The proliferation of travel booking sites like (travelocity, expedia, makemytrip, cleartrip, Yatra, etc) have reduced the airline industry to an industry competing purely on price and this is telling on the profitability of the industry.
This so happens as price is the easiest way to compare multiple airlines. That coupled with the fact that most of the ticket bookings happen on these sites provides them with too much influence over the airline carriers and sets off the negative spiral of lower and lower prices for sectors.
Result is that almost all the players in the industry are in the red.
The airlines will need to figure out a different strategy to get out of this price competition. Some things that airlines could do are:
- Stop competing on price: Delist themselves from all the travel booking sites. Sell tickets only through their own portal. Even better would be if they can create an app for the smart-phones and allow your customers to book tickets from within the app.
- Start competing on convenience or comfort. Design the entire experience with passenger convinience as the top priority; starting from how the customers book their tickets, how they are treated when they arrive at the airport, the entire check-in process, boarding, in-flight experience, post landing experience, etc.
- Start competing on speed. Design the entire processes around getting the passengers in and out of the airport as quickly as possible.
- Start competing on luxury. Pamper your customers (holiday experience) at every step of the way. Identify niche routes and start operating luxury flights (could be shared chartered flights on those routes)
- Change your customer. Instead of treating the passenger as your customer, treat them as your ware and charge for their attention (in-flight advertising or shopping or entertainment). Find out who could pay for the un-divided attention of these 150-200 people.