Key Points
  • The average yearly cost of flight disruptions for airlines in the US is USD 25 Billion
  • On an average, approximately 150 million people are affected by flight delays and cancellations in the US
  • To mitigate the negative impact of flight disruptions, airlines must automate re-booking, communicate with passengers, automate hotel bookings in case of flight delays, and leverage social media to keep passengers informed during difficult times
  • Intelligent, automated re-booking systems; proactive dissemination of information; fast, efficient and automatic hotel bookings; and a robust social media strategy can not only plug airline revenue leakage but also enable airlines to outperform

Flight disruptions have become a fact of life, affecting both airlines and passengers alike. There are many reasons for disruptions, like extreme weather events, congestion in airspace, technical glitches and so on.

Airlines pay a heavy price for these flight disruptions – the average yearly cost of flight disruptions in the US is USD 25 Billion. The cost for airlines in the US was pegged at USD 7.2 Billion. On an average, as many as 150 million people are affected by flight delays and cancellations in the US.

Frequent flight delays also cause a loss of brand equity for an airline. While most passengers are generally tolerant of major disruptions like extreme weather, dissatisfaction levels go up exponentially when delays occur due to routine problems and poor communication.

So what can an airline do to minimize the negative effect of such disruptions?

Automate re-booking: Due to limited automation methods to manage flight disruptions, many airlines re-book passengers manually. There are some solutions that re-book, revalidate or reissue tickets, but are not fully automated. Re-booking a single flight manually can take many hours, and is error-prone. Often, not adhering to the airline re-booking policies results in loss and revenue leakage. In addition, special passenger requests may not be passed on to the re-booked flight causing inconvenience to the passenger. Intelligent, automated re-booking systems can plug these loopholes.

Communicate with passengers: There's nothing passengers hate more than being left in the lurch, with no idea of when, and whether, their flight will take off. Communication makes it a little more bearable. A paucity of ground handling staff and the limited knowledge of outsourced ground handling procedures at the airport on alternate options or policies further complicate the communication between the airline and passenger. Airlines should invest in real-time communication, sending alerts and updates to passengers, airport staff and social media teams through SMS and e-mail. Airlines should be proactive, and not reactive, while providing information. The information should be available to passengers before they know there is a delay, not after the delay has taken place.

Automatic hotel bookings: Passengers will be less inconvenienced if they are booked into a hotel immediately when flight delays take place. Automating the process makes it fast and efficient. At the same time, airlines should ensure that their systems take into account airline rules and passenger prioritization as well as which passenger needs to be booked.

Automatic calculations: An airline's system should be able to do automatic calculations of compensation and refunds to improve customer experience.

Social media strategy: Airlines need to have a social media strategy not just for promotions and brand management, but also to keep passengers informed during difficult times.

Other factors that could help ease the pain of passengers include providing free lounge access, self-service alternatives, free air miles, tier / seat upgrades, a greater choice of alternative flights and timely refunds.

Considering the massive scale of challenges, it's obvious that only automation can enable airlines to outperform them, and help soar into a higher growth orbit.

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