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“The survey itself was meant to have a narrow focus. The goal was to formulate ideas on how to help airlines generate cash today. But now that I've had the survey up for a while and gotten some good feedback, which is now over 200 people as of Wednesday morning, I think I'll expand it into additional questions and keep it going. A lot of people have time to talk right now and it’s good to collaborate with others in the travel industry. This research is also going to factor back into the IATA Think Tank ,” says PROS VP, Principal for Travel Retail Mike Slone.
In series of social media posts from LinkedIn to Medium, PROS’ Mike Slone has been sharing an evolving survey designed to give the airline industry some degree of clarity about future demand as the prospect of a global population lockdown looms.
The survey is predicated on the skies being gradually open over the next few months. And after lockdowns, sheltering in place orders, and social distancing, there will be a pent up demand around a sizable amount of the population once the COVID-19 pandemic ebbs.
Slone serves as the VP, Principal-Travel Retail for PROS, which provides artificial intelligence-based revenue management, analytics, and distribution software for airlines. He designed the survey himself as an informal exercise to try to find ways for airlines to survive the global crisis and raise comfort among grounded travelers both anxious and hopeful about returning to the air.
The survey, introduced on Sunday March 22, begins with a simple question: Would You Help Airlines By Purchasing Discounted Flights Now?
Among the preliminary survey results based on the initial 100 respondents as of the following day:
- If airlines offered a prepaid voucher or pass that offered significant discounts on future flying, would you buy it now?
- 84% Yes
- What type of a discount would you expect to receive on a pass or voucher if you were purchasing now for future use?
- 31% want at least a 30% discount
- 40% want at least a 50% discount
- 54% expect a discount from 50- to 100%
Other findings:
- 70% would buy for personal use
- 39% think they will be flying again in the next 3 months
- 51% think they will be flying again in the next 6 months
Kambr Media: What inspired you to create the survey?
Mike Slone: I initiated it just for my own personal knowledge and research.
I was appointed to a group called the IATA Think Tank. Originally, the IATA Think Tank was working towards a vision for what the travel industry was going to look like by 2035. The members were going to make their presentations at an IATA event in Vancouver scheduled for October. The last in person meeting was in February in Abu Dhabi. Since then, we were planning to go to Tokyo and other places.
Obviously, those plans have been canceled now or postponed. We're just doing everything remotely for now.
The IATA Think Tank studied everything, from the effects of environmental degradation to concerns about “big brother” type technologies, such as user identification and location.
We didn’t want to take a doomsday approach to what 2035 travel is going to look like. Instead, the IATA Think Tank wanted to see what we could do to prepare the airlines to be in the right place when it came to the expectations of how technology would be used and valued by that 2035 date.
When the COVID-19 happened, we realized, "Okay, no one's really going to want to hear what we had to say about the future of travel," because we never dreamed that our future of travel would involve a virus that would change everything that we knew about life and the travel industry.
How did the group’s conversation change with the emergence of the pandemic?
We switched to two main focuses.
One main focus is: How do we help airlines now? How do we help airlines now to generate new or alternative revenue streams or preserve cash?
The second focus was: What do we do to help the global aviation industry rebound? How do we help airlines between now and then rebound?
What are some of the ideas you’re putting forward to help answer those questions?
Hopefully, we can stop the spread of the virus and the pain it is inflicting with social distancing, the world goes on, and we're traveling again in a certain period of time. I was already talking to quite a few people at various airlines, people in the IATA Think Tank, and I just really wanted to see what the passengers’ appetite looked like for prepaying for airline flights today.
How would prepaid flights work in this context?
To start, I'm not talking about having to pick an origin, a destination and or specific dates, because no one knows. What I really wanted to know is if airlines were offering prepaid passes or vouchers for future travel to any destination a carrier serves, would people be interested?
I wanted to get answers both from an airline perspective or from a consumer perspective.
What inspired this idea?
I worked at Vail Resorts for several years before I got involved in the airline industry. One of the products that we offered at Vail Resorts was a season pass. You could buy a season pass for, at the time, about $699 that gave you unlimited skiing or boarding. If you went to the window to buy a one-day lift ticket, it was $120. So, if you were going to ski more than six or seven days in a season, it was worth it to buy the season pass instead of daily lift tickets.
I've always had a fascination with those kinds of purchase options. The season passes at Vail Resorts were economic indicators of how well it was going to do for the next year. For each person that bought a season pass, Vail could also say, "Well, that person's going to spend X amount on food, X amount on parking, X amount of lodging, et cetera, etc. Season pass sales were a good indicator of how the business was going to perform financially, months in advance of the ski season actually starting.
In thinking back about that strategy we had as a ski resort company, and applying it to this case, when airlines need cash the most – which is right now – would consumers actually be interested in pitching in, helping them out?
And what would that look like? Would they be interested in purchasing a voucher to redeem later if there was a 10 percent discount? A 50 percent discount? A 70 percent discount?
Do people want to spend 100 bucks or is it 5,000 bucks? And so it was really just, let's learn from people and figure out what they're willing to do.
The survey itself was meant to have a narrow focus. The goal was to formulate ideas on how to help airlines generate cash today. But now that I've had the survey up for a while and gotten some good feedback, which is now over 200 people as of Wednesday morning, I think I'll expand it into additional questions and keep it going. A lot of people have time to talk right now and it’s good to collaborate with others in the travel industry. This research is also going to factor back into the IATA Think Tank.
Is the idea for pre-paid airline booking predicated on the sense that people are already looking forward to getting back to some semblance of a normal life once the health crisis ebbs?
That concept, at the highest level is, look, the skies are going to be open for business again soon. Fundamentally, people are going to appreciate giving that person a hug, or giving a high-five, or even shaking a hand. We took all of those things for granted. People may be a little bit leery about traveling across the world. But domestic and regional flights will be the first things to inspire people to want to travel.
So if the skies are going to open up again for business, why not buy discounted flight vouchers or pre-paid tickets now to redeem later?
What are the topline findings of the survey that have struck you the most?
So far, 84 percent have said that they're interested in purchasing a prepaid voucher for future flying. As you dive into that question, 31 percent say that they want at least a 30 percent discount, or they wouldn't make a purchase.
A plurality of people – roughly 40 percent of respondents – say they wanted at least a 50 percent discount. A 10 percent discount's not enough.
Even if 1 percent of all airline passengers were to say that they would spend 1,000 bucks, we're talking about billions of dollars or euros.
What else have you gleaned from the responses so far?
Another important point people made was, "Look, we're not going to prepay for flights unless it is 100 percent guaranteed that these prepaid vouchers or passes, are 100 percent refundable if the airline goes out of business.” That was really strong sentiment.
So, if the airlines do try to do offer products like this, it means that they need to assure their Customers that they will be refunded.
What’s your ultimate hope for how the airline industry will view this survey, particularly at a time when we’re still in a very uncertain stage of this global health crisis?
My goal right now is just to really look at all the various ideas that we can give the airlines. I mean, the travel industry itself has been very set in its ways for many years.
I think this is an opportunity to truly reset.
This is an opportunity to rethink things. We need to really look at all the different ideas that maybe can help airlines. There are a lot of great ideas that have already been coming out of this crisis. I hope the IATA Think Tank will serve as a platform to encourage discussion and additional innovation across all airlines and providers. PROS wants to be a part of this conversation to see where we can help the industry move forward.
What other ideas have you been hearing about?
For example, right now if you're flying, technically you should be six feet away from the nearest person. Reconfiguration of seat maps may be something airlines consider. That will have a major impact on travel. Another idea that a lot of people have said is, "Okay, look guys, don't cancel your trips, just postpone them. Don't make the airlines or hotels have to refund you right now. Let them keep the money. Just postpone it." I mean, this is something you can do.
Another cool idea for when we come out of this involves helping the people on the frontline of fighting this crisis: the healthcare professionals, police. These people are going to need some quality vacation time. For those people that have a lot of loyalty points, they could buy flights or donate points to these frontline doctors and nurses, so they can take some much needed time off.
Another idea reflects a need that airlines will have to address immediately when this crisis starts to end. There will need to start working on a system that will rate how clean or how healthy an airplane is.
There are so many entities who rate airline on-time performance metrics, which flights are delayed, whether the seats comfortable. Moving forward look, people may say, "I’m going choose to fly an airline because I know that they're the cleanest, I know that they disinfect their planes better than everyone else, and all of their flight attendants are certified healthy."
There may need to be a health rating, or a safety coalition, so that people will be able to fly airlines with greater confidence because they know the cabin environments are safer.
There are lots of innovative ideas and discussions that people have been sharing right now. And that's all I wanted out of this project: to allow people to share their best ideas for the future of air travel.
How has this crisis touched your daily job at PROS?
PROS has been around for 30 plus years now. If you look at the past 30 years, PROS, which is based in Houston, has gone through many hurricanes and natural disasters. They've gone through 9/11. They've gone through recession. The SARS outbreak.
As a company, PROS has been used to incredibly difficult moments. They're set up as a company to be able to work remotely.
PROS recently closed the PROS offices and moved to a 100 percent virtual workforce based on guidelines issued by local and federal governments. We expect this to be a temporary situation. The transition has been rather seamless as PROS infrastructure is designed to support a 100 percent virtual workforce.
PROS, since they've gone through so much before, knows how to support airlines and the travel industry. Our focus is really on, "Okay, how do we partner with airlines now, to help them?"
This survey is part of that focus. I'm trying to get knowledge that I can have, that I can share with IATA, that I can share with PROS’ customers, so they understand that we're not just trying to sell them something, that we're true partners, trying to figure out new opportunities for them. If we were trying to sell something only, I wouldn't be sharing these ideas, publicly. I would be sharing them only with PROS, which I'm not.
Since I'm in France right now, in my house, and my kids aren't in school, I've actually played, I think, 44 games of ping pong with my son in the last week, and he's 11. If I get 15 minutes between calls or meetings, I'll just take a quick ping pong break.
It's a new reality. For a lot of people like me, it's not that much different. I would like to be able to go out to eat and travel. But my opinion on all of this is that the sooner that we lock down, and the sooner that we spend, whatever it is, time to get this over with, and stop the virus, then the sooner we can actually go back to our normal lives.
