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What’s next for the LCC sector?

Low-Cost Carriers (LCCs) are known as the disruptors of the aviation industry. However, now that it is no longer enough to simply offer the lowest base-rate fare to attract passengers, what do LCCs need to do in order to stay competitive in today’s increasingly complex marketplace?

Mike Barrera, VP, Product Management, Low-Cost Carrier Segment, Sabre, spoke at the Aviation Festival Asia, held at the Suntec Singapore Convention and Exhibition Centre on June 14 and 15, telling the aviation and travel industry audience that LCCs need to differentiate themselves to remain relevant to travellers.

“The LCC market is going to be the fastest growing in the next five years,” said Barrera. “And, the high number of new LCCs that are entering the sector are dramatically changing the environment. So it’s vital carriers are able to differentiate themselves to remain competitive. They need to have the mindset and the technological support to act like an online retailer, to offer passengers what they need when they need it.”

Barrera said that traveller expectations are higher than ever before as consumers have come to expect personalization from all of their retail interactions. But despite the challenges, there are significant opportunities for those who are prepared to capture them. Many consumers would prefer to book their whole combined trip with one vendor if they are able to, representing a major opportunity for airlines with a retail mindset.

Sabre and Sabre company, Radixx have taken the opportunity during the pandemic to accelerate their technological transformation. LCCs now also need to take the time to look at their own business models and the technological support they need for success.

Barrera said LCCs need to prioritise choosing a technology partner which offers security and reliability; ensuring their chosen technology is easy to use and train, especially given staff shortages and high turnover rates in the current travel industry; and selecting best-of-breed technology that has scalability and modularity so offer management systems can interact seamlessly with order systems “At the heart of all of this innovation is data,” added Barrera.

“But data can be overwhelming. LCCs need the ability to capture data, understand it and utilise it to create very personalised offers. Individual carriers can have access to significant AI and ML infrastructures through Sabre and Radixx that simply would not be possible when acting alone. This investment in technology is the key to being able to seamlessly deliver products and services at a lower cost, to maximise revenue opportunities and enable LCCs to really differentiate themselves by creating enhanced, personalised experiences for travellers.”

(Edited by Gayatri Anand)

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