Air travel is back—but can airlines win over consumers before the ‘honeymoon phase’ ends?

Four key areas to reboot travel ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ 

TODAY'S NEWS. TOMORROW'S INSIGHTS. A daily newsletter from McKinsey & Company   Edited by Kanika Punwani   Senior Copy Editor, Southern California Travel takes off The news • Path to profitability. As travelers take to the skies, global airlines are expecting to post a much lower loss in 2022 than was estimated in 2021: $9.7 billion instead of the forecasted $42.1 billion, with profitability possible by 2023. But while customers are eager to travel and willing to pay more as a result, some airline leaders have expressed concern that demand may fade as airfares continue to rise. Carriers are highly indebted and struggling with cost pressures such as higher salaries and increasing fuel prices. [Reuters] • Why fly? Wi-Fi. While you might still have to deal with lost luggage, at least one aspect of air travel is getting better and cheaper: onboard connectivity. Some carriers are offering Wi-Fi at greatly reduced prices, while others are testing providing it for free. In response to passengers' soaring use of streaming content and online apps, airlines are rolling out major upgrades to their Wi-Fi services, including adding new hardware and improving bandwidth. That's welcome news for passengers who complain that Wi-Fi on planes is slow, spotty, and seriously expensive. [WaPo] The current upswing in air travel presents an opportunity for companies to promote a travel industry recovery while also improving their customer experience game. Our insights • Changing consumer loyalties. People are increasingly returning to air travel, with domestic and international business travel increasing by double digits between February and April 2022. But despite steady satisfaction ratings, negative sentiment among travelers is on the rise, reveal McKinsey senior partners Kevin Neher, Jules Seeley, and colleagues. Recent flight cancellations and staffing shortages could result in a wave of customer dissatisfaction, leaving loyalty up for grabs. • Flight shaming. As airline leaders look to the future, addressing sustainability concerns could become a priority. Younger customers are particularly concerned about their carbon footprint. Senior partner Tomas Nauclér and colleagues find that 32% of travelers age 18 to 24 report experiencing "flygskam," or shame of flying—and nearly 50% say that they would be willing to pay for carbon-neutral flights. See four key areas airlines can focus on to regain their footing in the latest edition of the McKinsey Quarterly Five Fifty. Navigate trends in air travel Was this forwarded to you? Sign up here. Or send us feedback — we'd love to hear from you. Follow our thinking This email contains information about McKinsey's research, insights, services, or events. By opening our emails or clicking on links, you agree to our use of cookies and web tracking technology. For more information on how we use and protect your information, please review our privacy policy. You received this email because you subscribed to the On Point newsletter. Manage subscriptions | Unsubscribe Copyright © 2022 | McKinsey & Company, 3 World Trade Center, 175 Greenwich Street, New York, NY 10007