How to win the business traveller (download)

Finally, high speed rail is emerging as a viable and natural competitor to airlines in Europe. Living in London, it takes me at least an hour to get from my house or office to any local airport. But Kings Cross station – and with it the Eurostar and gateway to Europe via train – is a 5 minute taxi or single stop on the tube away.

One area where rail can provide some serious competition to the airlines – and where low cost carriers in particular are trying to make their mark – is by attracting corporate or business travellers. Not only are the travel times reduced by cutting out airport transfers, but rail offers wi-fi and a comfortable, easy journey suitable for business travellers.

Andreas Schulz is a Consultant of Aviation and Tourism, specialising in sales and marketing and helping the likes of Air Berlin and easyjet to improve the business model and attract more corporate travellers. He was kind enough to give us some insight, with a whitepaper provided for last years’ World Low Cost Airlines Congress. Here’s what he has to say about how to win the business traveller:

The Low Cost Airline models – really just have passed a decade, but experienced during that time breath-taking changes and variations in their divers business models, where legacies needed ages.

The current times are challenging and unstable, the economies are volatile, the markets turn mad, especially in Europe. Asia becomes the land of glory, the Americas gather momentum.
Recently, the SWISS CEO in an interview said: “I don´t regard the low cost carriers (no longer) as a threat – they reached their peak. The Gulf carriers now earn our utmost
attention!” Is this the beginning of a dramatic decline?

What was seen (not so long ago) as a dramatic conflict when shaping a business model for a low cost carrier, to ad diversity and certain complexity, such as cooperating with legacies,
loyalty schemes or GDS (Global Distribution Systems), now has become a common rule of the game in order to quest new markets and opportunities.

I still remember my time at KLM´s first low cost subsidiary, “buzz”, about 11 years ago, when I suggested to address the high yield market, approaching business travellers. At that time my idea was seen as exotic and out of realistic reach. In fact, knocking at the doors of many Travel Managers and corporates was not easy, needed a lot of personal contacts, patience and network, just to be received. But within three years we harvested the first fruits and got recognition by many sceptic travellers on duty to London (Stansted).

That what we once pioneered has turned into a new chapter how to explore new perspectives for the industry facing matured markets. The basic formule is more than simple:
(however, can´t be prayed enough) “Listen to your customer´s needs” . Our industry is permanently confronted with tight yields, paper thin margins. Rocketing fuel
prices destroy any prospects and glimpse of hope, taxes and other third party charges, like the emission trading from next year are either not contributing to a change, worth than that!
So what´s been left? Look for new customer segments and meet their needs. More and more low cost models and carriers have now become very flexible, when they identified this
(again) prospering community (see also latest IATA statistics and statements). Today, in the world of modern travel management low cost airlines have become an accepted partner (“best buy” matters!), provided they follow the rules of the game.

Service orientation matters in that demanding segment and if you diverse your concept and portfolio in that direction, you may experience a push in your yield and shift in the structure of your cliental.

Today, many low cost carriers, who have focused on that market, target an average of 20% and more on business travellers. With a by far more higher average yield as the standard fare, there´s a great chance to pamper your suffering yield. But be careful, you must be committed to it and deliver on a reliable and sustaining platform. The corporate market is demanding and loyalty is rare. You have to be present at your customer´s door, offer him a personal and direct way to communicate with you. In modern times of online and social
network arts the face to face contact still is honoured. Carriers, like easyJet, are just learning that message and integrate that approach into their strategy.

So, what’s been left at the end of the day: the business traveller is a demanding and sometimes strange species, but its worth to listen to him and understand his behaviour. If you take that up, you have a chance to explore new yield opportunities and may escape matured markets. This is just a process even the Ryanair´s of this world are reflecting about.

If you’d like a copy of Andreas’ paper you can download it here. How do you think rail operators should take this valuable advice and attract more corporate travellers to rail?

Find out more at the Rail Revenue & Customer Management Congress in Amsterdam this November.