GCC airlines should transform their distribution business models and how they sell to customers, according to a recent study by management consultancy Strategy &, part of the PwC network.
Three trends are reshaping the GCC’s travel sector and threaten to weaken the connection between airlines and their customers like shifting customer behavior on retail and business sides, changing dynamics within direct and indirect sales channels and the rise of digital technologies.
If GCC airlines are to take advantage of changes in the travel distribution industry, while preventing digital technologies from turning their airplane seats into commodities, they will need to overhaul their ticket distribution strategy.
Commenting on these trends, Alessandro Borgogna, (pictured) a partner at Strategy& in Dubai leading the aviation, travel and aerospace practice, said: “The challenge in the Middle East is the rapid adoption of mobile, with online channels now being the fastest growing source for travel planning.”
He added that “fast-growing GCC airlines have an opportunity to adapt to changing consumer behavior if they adopt a distribution strategy that is enabled by technology and partner with travel players and content providers, tailor their travel distribution model by market segment, and build internal digital capabilities to collect, analyze and use customer data.
Wider retail behaviour varies significantly across geographies, but four themes prevail globally. First, customers are increasingly using online channels for search and booking. Second, customers are using multiple devices during the research and booking process. One online travel website, for example, has a feature that allows passengers to connect across multiple devices, allowing them to hop from tablet, to laptop, to telephone, and so have a seamless digital experience. By contrast, airlines generally lag behind in catering to this customer preference.
Third, social media is growing in popularity for sharing first-hand experiences in the travel decision-making process. In emerging markets, social networking is especially popular
