Those that know me know I have admired Air New Zealand’s strategy and innovation for some time. Maybe we get a little myopic about them as the competition don’t have nearly the same profile that the airline with the koru has. And maybe Air NZ are picking the best of the overseas airlines activity e.g. Virgin America?!
Strategically Air New Zealand are:
- Defending their long haul routes (reputedly their most profitable)
- Fighting where they need to – domestically and short haul
- Enhancing engagement – through service, their use of digital, add on sales and affiliations
They are achieving these strategies by:
- Breaking the commission structure with travel agents years ago so they could embark on what they saw as the future – their online model
- Self serve check in – looks smart, gives the customer control, and saves the airline money
- Boarding pass options including email ticketing, mobile apps
- ‘You choose’ offering on short haul international flights – great propositions, gives the customer control, and saves the airline money
- Refinement of customer driven online marketing such as ‘Grab a Seat’
- Innovation with the ‘Sky Couch’ – world leading design that came through their innovation centre and involved paid actors emulating passengers travelling long haul
- Reaction to competitive threats on short haul travel – maximise profit and then make it difficult for competitors to make a decent return
- Continued service quality and PR – maybe they have things that go wrong but their PR or goodwill manage to deal with it far better than their competitors, especially Jetstar
- Partnership with others to enhance their own Airpoints rewards programme – they are using others e.g. BNZ, Loyalty, Kiwibank to help customers collect more Airpoints dollars to be used for Air New Zealand travel (or just expire)
- Extended offering that now goes past the basics such as car rental and accommodation, but also includes travel insurance, taxi hire and cruise ship bookings.
So for your business what’s the most profitable line that you need to protect, or the line that you want to make more profitable? And what efforts are you putting into that?
Similarly, how can you increase customer engagement by leveraging your product/service through digital channels, generating add-on sales, and enhancing your brand presence through other businesses?
Go 2 Market principle: breakthrough thinking will often come from your wider sphere. Be active. There’s lots to learn.