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Airline Industry

Airlines face tricky balancing act

Oct 14, 2009

Airlines are challenged by weak revenue and volatile fuel prices, but many executives think keeping loyal customers happy is the best way to improve their business, according to a new survey.

Raising revenue and keeping customers happy is a tricky balancing act, however.

Travel-reservations-technology company Sabre said Wednesday that it surveyed 90 airlines around the world, and 86 percent said efforts to maintain and build customer loyalty were had the most positive impact on their business.

In the same survey, 58 percent said merchandising and extra revenue from sources such as fees for checking baggage would help them financially.

A study released in June by consulting firm J.D. Power and Associates found that customer satisfaction with airlines had fallen this year partly because of new fees.

Gordon Locke, a marketing vice president for Sabre, said airlines were trying to introduce fees to generate needed revenue without hurting their image.

"The airline that finds that magic balance will become a model for the rest of the industry," he said.

Locke said airline customers are less brand-loyal and quicker to switch carriers than ever before.

Sabre was the reservations-technology arm of American Airlines until it was spun off into a stand-alone company.

Airlines face tricky balancing act
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Source: AP

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