Amadeus Airlines on Why Destructive Fare Wars May Finally Be Coming to an End

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Headlines are full of news about the current fare war in the United States. The accepted wisdom: customers win and airlines lose. But in reality, customers lose too, explained Luke Bujarski, Skift’s head of research, at Skift Global Forum 2017. Fare wars destroy value in the airlines, and can force airlines to take cost-cutting measures that make it impossible for airlines to deliver a decent customer experience.

All that bad news is particularly confounding now, because this should be a great time to be in the airline business. Fuel costs are low, there’s high demand among consumers, the economies in the U.S. and Europe are strong, and new markets such as China and Latin America are driving sales.

Maybe there’s something wrong with the systemic belief that airlines and customers are playing a zero-sum game. Airlines have to lose for customers to win, and vice versa.

Is there a win-win scenario in which carriers can compete on a more sustainable level? Can airlines work toward more favorable economics in terms of operating margins, while simultaneously delivering better customer experiences, care, and satisfaction?

Mike Robinson, product marketing manager at Amadeus Airlines IT, believes so. According to Robinson, “We’re on the edge of the next evolutionary leap in creating the modern day airline,” as data-driven insights drive pricing placements and promotions of customized airline flights. By using these insights, airlines can increase revenue, competitiveness, and customer satisfaction, he says.

Watch the full discussion below.

At this year’s Skift Global Forum in New York City, travel leaders from around the world gathered for two days of inspiration, information and conversation. In 2018, Skift will be analyzing travel trends around the globe with four Forums. Get the details now and register here.