Flexibility: a relevant ancillary both for KLM and its passengers

Abstract

Analysis: KLM aims to become the most customer centric carrier in Europe. The strategy they follow to reach this goal is customer intimacy. However, the flexibility landscape of the airline is not aligned with its strategy. A reason of this flexibility approach is that as most airlines, KLM is conservative in their ticket changing approach: their policies discourage passengers from doing it. Nevertheless, literature, as well as the competitors analysis shows that a fine change strategy can create a revenue gain that overcomes the lost demand and unsold capacity. When it comes to risks is travelling, literature shows a wide range of adverse effects that can be aimed to relieve. Two of these have been identified as relevant for KLM: economical and opportunity loss. The following research indicate that the most valuable risk reliever for customer is an economical one. Also, a trends research has been carried out. This has uncovered the upcoming change in passengers behaviour which will change from doing it when “I have to” to “I want to”. Customer research: A thorough field research, both qualitative and quantitative has been carried out around KLM’s customers. This research also identified the main attributes passengers wish to have in their flexibility solution – fair, transparent, relevant and affordable. Conceptualization: A creative session was performed with the main stakeholders of the project. The outcomes of the session were a validation of the research as well as new design drivers – simplicity, effectiveness, transparency, value for money and appealing experience. Design proposal: The concept resulting from this project is a complete update of the flexibility landscape of KLM. A more robust customer journey in terms of flexibility is to be developed. An outcome of this upgrading is a broader portfolio of flexibility products, which is aligned with the personalization tactic within the customer intimate strategy of KLM. The new products introduction turns around the current view on ticket changes KLM has, by fostering win-win situations. 3 of the new products focus on the changes around departure. Fixed fares will be introduced to replace the current situation, where passengers have to pay both the change fee and the fare difference. These products will be the ahead product “Flight guarantee”, and the immediate products “Take an earlier or later flight” and “Passenger rescue”. Conclusion: A new flexibility landscape for KLM urges. Changes are sought by KLM customers and it is expected that this desire will grow in time.The solution proposed by this project seems promising. The next step to validate consists on PRM to check viability, as well as pricing a general conditions.