Bangladesh Biman and Tourism: Convert Every Passenger To A Customer

I worked for an airline in Australia during a global economic crisis that started in 2008. Similar times are ahead due to the wars in Middle East, Europe and international trade wars. Airline and tourism are extremely vulnerable to deflationary economy and exposed to Giffen Goods effect. Travel and tourism products are not food or staples that people must buy regardless.

Last year Biman posted a net profit of Tk785 Cr and revenue of Tk11,559 Cr. It’s a 178% jump from previous year but the airline and tourism revenue shrink significantly in global or local economic downturn. And it is not just the economy, it can be a political or social unrest or even a natural disaster like Covid19 or an earthquake. There are a number of strategies that keep the airline profitable. I will discuss one here: Convert passengers to customers.

Good airline but poor business

Traditionally airline means fleet of planes, terminals and brick-mortars. That’s the problem right there. The perception is that it is an airline and that too a national airline. My boss used to ask back in those bad times in 2009-10, ‘we are a great airline but are we a good business?'. We were not. So we turned it around. We lost $400 Million in airline operations but earned $1Billion in ancillary revenue. We extensively and exhaustively used data analytics and data intelligence to achieve this.

Ancillary Revenue -- Convert passengers to customers

Airline managers typically focus on passenger KPIs -- PLF, RASK, CASK, OTP. These are important for operational excellence. But a Passenger-Experience strategy sees a passenger not just a seat in a flight, it sees a chain of products and services from passenger’s home to destination, including transport, taxi, check-in, duty-free shopping, lounge, restaurants, massage, onboard services, destination airport, duty free services at destination airport, transport, hotel and accommodations.

Sell everything, sell even rose flowers once you convert a passenger to a customer. You don’t have to produce or supply everything, just take the right partner suppliers with you.

Data Analytics and Intelligence, ‘Data before Dollar’

We need all data of the passenger and the customer experience -- from flight, cabin, routing, airline, connection, hotel, travel destination, family. All raw data are dumped into data repository and processed with Amadeus or Sabre data. Biman partners with Sabre for GDS and PSS data -- these are basically the Airline data, data of passengers, flight, ticketing. This focuses on the airline part but not the business part that I am writing about.

When we have both airline data and customer experience data, develop a single customer view that is consistent from airline, operation, flight, on-air-services, routing and competition. Most decent airlines do it this way. When you land and opt to purchase a local SIM, it’s all setup between the airline and telecom.

Loyalty, Customer Wallet Share

What are the services to offer? This is answered by data insights of customer’s wallet share. A card or bank partner will furnish you the spending of a customer spending from home to taxi to airport to duty free or lounge to upgrade to onboard services to partner services in destination.

More data leads to more insights and more opportunities. I was surprised often with how customers  experience data, gave clear insights to basic airline flights and routing. We discovered profitable segments for us to fly or just a return leg nearby a popular tourist destination or potential business class family customers.

A loyalty program does not just earn miles and redeem those miles for rewards, it gives valuable data insights to capture customer wallet share and earn more revenue, more profit. Biman Loyalty BLC has a long way to fly but it can provide the oxygen to airline operations in bad times if it is utilized strategically.

Technology and innovation in services

Technology and innovation helps implement the strategy and address the Net Promoter score (NPS) which is a key KPI for customer services of an airline. NPS and data insights will show ways to offer innovative and profitable services.

From my experiences, an app for e-check in, e-luggage tracker, self-upgrade, meal is a basic starter. Then earn more from selling value added services of Biman and its partners. By the way, self-upgrade needs special mention -- an airline seat is a perishable item. A soon as the plane takes off, the value of the seat is zero. Instant, personalized and dynamic pricing, upgrading and selling help revenue.

Cargo and Budget Air

Biman’s cargo earned Tk925 Cr last year. Data strategy and routing is likely to multifold and sustain cargo revenue. Because we are surrounded by big competitors like Air India, Indigo, Thai Air, Singapore Air, Malaysian air, FedEx, DHL, it is imperative to identify and focus on profitable routing and strategic partnership.

Also given the investment in fleet and utilization rate, it is worth operating a budget airline of Biman in certain routes, that too by data analytics and intelligence. I remember that a consulting company’s feasibility supported this idea too by considering the finances of Biman, local and international demand and competition of other low cost carriers.

Together with the strategy of our remittance diaspora to MENA, we may dig in the massive captive market of migrant workers traveling to the Middle East and Southeast Asia who prioritize low fares over luxury services.

National Strategic Advantage

Haj, RMG/BGMEA, remittance workers are our strategic advantages. Modernizing fleet and a new terminal would help but the customer experience driven by data analytics would help more. It is vital to collaborate among multiple departments such as Ministry of Religion, MoCAT, Ministry of Commerce, BIDA, BGMEA.

It is common to find opportunities from data intelligence to apply surcharges, taxes or strategic partnership or code sharing with other airlines or budget airlines for win-win operations. Bangkok is the top tourist destination but do we know how passengers fly there, the airlines, the prices, the final leg to Bangkok or connecting flight thereafter.

These data insights from Sabre and Customer Experience will potentially lead to profitable operations in Cox’s Bazar, where Biman, our tourism department and private sector will participate for profit.

In my experience of working for an airline, we saw opportunities from data analytics and stopped certain routes or but swapped with another airline for mutual benefit. Our Utilization, Turn Around Time, fuel efficiency improved. We also undercut a flight price to influence and control certain flights, airports and competitors. The local tourism gain was higher than the loss incurred by price undercut.

Psychology, Branding, Marketing

I talked about Net Promoter Score (NPS) before. In my experience with an airline, we engaged a good marketing company who provided data insights of NPS which indicated the stunning effect of public perception of a national carrier. We immediately undertook a nation-wide campaign “You’re the reason we fly’.

Marketing and consumer psychology is vital in branding and selling in any business, let alone a national carrier. This work is not straight forward though. Depending on data insights and customers experience strategy, Biman may be an icon of patriot’s Bangladesh as well as a great brand of a commercial carrier just like Thai Airways or Turkish Airlines or even Singapore Airways.

Jalal Mirza is an entrepreneur and investor based in Australia and Bangladesh, who can be reached at [email protected].