The global airline industry is facing widespread payment challenges, according to a new study by CellPoint Digital. The report, titled ‘Payments Come of Age: A Global Study of Airlines and Their Payment Technology Needs and Challenges,’ surveyed 151 airline professionals worldwide and identified critical issues hampering operational efficiency and revenue growth.
One of the most significant challenges is the limited adoption of alternative payment methods (APMs). Only 11% of the airlines surveyed currently accept modern APMs, such as open banking and account-to-account payments, which are gaining popularity in key markets like Southeast Asia. This hampers airlines’ ability to expand into new markets and meet the payment expectations of travelers.
The report also highlights the need for airlines to enhance key aspects of the passenger experience. Nearly half of the respondents (44%) identified boarding as a high priority for improvement, followed by customer support (40%) and check-in (39%). Additionally, improvements are needed in crew scheduling (28%) and in-flight operations (27%).
Different airline professionals perceive these payment challenges in varying ways. Revenue managers are particularly concerned about the lack of flexible payment options (25%) and the inability to transact in passengers’ preferred currencies (25%). The study advocates for airlines to acknowledge the insights of their payment experts and implement comprehensive payment strategies, such as Payment Orchestration, to streamline payment processes, cut costs, boost revenue, and improve the overall passenger experience.
The report also delves into the unique payment dynamics of airlines across different regions. For instance, as Latin America gains importance for global carriers, ensuring high transaction success and payment efficiency becomes crucial to tap into the market’s potential. Airlines targeting the Latin American market are increasingly adopting installment payment options to cater to the local demand for ‘Buy Now, Pay Later’ options.
Payment-related costs account for about 3% of total revenue and 78% of net profit for airlines. Optimizing payment processes is therefore essential to enhance bottom-line growth. Adopting Payment Orchestration can improve transaction success rates and reduce costs in both direct and indirect sales channels, ultimately boosting profitability.
The ‘Payments Come of Age’ report by CellPoint Digital is the first survey-based study of its kind in the airline industry. It provides valuable insights into the challenges and opportunities facing airlines in the rapidly evolving payments landscape. By embracing modern payment methods, optimizing key aspects of the passenger experience, and implementing comprehensive payment strategies, airlines can position themselves for growth and profitability in the years to come.
