September 1, 2020
Few industries have been hit harder by the COVID-19 fallout as the airline industry. With business travel all but dried up, several countries restricting flights from the U.S. and many consumers opting for road trips for their leisure travel, airlines are looking for ways to entice people to take to the skies once again.
It has been a grim 2020 for the industry. According to the Bureau of Transportation Statistics (BTS), U.S. airlines carried 8.4 million systemwide (domestic and international) scheduled service passengers in May 2020, unadjusted, a sharp decline of 89.6% from May 2019. BTS also reported that it is withholding the seasonally-adjusted numbers due to the unprecedented decline in air traffic. As a result of this harsh reality, airlines are initiating a host of new measures they hope will result in more travelers in their cabins. Here is a look at some of these efforts.
Remember those annoying (and costly) flight change fees? They could become a thing of the past as an industry leader is nixing that practice. United Airlines Holdings, Inc. (Tii:UAL) announced on August 30 that it will no longer hit consumers with a $200 fee to change domestic flights, with their largest competitors quickly following suit just one day later. While Southwest Airlines Co. (Tii:LUV) already had this policy in play, most airlines charge between $75 and $200 to change one domestic flight for another.
In an effort to alleviate coronavirus worries, Alaska Air Group (Tii:ALK) is making it easier for guests to travel touch-free by creating more convenience and less contact among guests and employees during travel. Travelers can pre-order meals, print bag tags without having to touch check-in kiosks, and opt for an emailed receipt for baggage instead of a printed receipt. In fact, every airline is adopting some form of new cleaning and sterilization processes and blocking out seats to practice social distancing to ease passenger concerns.
In that same vein, American Airlines Group Inc. (Tii:AAL) announced in August it was adding the electrostatic spraying solution SurfaceWise2 – the first-ever long-lasting product to help fight the spread of the novel coronavirus that is approved by the U.S. Environmental Protection Agency (EPA) – to its cleaning and safety program. Other airlines are also extolling their respective efforts underway to ensure safe air travel during a pandemic, including Delta Air Lines, Inc. (Tii:DAL), which offers sanitizer stations near boarding doors and lavatories on every aircraft, touchless faucets, flush levers and waste lids in certain planes. Delta also sanitizes surfaces before boarding using electrostatic sprayers.
In addition to new safety measures such as blocking out middle seats for social distancing, JetBlue Airways Corporation (Tii:JBLU) is adapting to the COVID-19 slowdown by offering MarcusPay, installment plans for customers booking flights as well as vacation packages. This is accomplished through a partnership with Marcus by Goldman Sachs (which offers no-fee, fixed-rate personal loans, high-yield online savings accounts). JetBlue claims this initiative effectively makes it easier for travelers to pay off their trips over time. MarcusPay can be used for trips from $750 to $10,000 and customers can see their loan options within minutes.
While not an incentive per se, Spirit Airlines Inc. (Tii:SAVE) may well end up scoring points with socially aware consumers through its efforts to give back to the community and inspire positive change. The company announced in August that it pledged $250,000 worth of airline travel to nine organizations across the country that advocate for social justice and civil rights. The organizations include chapters of the National Urban League, Black Chamber of Commerce, NAACP, among others.
Though only time will tell if these efforts will result in more passengers, it illustrates that even large corporations must adapt to shifts in consumer behavior and look for new ways to connect with consumers – especially during challenging times.