Ai Editorial: Are airlines ready to “own the first and last mile”?

12^th July, 2019

Ai Editorial: Airlines need to focus on tapping the mobility as a service (MaaS) segment, offering a truly interconnected experience via their own digital assets covering all of the transportation requirements, writes Ai’s Ritesh Gupta

MaaS paves for the amalgamation of numerous modes of transport into one single mobility service, available when users want. Importantly, it results in a digital touchpoint for consumers to access various different mobility offerings.

As Voyego explains, MaaS isn’t just about integration of various modes of transport into one single mobility service, it also simplifies making a choice plus paying for it, all via a single platform.    

In a blog post this week, Voyego highlighted that MaaS “transfers the previously physical transport experience to a digital-first environment and connects with users in the environment in which they are most comfortable and most active in. This allows for a strong personal bond of passengers with their personalized mobility”.      

The potential

So what is driving excitement around the mobility offering? The travel industry has witnessing intriguing developments of late.

Is it the availability of inventory via API? Other than choice, is it the ability to come up with a relevant, contextual offer for a consumer that’s going to propel an airline as a merchant or even in running a two-sided marketplace? And as it is emerging, rewarding points for any mobility-related transaction, too, is starting to happen.

B2B travel technology company CarTrawler has accentuated on the fact that airlines “need to offer travel solutions that can exist alongside car rental – the ride-hailing market alone is estimated to reach a value of $285 billion by 2030 and the overall MaaS market will grow by 25% over the next five years”. According to CarTrawler, only 59 of the world’s 473 airlines currently offer mobility services to customers.

The Dublin-based company this week introduced its global travel mobility platform. According to CarTrawler, it allows airlines to offer a range of travel solutions in-app so that they can “own the last mile” for their customers. CarTrawler asserts that it is time for airlines to maximise revenues from MaaS market, which is estimated to reach a value of $1.75 trillion by 2030. At the time of the release of their new solution, CarTrawler’s Chief Commercial Officer, Aileen McCormack, stated, “By owning the first and last mile, airlines can maximise revenues from this rapidly growing sector and future-proof their business. At the same time, they will be able to offer customers every possible travel option, strengthening brand loyalty as a result.”

Capitalizing on high frequency for loyalty

CarTrawler shared that it is providing a market-first mobility SDK which affords customers the ability to earn and burn loyalty points as they ride.

Referring to the huge potential of loyalty marketing in mobility, loyalty specialist Currency Alliance highlighted the frequency aspect of moving around on a daily basis.

This frequency “…is much higher frequency than customers have with their supermarket – where we find customer engagement levels in the loyalty program as high as 70-80%. Higher frequency in mobility should lead to record levels of loyalty activity with the right mechanics and mix of partners,” stated the company in one of its blog postings.

In one such move, Lufthansa Innovation Hub chose to introduce a reward program for all urban mobility services as well as air, rail and bus travel between different cities in March this year. The initiative was taken considering the evolving mobility pattern shown by the digital-savvy audience and it was decided not to reward loyalty shown for only one type of transport. Collecting and redeeming points for rewards works directly via the app, which lets users collect points with different mobility providers and redeem them for rewards.

Intermediaries, too, are making steady progress. European virtual interlining (VI) specialist Kiwi.com aims at allowing a traveller to move from one point to another anywhere in the world via one transaction. The goal is to aggregate the content of all the ground carriers (buses, high-speed trains, etc.) along with domestic flight content (already have the international flights) and build an integrated transportation network.

The end-to-end journey - can one provider do it all? A session about the same is scheduled to take place at the upcoming Mega Event Asia-Pacific, to be held in Kuala Lumpur (20 – 22 August 2019).

Event site: www.MegaAPAC.com