Guestlogix publishes study on learned helplessness and airline revenues

18 October, 2017

Guestlogix published (18-Oct-2017) an academic report entitled 'The Empowered Passenger: Break the Cycle of Learned Helplessness to Drive Customer Satisfaction and Higher Revenues' identifying the psychological concept of "learned helplessness" which inhibits airline passengers from enjoying their experience and negatively impacts airline revenues. Main findings include:

  • Since airline deregulation, airlines have cut back on service quality to meet the demand for lower fares, and passengers have agreed to the tradeoff;
  • Even as airline passengers become increasingly frustrated – and vocal – about the quality of service, they have no choice but to accept the situation, which leads to a "learned helplessness";
  • Learned helplessness has a direct impact on airline business as air travel becomes a joyless affair and passengers interpret ancillary selling as "nickel and diming;"
  • One study found that after just one negative experience, customers were 20% more likely to switch brands and 25% more likely to complain about the company. By contrast, after just one memorable experience, 19% of delighted customers said they purchased more products/services;
  • While carriers are under pressure to offer ever lower ticket prices, they need to recognise the substantial upside of pursuing higher customer satisfaction at each touch point, as well as satisfaction with the overall journey, typically measured in the form of Net Promoter Scores;
  • Empowering passengers to specify what they want, how and when, benefits both passengers and airlines. Mobile devices can empower passengers while giving airlines access to vast amounts of real time data, which they can use to meet and anticipate passenger needs, leading to more revenue generation opportunities.

The report notes that ancillary revenue grew from 10% to 33% of overall airline revenue, which means that airline business models are changing and airlines can no longer afford to accept the cycle of "learned helplessness" that inhibits ancillary selling. [more - original PR]