Canadian upstart Swoop, the ULCC arm of WestJet, aims to succeed as an airline mostly by not really acting like an airline. Sure, there are airplanes and pilots and such, but President Steven Greenway is adamant that his team be a diverse group, mostly with backgrounds outside commercial aviation, “We don’t want airline people. We have gone out of our way to make sure that our staff is from digital, retailing, oil & gas.” It is a drastically different take on what an airline can be. And if he can pull it off the potential upside is massive.
Steven Greenway of @FlySwoop introducing the Swoop market proposition. “I don’t like the term ULCC. That’s just an LCC that executes that mission very well.” Very much an untapped market of price-sensitive travelers. #FTEGlobal #paxex pic.twitter.com/tiDLbrgC6p
— Seth Miller (@WandrMe) September 12, 2018
During the Future Travel Experience Global conference this week in Las Vegas Greenway highlighted the many ways in which he expects Swoop to operate differently from the rest of the North American market. His background in Asia, Europe and the Middle East gives a very different perspective on what an airline can deliver and, perhaps more importantly, what it can charge for. Yes, more fees are likely as a result. But so is a dramatic shift in how the air travel product is marketed.
Greenway wants to challenge everything. "If I can't charge an infant fee where else can I get that revenue?" If there's not a legal reason to skip it then expect @flySwoop to challenge it. Even things like infant fees are likely to be targeted. #FTEGlobal #PaxEx #LCC
— Seth Miller (@WandrMe) September 12, 2018
Going Digital, Going Mobile
Greenway’s focus is not just on finding new things to charge for so Swoop can increase ancillary revenue. He wants to completely upset the way passengers and the airline interact. The sales channel is an obvious target, but loyalty and customer service are also in his sights. Dropping a customer service call center is one step on that path; the airline launched one before Greenway arrived but he’s in the process of shutting it down. Typically such efforts simply push customers to a website for support. That’s not a significant enough change for Swoop. The company is fully committed to its mobile platform, so much that even the website will only deliver a limited feature set.
We’re going to be a digital retailer We’re going to be mobile first. We’ll maintain a website but that will only deliver 20-30% of the services. You can buy a ticket on the website. But if you want to talk to us you need the app. If you want to join the loyalty program you need the app. If you want to make changes you need the app. If you want to check in you need the app. It lets us deliver a much richer experience.
While this approach is new for the North American market it is hardly unique globally. Greenway’s history in other parts of the world allows him to apply lessons learned in those markets to a new one. There will be resistance from some customers, of course, but the airline’s job is to help educate them as it introduces the new model. Given the improved revenue that the mobile-first approach can deliver that’s a worthwhile cause.
Travel first, Airfare second
In addition to the digital, mobile plans Swoop also hopes to soon market travel based on an event or destination, not based on the flights. Greenway believes that “Rather than having the seat being sold first you might buy something else and then later that hooks in” to selling the travel. This is a massive change from the current model and holds the greatest potential to shake up the market.
We’re virtually a commodity. We have to accept that. A ticket to the show is why you’re traveling, not to fly on Swoop. We’ll facilitate that and also get you from A to B to make that happen.
Rather than start with a city pair and dates the new approach would offer seats at an event. Pick the show date and number of tickets and Swoop’s systems will backfill the flight and hotel options to complete the transaction. Consumers get a single point of contact to manage the entire trip and the airline collects a tidy sum on the associated commissions. This is similar to the vacation packages idea but more focused on the activities, not the airfare and hotel. JetBlue and Utrip announced a similar effort last year, though that still requires a traveler to start with the destination, not the activities.
Swoop is not alone on this front. Executives at Ryanair and Emirates talk of similar concepts Indeed, Michael O’Leary believes that his company’s data efforts will soon allow the airline “to know before you book when you’re going to book next. We’ll be sending you the travel package we know you want before you even think about it.”
Once the airline gets good at predicting those buying patterns the opportunity to merchandise on all the other bits of the trip becomes massive. Oh, and the flights are included, too.
But will it work?
It is still too early to tell if these efforts will succeed. The data mining tools must be refined and the marketing partnerships secured. The airlines are not ready yet which is okay, because the market probably isn’t ready either. But the change is coming, and those ignoring it will almost certainly be left behind.