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| AIRLINES |
| innovation
drivers: |
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| An ever present problem with the airline business is that the core product, the flight from A to B is largely a commodity. All airlines fly similar planes that take the same time to cover the distance and tickets also cost roughly the same across economy and business class. Such price matching between most airlines implies the need to attract target business class customers in different ways. Moving people from economy to business class and premium economy is the name of the game. Within an increasingly competitive and security conscious market and with increased fuel prices, margins are cut to the bone. In the absence of any really major technology breakthroughs, the main drivers of consumer-focused innovation for major airlines continue to be service, price, punctuality and alliance membership. Singapore Airlines, RyanAir, British Airways and the Star Alliance have respectively been strong in these areas. The key challenges for established national carriers and the largely low-cost and business class focused start-ups alike have been to create and deliver sustainable, profitable combinations that attract and retain one or more of the three primary customer groups – business travellers, city-to-city economy and mass-market / low-cost. As the volume of those flying in each of these customer groups continues to rise steadily, innovation around service has been gaining increasing priority. Comfort and entertainment as well as the quality, or lack of, in-flight food have all become priorities as airlines strive to maximise volume and load factors. Another innovation driver in the sector is reducing the much discussed carbon footprint. While some airlines have started to offset their emissions, few have yet to make a break-though. The exception to this seems to again be Virgin Atlantic which in 2008, in partnership with GE and Boeing, was the first airline to fly a plane running partially on bio-fuels. And its founder, Richard Branson, is donating all his profits over the next 10 years into renewable technologies research and has also set up a $25m prize for the first person who can remove 1billion tonnes of greenhouse gases from the atmosphere. |
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