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Keeping pace with a changing airline industry

The airline industry is in the midst of a fundamental commercial transformation. Influenced by rapidly evolving technology and high consumer expectations, airlines in 2015 more closely resemble on-line retailers than they do the industry itself in, say, 1995.

While one may argue that the previous statement displays a bit of poetic license, it is indisputable that the rapidly evolving buying behaviour and technological savviness of consumers both individually and collectively have triggered an irreversible airline merchandising revolution.

For most of its history, the passenger airline industry has been guided by a “demand-pull” business model. Although carriers advertised heavily in an attempt to win passengers and gain market share, the same model persisted: consumers demanded tickets for transportation, and the airlines obliged. All that the airline really needed to know about the passenger was the information ultimately contained in their PNR. In fact, as far as the airlines were concerned, the passenger came into existence when the PNR was created, and departed when the last leg of the reservation was flown. That model worked as long as transportation was the only product that the airlines sold. As we know, that is no longer the case.