15 November 2017

Africa: Airlines Urged to Embrace E-Commerce

African airlines have been urged to embrace e-commerce and digital technologies to become more profitable.

According to Eckart Reiche, the vice-president for sales at Airlines Wirecard, airlines on the continent should embrace technology to serve customer needs and experience in the increasingly competitive market. Reiche said: "Airlines have no choice but to innovate and embrace technologies that will help reduce the cost of operation and also improve customer experience."

The expert noted that, despite positive profit projections, African airlines must shift focus to the revenue and profit potential emerging from mobile commerce and other innovative technologies.

Eckart was speaking during the 49th African Airlines Association (AFRAA) general assembly in Kigali yesterday.

Under the theme, "Rethinking strategies for airline profitability in Africa" the summit attracted 400 high profile delegates from the aviation industry in Africa, Europe, the Middle East, Asia and North America to deliberate on the challenges facing aviation business on the continent. The event was hosted by RwandAir.

Noel Connolly, the global head of sales Airlines and Hospitality Cell point mobile, said airlines that embrace mobile commerce strategies and payment solutions benefit by establishing permanent internal links to currently untapped direct-channels and ancillary sales.

He added that this also helps to create a "companywide mentality that aligns more closely with their passengers' mobile-centric behaviours".

"This approach gives them a competitive advantage in terms of managing customer expectations, "he noted.

Gad Wavombo, the principle consultant at Sabre Airlines, said without a proper e-commerce strategy airlines will find it difficult to break even and make profits.

"Ultimately, an integrated e-commerce approach will allow airlines to take their marketing beyond messaging and branding," he added.

According to Mikael Gobena, the RwandAir general manager in charge of commerce, it is critical for airlines to embrace technologies that will help enhance passenger experience and also increase their market share.

"RwandAir has made it a point to prioritise customer needs and experiences by providing them quality services."

Statistics from the International Air Transport Association (IATA) indicate that African airlines suffered a loss of almost $700 million in 2015 and more than $130 million in 2016. However these losses can be reduced if airlines move fast and digitise their service to meet customer experiences.

Leveraging mobile technology

Meanwhile, the experts advised airliners to leverage the increasing mobile technology across the continent to serve customers more effectively and efficiently.

They said lack of e-commerce as a core element of corporate business, marketing and sales strategy, as well as lack of ownership for mobile commerce and mobile payments across multiple touch points were affecting profitability of airlines on the continent.

They advised airlines to always take into account traveller expectations and trends, such as ride-sharing and personalised web-based shopping.

African airlines posted a 3.6 per cent rise in traffic in September, down from 6.5 per cent in August. Equally, carriage capacity rose 0.3 per cent with load factor increasing by 2.4 percentage points to 73.8 per cent.

Globally, passenger traffic results for September show that demand as measured in revenue passenger kilometres rose by 5.7 per cent compared to the same month in 2016. This was the slowest year-on-year increase since February.

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