Few are those who have failed to notice that a battle has been unfolding above our heads in the last few years. The price war between airlines has been intense and has redrawn the map of the airline market in many ways. While the customers’ travel costs have drastically gone down, the reality of the airlines has been of a slightly harsher character. The LINK met up with Eivind Roald, Executive Vice President and Chief Commercial Officer of Scandinavian Airlines to find out what kind of travel industry we can expect in the future.
“In three to five years from now, the right price, new aircraft, wifi onboard, lounges, fast-track will be a commodity - everyone will have it,” Roald tells The LINK.
Due to the ever-decreasing flight prices, what used to be an exotic investment for globetrotters and business travellers has turned into a standard purchase. Travel, as such, has turned into a standard product, which means that to stand out, you have to offer something out of the ordinary. Roald argues that for a legacy airline like SAS, whose USP is not low price, this means that they need to provide an entire travel experience, not just a flight ticket.
“What I think you will see much more of is a seamless type of travel solution. It’s about you buying a ticket to Stockholm and when you have bought that ticket, we take care of everything from calling you when you have to wake up, to having a taxi or an Uber drive you to the airport. So the ticket you buy will take you all the way from from A to B,” Roald explains.
For the industry as a whole, the new business landscape opens up for various kinds of innovation. Roald explains that creating any disruptive product or service is a rather unlikely scenario. Instead, the development in the airline industry will come about through continuous, incremental innovation, incorporating new technology as it is introduced to the market. He believes that to be a market leader, adapting to this innovation in neighbouring sectors is key. As an example, he mentions the sharing economy and how it can affect airline travel.
“We will see a change in sales channels and we can expect more alternatives in the future. For example, you will probably be able to book your Airbnb stay with a flight ticket bundled with it. Likewise, we had an offer last year where everyone who booked a ticket to California was offered a free week with a rental car from Avis,” he says.
For Scandinavian Airlines, the last years have revolved around rethinking their business model in order to adapt to these changes. For Roald, SAS’s new positioning and mission is clear. By focusing on their core customers, the frequent flyers, and provide end-to-end services in order to make their journey as smooth as possible, they will maintain their role as the go-to choice for Scandinavian travellers.
“I hope that when we ask our customers in five years from now ‘Why do you fly with SAS?’, that I will get the answer ‘I really don’t know but it is so much better’. That is the intangible feeling we are aiming for,” Roald concludes.