entry. Many airlines have such a strong ‘home’ market that it can be difficult for new players to gain a foothold in it. This is amplified on the demand side by lack of customer awareness about your brand, or loyalty to other carriers. Language issues can also be a problem, for example if your airline is a British carrier trying to break into a Chinese market, local language is a must. In these fiercely competitive times, these factors can make or break a new venture. Here’s our advice to airline decision-makers to help improve your airline’s chances of success.
Tip 1: Use data to inform decision making
Your airline will be investing a lot of time and money to determine whether a new market is viable. This means that to write bankable business plans, you need reliable and insightful data dashboards, which can help to assess route viability as well as providing data once flights commence. Data solutions can also show you where your flights are being booked, and where there are opportunities to increase your market share for future growth.
Airlines know that agencies hold a wealth of information about their customers wants and needs, but this information is often hard to access and understand. Data solutions can give you info about the type of customer you are targeting and the size of the audience. Knowing your customer, and being able to present them with the right offer at the right time drives true value and increases your chances of success in a new away market. Similarly, smart data solutions can give your airline insight onto agency behavior too, including workflow, conversion rates, win/loss analysis, and factors influencing their decision making.
A further consideration is that the capability to service Multi-Source content (MSC) is expanding, while advancements in NDC are bringing retail closer to reality within the travel industry. As such, the technology costs for agents in an ‘away’ market become increasingly competitive compared to the scenario of connecting to multiple direct connections specific airlines. In this way, using Travelport’s data solutions offers an efficient way for your airline to connect to these away agents — reducing technical support overheads while still providing them with all the efficiencies of being able to seamlessly book NDC, or alternate MSC offers.
Example data chart
QlikSense, data for illustration purposes only.
Tip 2: Make your brand stand out with branded content
Your airline will already be aware of the vital role that travel agencies and travel management companies (TMCs) play in driving revenue, by servicing the end customer and understanding their needs. The challenge most airlines face lies in communicating what their products are, plus the features that enhance the traveler journey — such as preclearance arrangements, airport lounges, airport transfers, baggage allowance, extra leg room, meals and so on. This is particularly important in away markets, where your brand is underrepresented, and where you rely on technology to get your marketing messages across. As a result, your airline will need to do more to educate agents so that they can understand and confidently sell your products and upsell ancillaries.
This is why distributing branded (or ‘Rich’) content consistently — including fares, imagery, sales messaging, upsell offers — across all platforms is so important. A picture can paint a thousand words — if you can show agents your offering directly in their system you stand a much better chance of them remembering it and feeling a connection to it when they book trips. In this way, Rich content can help to differentiate your brand, explain and showcase products and features, improve ranking and promote new routes. It can also be personalized or tailored to a specific target audience, for example, the traditionally lucrative segment of flying staff for cruise and cargo ships out of Manila.
Tip 3: Invest in digital media solutions to boost bookings
Once your airline has decided to proceed with moving into a new market this can cost millions, so getting return on your investment as quickly as possible will be your top priority. Beyond the benefits that rich content can have for your brand, spending on digital marketing is an effective way to build awareness, drive demand, and to tap into the right customer groups in your new audience.
Data-driven digital advertising campaigns can help to give your airline the best possible chance at connecting with new agencies and customers, and deliver the flights and offers they want. This means delivering the right offers for qualified agents and travelers in the right regions based on in-depth analysis of where customers are traveling from and to — and what they are willing to pay for as part of their flight ticket.
Digital media can also help to showcase your brand by communicating the unique value of your flights to travel buyers across all platforms and channels — not just on your .com site. This is useful for ensuring the visibility of new routes, even in markets where there is a dominant carrier who commands most of agents’ screen space in their searches. This helps to increase your share of the customers’ travel wallet by promoting your upsell fares and ancillaries to different travelers based on their specific needs and preferences.
In the visual age we live in you need your brand to stand out, and this is critical during any market-entry process. We hope that the tips above will help to inform your decision making, develop compelling offers, reach new customers and agencies, and contribute to your airline’s success in your chosen away market.
For more insight and advice on entering away markets, contact your Travelport account manager. You can also read more on this topic on our Air Hub.