In its bid to be the world’s biggest corporate airline, Emirates, the region’s largest airline by fleet size, wants to attract more business clients. It is shifting its attention away from high-paying tourists, and instead targeting corporations for their booked business class flight tickets. (This major theme will be repeated by other airlines as well).
Emirates is offering corporate clients better value — but also is cutting prices to reach new consumer segments. It is not abandoning the leisure traveler, but simply wants to offer “an even better product” for everyone.
Obviously, this is excellent news for customers, since it means they can choose from an even better product. But it’s also great news for business — and it will drive tremendous fuel efficiency savings.
Product innovation is at the heart of the airline industry’s continued competitive advantage. It has helped it to provide services that are more technologically sophisticated, more economically efficient, and generally better than its competitors. Innovations in the technology to run air travel are being driven, at least in part, by the rise of self-service options, baggage-tracking via smart-phone, and improved overall airline inflight product. Air travel, in my opinion, is a value added service, and it is more and more indispensable for the majority of us.
For a number of years, smart transportation innovations, including inflight entertainment systems with embedded infotainment devices and the Internet of Things, have allowed airlines to offer a more integrated and user-friendly experience. The infrastructure is in place. The real change comes when airlines begin to reimagine their core products, which are now more complex and costly to deliver.
Airline efficiency and service do not typically require major structural changes, such as full out bankruptcy. Instead, they are constantly improved through improvements in technology that make the customer experience better. These are the catalysts for success for airlines, and are the obvious backbone of many of our favorite business and leisure brands.
We are seeing a steady acceleration of innovation within corporate aviation. Airbus, the owner of A380, plans to modernize its entire fleet over the next 10 years, with in-service efficiency gains of 9%. United Airlines has used its own data and experience to reshape its corporate jet product, and American Airlines has done the same. Both of these operators serve a common consumer segment that is business travelers. The newfound combination of industry efficiency and service in corporate aviation will be a game changer in the future of business travel.