Airline Brands & the Pandemic

This is an excerpt from the Airline Brand COVID-19 Benchmarking Study. To access the complete study, contact [email protected].

INTERVAL 3

Airline Brands & the Pandemic Benchmarking COVID-19 Policies & Communications

Written by Mario Jobbe + Interval 3 Research [email protected] This is an excerpt from the Airline Brand COVID-19 Benchmarking Study. To access the complete study, contact [email protected].

Airline Brands: Benchmarking COVID-19 Policies & Communications 3

The Opportunity is Now Our thesis is that comprehensive COVID-19 Introduction The COVID-19 pandemic has turned the airline policies and clear, consistent industry upside down. communications indicate a brand’s preparedness, adaptability, and potential for Revenue and profitability have been success in the new normal of air travel that devastated by the coronavirus, with airlines will undoubtedly continue beyond the projected to lose $371 billion in passenger pandemic. revenue in 2020, compared to 20191. Aviation companies have quickly transformed their Objectives & Long-Term Impact operations and communications to adapt to The study’s main objective is to provide low demand, risk-averse customers, and closed transparency and insight across the airline international borders. industry to understand: • shifting customer needs But amid the chaos, history makes one thing • consistencies and differences in policy by clear: in previous periods of hardship like 9/11 airline, region, and airline alliance and the global financial crisis, the airlines that • how an airline brand’s current actions may deliberately pursued smart strategies during impact its future financial performance the turbulence leapt ahead of the competition for years after. As the COVID-19 situation is constantly changing, our approach is dynamic, and we It is in this context that we evaluate airlines and welcome feedback to improve our research their responses to COVID-19. and measurement processes.

This study focuses on two primary areas of an Please contact me at [email protected] airline brand’s response to the pandemic: its with any input. health and safety policy, and how it communicates with customers and the general public during the ongoing crisis.

1. "Industry Losses to Top $84 Billion in 2020," IATA, June 2020. INTERVAL 3 © 2020, Interval 3 LLC. All rights reserved. This study may not be copied, forwarded, or otherwise distributed without written permission from Interval 3. This is an excerpt from the Airline Brand COVID-19 Benchmarking Study. To access the complete study, contact [email protected].

Airline Brands: Benchmarking COVID-19 Policies & Communications 6

Methodology

Policy (40%) Communications (40%) Credibility (10%) Citizenship (10%)

Is the brand’s COVID-19 Does the brand Is the brand seen as credible Does the brand treat policy comprehensive and communicate its policy to operate during a employees, customers, and the community with integrity? concrete? effectively? pandemic?

• Employee safety and • Cleaning & disinfection • COVID-19 hub on web • Medical and university support • Face mask requirements site partnerships • Extended loyalty program • Social distancing • Newsroom or media • Cleaning and disinfection mileage expiration • Airport experience center with consistent brand partnerships • Helping the community via • Rebooking and updates • Medical officer or humanitarian and cancellation flexibility • Social media spokesperson on staff healthcare worker flights, • New technology and communication and • Expert advisory board food and supply donation, innovation responsiveness • Accreditation of employee volunteering, • Visual communication disinfection practices etc. • COVID-19 pages easily found via search engines

INTERVAL 3 © 2020, Interval 3 LLC. All rights reserved. This study may not be copied, forwarded, or otherwise distributed without written permission from Interval 3. This is an excerpt from the Airline Brand COVID-19 Benchmarking Study. To access the complete study, contact [email protected].

Airline Brands: Benchmarking COVID-19 Policies & Communications 8

Overall Performance Brands are listed alphabetically in each group

Leaders Above Average Below Average Laggards

Aegean Airlines Air France Aerolineas Argentinas Aeroflot Air Canada Allegiant Air Aeromexico Air China Alaska Airlines Asiana Airlines Air India Air Europa All Nippon Airways Avianca Brussels Airlines Alitalia American Airlines British Airways Ethopian Airlines Austrian Airlines Delta Cathay Pacific Frontier Airlines China Eastern Airlines Emirates China Airlines Iberia Croatia Airlines Etihad Finnair Kenya Airways Czech Airlines Hawaiian Airlines Garuda Indonesia LOT Polish Airlines EgyptAir JetBlue Airways Japan Airlines Scandinavian Airlines EVA Air KLM Korean Air Swiss International Air Lines Middle East Airlines Lufthansa Malaysia Airlines TAP Air Portugal Royal Air Maroc Qatar Airways S7 Airlines TAROM Royal Jordanian Singapore Airlines Saudia Thai Airways SriLankan Airlines Southwest Airlines Spirit Airlines Turkish Airlines Sun Country Airlines United Airlines Vietnam Airlines XiamenAir Virgin Atlantic

Leader brands have Above Average brands have Below Average brands have Laggard brands are lacking in comprehensive COVID-19 health less comprehensive COVID-19 functional communications of either concrete policy or and safety policies that are policies than Leader brands. their COVID-19 policies. They consistent communications. communicated consistently Communications are strong and lack awareness of their citizenship across channels. They bolster all brands have citizenship initiatives if they exist. their brand’s credibility and initiatives. Only a few have citizenship amid the pandemic. credibility efforts. This is an excerpt from the Airline Brand COVID-19 Benchmarking Study. To access the complete study, contact [email protected].

Key Findings - COVID-19 Policies 9

Background • Electrostatic spraying or fogging is a major Cleaning & The cleanliness and safety of an aircraft has component of North American airlines’ Disinfection become the most important air travel disinfecting policies, but isn’t purchase factor during COVID-19. communicated by airlines in other regions • Ultraviolet C (UVC) light cleaning is a Airline cleaning and disinfection policies promising technology under evaluation by explain how aircraft are cleaned and with 9% of airlines surveyed. United is using the what frequency. technology for cleaning its flight decks. • While cleanliness procedures themselves The how typically includes: disinfection of are foundational, they are not enough. high touch surfaces, whether hospital-grade Prospective travelers must trust that the disinfectant is used, electrostatic spraying or airline is following through on its stated 36% fogging, providing sanitizing wipes or commitments. of airlines make concrete sanitizer in the cabin, ventilation of the cabin, cleaning commitments and deep “nose to tail” cleaning. % of Airlines Communicating The frequency ranges from before every Concrete Cleaning Protocols flight — with some airlines cleaning select cabin areas during flights — to certain 100% 14% procedures being done daily, weekly, or of airlines use electrostatic monthly. 75% sprayers to disinfect, 61.5% 50% primarily in North America Insights 50% • Being concrete matters. Only 36% of 36.3% 28.5% 26.3% airlines surveyed were specific in their 25% cleaning policies. Airlines with concrete oneworld commitments to cleaning frequency (e.g., 0% “between every flight”) and method (e.g.,

alliance with the highest MEA “disinfecting every tray table”) with APAC Europe percentage of airlines with supporting details (e.g., “we use Sani-Cide concrete cleaning policies Latin America* EX3 to disinfect…”) educate customers North America and build trust. * Only 2 airlines in the Latin America segment INTERVAL 3 © 2020, Interval 3 LLC. All rights reserved. This study may not be copied, forwarded, or otherwise distributed without written permission from Interval 3. This is an excerpt from the Airline Brand COVID-19 Benchmarking Study. To access the complete study, contact [email protected].

Key Findings - COVID-19 Policies 14

Insights Airlines with flexible rebooking Rebooking & • 38% of airlines evaluated offered some Cancellation rebooking flexibility on tickets before June policies on new ticket purchases 30, 2020. After that date, many airlines continued to offer rebooking and 9% cancellation without change fees, while others returned to flexibility being 2% Background governed by the ticket’s fare rules 3% In March and April 2020, nearly every airline • 35% of airlines evaluated appear to be updated its rebooking and cancellation taking a month-by-month approach, 11% 38% policies to allow customers to voluntarily extending the booking flexibility window reschedule or cancel flights without one month at a time (through August 31, penalties. Call centers and customer support 2020 at the time of publishing) were overcapacity and many airlines offered • 9% of airlines are offering ongoing free eCredit or vouchers for voluntary flexibility without an end date: cancellations without needing to notify the Aeromexico (not including Basic Fares), Air airline. New Zealand, Allegiant, KLM, Southwest, 3% and Spirit 35% As the pandemic continues, some airlines are • The majority of airlines evaluated allow moving back to pre-COVID policies while passengers to change dates or cancel a others continue to offer flexibility. ticket for eCredit which may be used into Some flexibility before/thru Jun 30 2021. Some allow only one change before Flexibility thru Jul 2020 The main differentiators between airlines are: rebooking fees are charged. • For how long they allow both new and • Some airlines require ticket changes be Flexibility thru Aug 2020 existing bookings to be changed or made within a certain time period before Flexibility thru Sep 2020 cancelled without change fees departure. For example, Virgin Atlantic Flexibility thru Oct 2020 • The degree of flexibility offered: date requires 21 days notice to amend a ticket, Flexibility thru Nov 2020 changes only, or destination and/or despite offering a high degree of passenger name changes on the booking flexibility including passenger name Ongoing changes.

Key Findings - Credibility 21

Insights Airline Credibility Partnership(s) • 20% of airlines evaluated have signed Laboratory of Clinical Partnerships medical and academic partnerships, while Virology of the Medical Aegean Airlines only a handful have cleaning and School of the University of disinfectant partnerships Crete • Disinfectant partnerships are primarily with Air Canada BluDot, Cleveland Clinic U.S. airlines with the exception of Saudia Background who has partnered with Dettol All Nippon To bolster brand credibility around operating University of Tokyo • Lufthansa’s partnership with Centogene Airways safely amid the pandemic, airlines have signed provides COVID-19 testing at Frankfurt partnerships with two different types of University of Washington Airport. The testing facility tested 40,000 Alaska Airlines organizations: Medical Center travelers in its first four weeks of operation3, which is set to increase as Germany Vanderbilt University Medical 1. Medical and academic institutions American Airlines mandates testing for travelers from high-risk Center, PURELL 2. Cleaning and disinfectant brands countries. Delta Mayo Clinic, Lysol • Emirates has partnered with NEXtCARE The partnerships range from a superficial Health to offer free insurance coverage to its Emirates NEXtCARE Health association (e.g., mentioning the partner in a passengers incurring COVID-19 medical and press release or web page) to a deep Etihad Mediclinic Middle East quarantine expenses while traveling. commitment where the partner company plays • We predict that more airlines will pursue Finnish Institute for Health an active role in advising the airline’s health Finnair credibility partnerships in the coming and Welfare and safety policies or provides testing or months — some similar to those cited and insurance coverage to passengers. KLM KLM Health Services others increasingly creative and niche — to differentiate their brand and assure Lufthansa Centogene A list of surveyed airlines and their public customers it is safe to travel. partnerships is shown in the table on this page. Saudia Dettol Spirit Airlines MedAire

United Airlines Cleveland Clinic, Clorox

3. “Lufthansa’s COVID-19 Test Centre Is Testing 2,000 People Per Day," Simple Flying, July 2020. INTERVAL 3 © 2020, Interval 3 LLC. All rights reserved. This study may not be copied, forwarded, or otherwise distributed without written permission from Interval 3. This is an excerpt from the Airline Brand COVID-19 Benchmarking Study. To access the complete study, contact [email protected].

Airline Brands: Benchmarking COVID-19 Policies & Communications Table of Contents

Contents 4 Executive Summary 21 Key Findings (continued) 6 Methodology Credibility 7 Airlines Assessed 8 Overall Performance 21 Partnerships 22 Medical Staff 23 Accreditation 9 Key Findings Citizenship COVID-19 Policies 24 Employee Care 9 Cleaning & Disinfection 24 Loyalty Programs 10 Face Coverings 25 Helping the Community 11 Social Distancing 12 Airport Experience 26 Other Insights 13 HEPA Filters 14 Rebooking & Cancellation 26 Comparing the Alliances 27 COVID-19 Policy Brand Names 28 Delta: Concrete Communications Communications 29 Etihad: Tests Required to Fly 30 Lufthansa Group: Guaranteed 16 Web Site Returns 18 Media Center / Newsroom 31 Qatar Airways: Expanding 19 Visual Communications During COVID-19 20 Social Media 32 United: Betting on New Technology

33 About the Author & Interval 3

© 2020, Interval 3 LLC. All rights reserved. This study may not be copied, forwarded, or otherwise distributed without written permission from Interval 3. This is an excerpt from the Airline Brand COVID-19 Benchmarking Study. To access the complete study, contact [email protected].

Airline Brands: Benchmarking COVID-19 Policies & Communications 33

About the Author Mario Jobbe is the Founder and Principal Researcher of & Interval 3 Interval 3.

Mario had held leadership roles at NTT, Microsoft, and Next Hotels & Resorts. He co-founded Brand Karma, a customer experience analytics firm, leading its operations for 10+ years from startup to acquisition. Mario has conducted research at Northwestern University, in partnership with PhoCusWright and International Luxury Travel Market (ILTM), and on behalf of numerous travel and technology brands. He has lived and worked in the US, Europe, and Asia, and currently resides in Chicago.

Interval 3 is a research and advisory firm focused on rapidly- transforming industries.

As the world of business changes faster than ever before, Interval 3 benchmarks and consults for brands most impacted by the present-day macroeconomic shifts. From digital transformation to the profound impact of COVID-19, Interval 3 helps companies understand the present to succeed in the future. Visit interval3.com.