The psychological system which turns air-rage into air-profit

Guestlogix, a global provider of commerce teach and ancillary revenue generation to airlines, has published an academic report identifying the psychological concept of “learned helplessness” which inhibits airline passengers from enjoying their experience and negatively impacts airline revenues.

Entitled “The Empowered Passenger: Break the Cycle of Learned Helplessness to Drive Customer Satisfaction and Higher Revenues.” The author of the report, Dr. Gary Edwards, PhD, has helped executive leaders of the world’s best-known brands take a “Decision Sciences” approach to solving complex business challenges.

Discussing his report Dr. Edwards said, “Passengers respond positively or negatively, profitably or less profitably, depending on their choices. We wanted to dive deep into passenger psychology and connect it back to bottom-line decision making in the airline industry.”

The report’s main findings:

Since airline deregulation, airlines have cut back on service quality to meet the demand for lower fares, and passengers have agreed to the trade-off.

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 percent more likely to switch brands and 25 percent more likely to complain about the company. By contrast, after just one memorable experience, 19 percent of delighted customers said they purchased more products/services.

The report notes that ancillary revenue has grown from 10 percent to 33 percent 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.

“The empowered passenger has tremendous revenue potential,” said Robin Hopper, SVP Product & Marketing, Guestlogix.

“Our new report provides deep insights and actionable advice for airlines to empower their passengers, build more loyal customer relationships and increase ancillary revenues at the same time. Now is the time to fulfill the original promise of airline deregulation, so that better consumer choices are realized and airlines thrive as businesses.”

The report is available and free to download here at the Guestlogix website.

 

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