Cutting Costs Without Cutting Corners: Best Practices for Airlines

In the face of unprecedented inflation and labor shortages, there’s one question on every air travel brand’s mind right now—how can airlines cut costs without jeopardizing their customer experiences?

Current labor shortages, stemming from COVID-19, have particularly impacted the travel and hospitality sectors. More than 1.7 million workers in these industries changed careers in light of the pandemic’s travel restrictions, creating a skilled labor gap as travel brands try to regain their footing in the U.S. economy. Meanwhile, customer satisfaction with airlines reached an all-time low in 2022.

Today’s airlines simply must do more with less—they must use their available workers efficiently to maintain customer satisfaction in a competitive market. They must also optimize their costs to return to pre-pandemic profitability.

Let’s break down six ways that airlines can do just that—cut costs without cutting corners, and get back in the black without sacrificing customer satisfaction.

In this article, find helpful, actionable tips to deliver quality experiences to travelers without breaking the bank:

• Send automated updates and alerts

• Enable 2-way messaging for self-service support

• Deploy flexible technologies that reduce or eliminate the need for an app

• Send personalized offers based on customer data

• Acquire and analyze customer feedback

• Team up with other businesses

#1 Send automated updates and alerts

By July 2022, flight cancellations had already surpassed previous annual records. As a result, consumer complaints against airlines rose more than 300% above pre-pandemic levels last year. 

Labor shortages are only one logistical challenge fuelling flight cancellations, but limited worker availability also restricts customer service functions when itineraries change on a dime. In response, airlines should consider implementing one-way SMS updates—an automation strategy that keeps clients up to date on their travel plans without sacrificing customer service representatives’ valuable time. 

Automated mobile messaging has the potential to significantly streamline customer service efforts because it allows consumers to digitally connect with a travel desk. Mobile messages from the airline to customers' phones can help them manage functions like:

• Sending boarding passes or flight information

• Updating customers about weather or emergency delays

• Reminding customers about critical day-of travel information, like:

• The documents they’ll need to pass through the security checkpoint

• Weight limits for checked bags

• Their seat number, boarding time, or connecting flight statuses 

And data in a recent report shows that customers are more than tolerant of chat updates—they actually prefer chat over speaking on the phone. 87% of consumers—spanning across Gen X, Millennials, and Gen Z—want to use mobile messaging as their primary means of communication with travel companies.

#2 Enable 2-way messaging for self-service support

If you’re interested in taking mobile messaging capabilities one step further, consider leveraging two-way SMS for enhanced customer self-service functions to communicate issues to customers as they happen. A flight delay is frustrating, but being stuck on hold for two hours to reschedule is even more aggravating.

Your airline can use two-way SMS to help customers:

• Answer travel FAQs

• Book in-flight upgrades, purchase Wi-Fi, or pay for meals in advance

• Change seats or add an extra checked bag

• Make other travel reservations for car rentals or lodging

Research shows that offering this level of automated functionality can increase customers’ brand loyalty—and a loyal customer is more likely to return to your airline the next time they fly. And, like one-way SMS, two-way SMS can reduce your reliance on live customer service agents, which are in short supply in today’s labor market. 

#3 Deploy flexible technologies that reduce or eliminate the need for an app

If your airline has ever considered building an app for customers—or if you have one already—you know that the costs associated with mobile apps can add up fast: 

• Design, programming, and development costs

• Costs of ongoing maintenance and upgrades

• The cost of marketing the app to optimize implementation

Instead of asking your new customers to install yet another branded app, why not communicate with them on a familiar platform that they’re already using?

With mobile messaging through SMS, Apple Messages, or WhatsApp, you can easily connect customers with live agents or automated self-service tools, giving them convenient support access without the need for a dedicated app. 

#4 Send personalized offers based on customer data

If your airline is keeping a close eye on the balance sheet in 2023, don’t just focus on cost-cutting—consider new ways to generate revenue and create personalized opportunities for each customer:

• Survey your customers—what do they actually want from your airline? Whether they want better in-flight food options, more flexible seating, or a more valuable loyalty program, find out what they’re willing to pay for. 

• Once you know what your customers are willing to pay extra for, you can build new systems and offer new services, packages, or bundles that you can sell. 

• Spread the word about your new services using personalized messaging. Better yet, use your customer data to personalize your messages further. For instance, if you revamp your traveler rewards system, reach out to customers who showed interest in the program with a personalized message like, “Hi Greg! You said you wanted a better customer loyalty program, and we listened. Check out our new and improved program, [Program Name]. Learn more, and sign up before your next trip on [Reservation Date].”

#5 Acquire and analyze customer feedback

Speaking of gathering data, customer feedback is some of the most powerful information your company can leverage for cost-cutting and service improvement. 

You can use a client survey to gain insights like: 

• Which experiences your airline could streamline or improve

• The services clients are getting from other airlines that yours is missing

• How customers want to use their loyalty rewards

• The kinds of customer support channels your frequent flyers are most likely to use

Armed with information from your specific consumer base, you can make decisions about where to cut costs, where to allocate more funds, and which services your clients want to see. 

#6 Team up with other businesses

Partnering with another brand has two potential benefits for your airline’s bottom line:

1. By offering conveniently bundled value-added services (like easy car rental or hotel reservation when customers book a ticket), you and your partner brands can boost sales.

2. When you partner with another company, you open the door to pool your resources—human, technological, financial, or material—to cut costs and optimize spending.

But you can think bigger than booking transactions or travel accommodations. For instance, Delta and Starbucks announced a unique partnership in 2022 for SkyMiles and Starbucks Rewards members—every dollar spent at Starbucks earns one mile, and any Starbucks purchases on travel day are rewarded with double miles. This kind of partnership could increase customer loyalty for both brands, helping them secure new revenue and marketing opportunities.

Leverage chat commerce to cut costs and increase customer satisfaction

How can airlines cut costs without sacrificing customer satisfaction? For both cost-cutting and revenue-boosting, consider implementing mobile messaging—the communication channel that 87% of consumers prefer for getting in touch with travel brands.

Clickatell offers an all-in-one chat commerce platform that makes it easier than ever for airlines and other travel and hospitality brands to reach their customers, enhance satisfaction, and build brand loyalty. Whether you’re looking to automate customer service or implement payment links, Clickatell can help you turn mobile messaging into a sales channel that converts. 

Reach out to us for a tailored chat commerce solution that can grow your business.