Psychology May Hold Key to Improving Passenger Experience and Airline Profitability

New study reveals how combating “learned helplessness” can lead to empowered passengers who enjoy more, spend more 

TORONTO, October 18, 2017 - Guestlogix, the global provider of airline commerce technology and a pioneer in onboard retailing and ancillary revenue generation, has published an academic report identifying the psychological concept of “learned helplessness” which inhibits airline passengers from enjoying their experience and negatively impacts airline revenues. The report provides actionable insights on how airlines can solve this problem to their benefit. 

The report is entitled “The Empowered Passenger: Break the Cycle of Learned Helplessness to Drive Customer Satisfaction and Higher Revenues.” The author of the report, Dr. Gary Edwards, PhD, has helped executive leaders of the world’s best-known brands take a Decision Sciences approach to solving complex business challenges.

“Passengers respond positively or negatively, profitably or less profitably, depending on their choices,” said Dr. Gary Edwards. “We wanted to dive deep into passenger psychology and connect it back to bottom-line decision making in the airline industry.”

Among the report’s main findings:

• Since airline deregulation, airlines have cut back on service quality to meet the demand for lower fares, and passengers have agreed to the tradeoff.
• Even as airline passengers become increasingly frustrated – and vocal – about the quality of service, they have no choice but to accept the situation, which leads to a “learned helplessness.”
• Learned helplessness has a direct impact on airline business as air travel becomes a joyless affair and passengers interpret ancillary selling as “nickel and diming.”
• One study found that after just one negative experience, customers were 20% more likely to switch brands and 25% more likely to complain about the company. By contrast, after just one memorable experience, 19% of delighted customers said they purchased more products/services.
• While carriers are under pressure to offer ever lower ticket prices, they need to recognize the substantial upside of pursuing higher customer satisfaction at each touch point, as well as satisfaction with the overall journey, typically measured in the form of Net Promoter Scores (NPS).
• Empowering passengers to specify what they want, how, and when, benefits both passengers and airlines. Mobile devices can empower passengers while giving airlines access to vast amounts of real-time data, which they can use to meet and anticipate passenger needs, leading to more revenue generation opportunities.

The report notes that ancillary revenue has grown from 10% to 33% of overall airline revenue, which means that airline business models are changing and airlines can no longer afford to accept the cycle of “learned helplessness” that inhibits ancillary selling. 

“The empowered passenger has tremendous revenue potential,” said Robin Hopper, SVP Product & Marketing, Guestlogix. “Our new report provides deep insights and actionable advice for airlines to empower their passengers, build more loyal customer relationships and increase ancillary revenues at the same time. Now is the time to fulfill the original promise of airline deregulation, so that better consumer choices are realized and airlines thrive as businesses.” 

The report is available and free to download here at the Guestlogix website. For more information about the report, or to interview Dr. Gary Edwards or Robin Hopper about its topics and findings, please contact Vanessa Horwell at vhorwell@thinkinkpr.com. 

Guestlogix, Powering a New Era in Airline Commerce

Built on the rails of the best on-the-ground e-commerce technologies that include passenger analytics and product mix optimization, data-driven sales and marketing tools and comprehensive payment functionality, the Guestlogix airline commerce platform enables airlines to increase ancillary revenue through an integrated, data-driven and customer-centric approach to onboard retail. Combining passenger-level data with an intelligent, “big data” analysis layer and integrations with airlines’ operational systems including loyalty, ERP, booking and departure control, the SaaS-based platform enables airlines to create a stress-free travel experience for their passengers. Guestlogix solutions are designed to be deployed and configured with speed, ease and minimal IT integration, to be intuitive and enjoyable to use, and to deliver results. For airlines, that means significant increases in ancillary revenues and customer loyalty. For passengers, that means having control, comfort and choice. Headquartered in Toronto with teams in Dallas, London and Hong Kong, Guestlogix serves more than 2M passengers per day, counts 30+ airlines as customers serving 144 countries, and holds 90 payment certifications. Visit www.guestlogix.com to learn more.