APEX Update
Airline Passenger Experience Association (APEX) CEO Joe Leader talks about how LCCs in the US are at the forefront of passenger experience innovation. APEX sees opportunities for similar innovation at LCCs in Southeast Asia, which are generally behind in areas such as providing Internet connectivity. Mr Leader also talks about the fast expanding long haul low cost sector, where passenger experience is particularly important.
Transcript
Joe LeaderOne of the areas of key expansion for both APEX and IFSA has been with low cost carriers. On a worldwide basis, they're carrying a larger and larger number of passengers and growing the overall marketplace while we're seeing it also help the health of our large scale carriers.
CAPA really ties together the perfect mix of insights and people to really see the future of the industry so that's why I'm here in addition of course as a speaker.
So far, I've really been impressed hearing the directness of some of the airline CEOs and executives in terms of telling the industry what they need. Probably the most surprising description from one of your executives was calling out the aircraft manufacturers as basically like legacy carriers on XANAX in terms of how slow they are to change. That's tough love but sometimes it gives insights. They want more of the airframer's focus and vision placed around making it easier for the low cost carrier to integrate better operations, better options more smoothly, more quickly.
I would tell you that probably some of the best insights coming from the US and beyond have been the LCCs at the top that have really focused on the passenger experience from providing connectivity like Southwest Airlines, every aircraft from the ground to the air everywhere, which has been a remarkable accomplishment to JetBlue, going where no one thought they would go, providing lie-flat seats with Mint. At APEX expo we had their CEO, Robin Hayes, speak about their massive expansion and health because of the Mint product. Then you go to flyadeal on others that are really expanding the overall market in Saudi Arabia. They focused on maximizing ancillary revenue every step of the way. In working with Con at flyadeal, I was talking with him about how it's advantageous to add passenger experience touches that increase revenue.
The one thing that every LCC in this region needs to quickly focus upon is how are they going to provide connectivity and entertainment touches if they have not done so already. There is an arms race in Asia as shown by APEX's official airline ratings, Asian passengers value connectivity and connectivity speed more than nearly any other passenger experience touch. That is an untapped area for them. For them to differentiate they need to I guess I would call it fake it till they make it. They need to put on board connectivity solutions for near-fi with entertainment on board and buy on board without internet connectivity and then look at how they can add affordable internet connectivity services to maximize their revenue and keep their customer base. Otherwise, they will be disrupted when they're a laggard in that space. That's what our numbers indicate thus far.
I would say if you're a low cost carrier it's been drilled into you, it's about cost, cost, cost and here today at CAPA Global LCC we heard Allegiant say, "We have had the creation out of our customer experience leadership team inside Allegiant and we are looking at these new areas. Instead of just focusing on cost, the question is how can we spend money to make money? How can we think outside the box and add for example connectivity in a way where we can get a return on our investment instead of just having added weight and bandwidth that customers don't want to pay for." It's a very careful question for low cost carriers to consider and they're a little bit afraid to make the wrong move. I'm seeing a few of them make the right moves and they'll be rewarded for it.
You know one of my jobs as the CEO of APEX is to make sure I experience different products so last Christmas I took my flight on a low cost carrier from Hawaii to Australia and it was a great experience. We were given food options. We were very happy on the flight. It was on a comfortable 787 and that's what I think that more of the low cost carrier long haul will do. They'll be able to offer a low cost product and you'll be able to pay for the passenger experience you want. In my case, I paid for a bulkhead seat for my family of three. In the case of others, they'd upgrade to business class, which isn't a lie-flat product, it's an angled product but it's a strong product on that carrier. We've heard World Airways here today talking about their plans with long haul 787s and 777s. We're about to see the emergence of a large number of low cost carrier long hauls and that'll be a fascinating new market in the development because you have to hit it right if you're going to be flying long.
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