The handling of passenger claims has been an Achilles Heel in the airline industry for many years, even before the coronavirus hit the whole sector in an unprecedented fashion.
During the pandemic, the pain increases: carriers around the world have been forced to put crews on unpaid leave or on short time.
Many airlines have dismissed staff on a large scale and consolidation is inevitably going to come.
At the same time, carriers have had to cope with a huge back-log of passenger complaints stemming from a sudden spike in requests for refunds and claims for compensation of cancelled flights, while the number of passengers and therefore revenues dropped dramatically with fleets grounded due to the lockdown.
Simultaneously, passengers’ patience is being tested as processing times for the handling of claims are often ridiculously slow, whereas claim agencies are teeing up for mass litigation, which may add to the burden when the industry tries to recover and economy rebounds.
A Catch 22 for the airline industry?
Now that airlines gradually resume their operations and services they are facing a real dilemma: how to continue to keep costs low and the service level up with a reduced work-force?
Furthermore, how to handle more claims in less time and drive cost transformation?
And, most importantly: how to regain customer loyalty in challenging times with the volume of claims at their all-time high?
Automation and digitization are key
As in many other areas of our lives and the business world, automation and digitization seem to be the obvious answer. It provides for the necessary flexibility concerning an airline’s headcount and the volume of cases to be processed daily.
With the introduction of fully automated claim handling platforms, carriers could even leapfrog their current state of affairs as many airlines have neglected that part of the digital customer journey for years and are stuck with Excel spreadsheets or clunky customer relationship management systems which have no future.
Nowadays, passengers rightfully expect a seamless digital customer journey which covers the complete cycle of an airline’s service portfolio.
This robust demand will survive the pandemic as next-gen passengers will be unforgiving when being confronted with communication gaps, such as having to switch from an app to a hotline, back to email or even have to print out a form to file a claim for something as simple as a justified refund.
In less than ten years, digital natives will make up for nearly half of the adult population. They grow up using artificial intelligence and chatbots, understand the so-called Internet Of Things and clearly demand that these technologies are available throughout their travel experience.
Seamless, omnichannel, real-time interactions will be key to capture their attention and to meet their standards.
Those carriers that do not embrace change and the introduction of automated claims handling systems will fall behind. On the other hand, airlines that discern the sign of the times will benefit from a competitive advantage and can stay ahead of the curve when it comes to flight irregularities and the timely handling of the same.
Digital transformation is part and parcel for customer loyalty
Complaint handling embodies the acid test of an airline’s customer orientation and is the critical stage to regain customer loyalty.
With the ongoing drive towards digitization, which is bolstered through the COVID-19 crisis, airlines have a unique chance to change the game, to reduce cost and to use the claim experience as a passenger loyalty anchor.
By doing so, the negative connotation for passengers (and airlines) of filing a claim could be mitigated, and a claim could become a customer touchpoint.
Instead of simply paying out compensation, airlines could try to turn the tide when interacting with the passengers and demonstrate what sets their product and customer service apart from their competitors.
Claims are not a delight at all for airlines. But they reflect the chance to offer new shopping experiences, for example through upselling and ancillary services.
Cost reduction with improved customer care
The cost reduction that comes with automation is important and tempting. But only one aspect and good cause for getting fully automated.
To avoid repetitive tasks to be handled by well-trained staff or contact center personnel but by an IT solution instead will free up additional time to get the head around more critical scenarios and more demanding passengers.
It will also increase the motivation of the individual service agent as he or she will not have to attend to routine business all day long but can focus on more sophisticated and more stimulating tasks.
At the end of the day, timely and effective claims handling is a win-win situation for passengers and airlines alike which should inevitably result in more loyal customers.
It can mean an advantage for everyone – the booming business of claim agents probably being outside of that equation.