Innovate or Die!

What’s the difference working for a leisure airline over working for the parent company?

If I compare it to Austrian Airlines, where I worked before joining SunExpress, I see that the questions we have to answer are very different. Austrian Airlines is a network carrier that brings people from all over the world to one place and then distributes them to other places. To fill a long haul plane, you need to have markets working in many different countries around the world. At SunExpress we do a lot more point to point travel. As long as the markets in Germany, Turkey or the UK for example are working, that route is going to work. We have a lot less complexity and that translates into a much less complex business model, which makes the entry hurdle into the market a lot lower. This means you have more competition, so you have to move faster.

And, is that the case with SunExpress?

Yes, SunExpress is the fastest airline I know off and have worked with. Let me give you an example to support that. The minimum amount of time we need to organize a profitable flight to a completely new destination is three weeks. In previous airlines I have worked for, it was twelve months.

How come you can do this so quickly?

Three things: technology, mindset and dynamic markets. When it gets to technology, you need to have the right amount of data available the moment you are to make a decision. When we talk about mindset, you need to be able to take risks and have a culture that allows you to sometimes fail. And lastly, you need to have fast moving markets and work in a market that is also dynamic.

Can you give an example?

In Germany the ministers of education of all the German states have set the summer holiday dates in stone until I believe the summer of 2030. That means we now know which state goes on holiday for the coming eight years. Compare that to Turkey where the dates of the summer holidays are usually announced four to six weeks prior to the start of the summer holidays. So, the booking behavior in Turkey is very different to Germany. When I am saying we just need a few weeks to open up a new destination, I am not talking about a very settled long term planning market. In the UK for example people tend to book their holiday 24 months in advance. If we have a flight to Beirut, many people there don’t know what they will be doing next month and if they still have money. So, they’d rather book a ticket two weeks in advance. Like I said, technology, mindset, market.

So, SunExpress is a tech savvy company with the right mentality?

Yes, we are certainly tech savvy and somewhat of a different kind of airline. At SunExpress we collect the data of the passenger and not only the passenger, but the person we have interacted with. We collect the data with every interaction and we really try to customize the customer journey from this piece of data through persona’s, digital prints and other methods. In the heart of our commercial IT there is Salesforce with a marketing-, sales- and service cloud attached. It is a very lean approach with a heavy focus on the customer base in the middle.

Why is SunExpress able to do it differently as opposed to other airlines?

Because we are a midsized airline, we have a relevant size to be attractive for technology partners. To give you an example, we were the first airline worldwide to be bookable on Amazon’s Alexa. We are big enough for partners to have the appetite to work with us and we were small enough to just say: let's give it a try. So, in the Alex example: We put some money and resources towards it and gave it a shot and to be honest, it was not a pleasant experience.

Why?

Booking a flight on Amazon is just too complicated. Not because of the technology, but because of all the answers you need to give before you can actually book your flight. There are just too many questions you need to answer like what time you want to fly, do you want a window or aisle seat etc. You really don’t want to do that. But I think we can test this because our organization is curious and we have a trial and error culture. Outside of operations of course, because our pilots, maintenance etc don’t have a trial and error culture. In the commercial area we just try things out and sometimes they are useless and sometimes they are great.

Are bigger airlines taking note?

They would never admit to it, but yes.

Do you have an example where this is happening?

It is nice to be copied, because that means we are doing something right. At the same time if I copy others, I would always say I saw this at such and such an airline and we just decided to take it to the next level. To give you an example, at Frankfurt football club, you have to download into your Apple wallet a form of payment which entitles you to get to the express cashier to, for example, get your food faster. You hold your mobile phone in front of you and you talk to someone on the other end to verify it is you. This inspired me to have a video chat functionality in our app to make it even easier to book a ticket. You can just video call an agent now and book a flight. And you can even do it while you are e.g. sitting in a train, but still you don’t have to type in all your data manually or interact with a chatbot. It is a real person… When we started it, we allocated one colleague in our service center to handle these calls. We just wanted to do this for a few days to see what would happen. Now, this is one of our most successful features. I am actually still waiting for other airlines to copy this, which I think will be a good thing, because standardization of implementing new technologies will in the end benefit the travelers. We really need to become more people centric in this business.

What will the role of a budget carrier be in the near future?

Travel is going to change, because the main commercials of travel will change. The big costs that airlines are facing is kerosine and an increase of taxes and fees. I think the time of ultra-cheap tickets is over and will be gone forever. So the new definition of a budget carrier will be the right price for the right travel purpose. Next to that I think it is important for all airlines to find other revenue sources to enrich the customer proposition and to get us out of the volatility of the business. We need to make sure that the margins we earn, still cover the cost increases that we will be facing over the next few years.

Where are these new revenue streams coming from?

At SunExpress we have something that we call BOB: Boosting Our Business. We start with what we call BOB 1, which comes down to boosting additional services in our flights, like blocking the middle seat next to you, booking the extra leg space seats etc. Then we get to BOB 2 where we look at enlarging our partnerships. We for example have a large partnership with a retail store in Germany which allows you, on your way back from a holiday trip, to order food that then will be delivered to your doorstep. And with BOB 3 we look at ways to enrich your experience with us beyond travel. We are a leisure airline, so we are only in people’s minds once or twice a year. We are now looking at ways to be in people’s minds the whole year. So why don’t we offer discounts to people who are looking for nice Turkish restaurants in Germany for example? SunExpress is a German Turkish brand, so we combine both values. Basically BOB 3 and has nothing to do with flying. Maybe we start selling socks, because we are so cool and we start selling fashion. Who knows.

What else will happen with the airline business when tickets are getting more expensive and with rising inflation?

We have seen many airlines come and go and I don’t think that process is going to change. The airlines that have a strategy, a market, the right mindset and technology are here to stay. If you look at the business models of other airlines, you see a change and they are not focusing only on flying passengers from A to B anymore. The whole market will change and the value that we create as a mobility platform, covering huge distances, bringing people together and giving people experiences that they can’t experience at home, might as well be received as true value.

How do you manage the audience that chooses a budget carrier?

We try to do things differently to improve the experience. We are experimenting with sending our travelers a customized video where you get told by a person what steps you need to take before the flight takes off. With seasoned travelers we customize the message. We can for example see that a person always had window seats in the previous six flights. We can now send this person a customized video, letting him or her know that the window seats are filling up pretty fast on the next booked flight, so be quick if you again want a window seat. We create tailored communication solutions now in the form that that particular person needs it.

Are you doing this just to create some noise around the brand?

Yes, partially to create some noise, but it is also the mentality of our brand. And we do this to find ways to overcome operational challenges.

How hard is it to have the same mentality in a brand when it’s half German and half Turkish?

It is challenging and rewarding. To give you an example, work life balance is a hot topic in Western Europe and this goes as far as saying that we don’t want to be emailed after working hours or called on holidays. When I started in my current position at SunExpress I was very vocal about the whole work life balance thing. Until a Turkish colleague pulled me aside and asked me why I was always emphasizing this. He said that people in Turkey realize they have the wrong job when it is draining your energy. Work and private life are intertwined, he told me. So if someone from the private sphere calls you while you are at work, it’s fine to take the time to have a conversation with them. Sometimes you work a few hours on Sunday and you take your time to meet a friend on Monday. It is more diffuse and a completely different approach. I really find it rewarding and enriching.

Do you still need an airport to run a budget carrier? What would you change?

I have met so many people that either love to fly and be in the air or people that want to travel from A to B. I have never met anyone who loved to be in an airport. If I had unlimited funds and all legislation aside I would create a parking lot somewhere in the rural area where people just park their car, check in their bags and board a bus to a plane. The bus then takes them to one of the airports nearby, wherever there is space on a plane, but already in the bus to the plane we do the security check and the duty free business. And then the bus parks in front of the plane, people get off and directly board. In places like London, the Ruhr Area, where you have several airports in closer distance, this should work. Another thing: What I foresee in the future is that people in smaller groups will take an electronic aircraft to go to one point, decided by a mathematical algorithm, where they will meet up and get their connecting flight to an overseas destination in a plane burning conventional fuel, or SAF when it is available. At this moment in time there is not yet a battery that will support long haul flights, but this I see as a valid theory for the future of mobility.

Curious to know more? Let’s have a coffee. You can call or email Vanessa Flink at +31 6 5375 7830 or v.flink@edenspiekermann.com