COVID-19 will bolster digital transformation

The impact of the coronavirus outbreak on the airline industry has been severe, with estimated losses of approximately $113 billion. Demand has been substantially weakened, which has forced many carriers to put crew on unpaid leave and short time.

While the number of passengers has dropped dramatically, airlines are having to deal with a sudden spike in passenger claims and complaints with regard to cancelled and delayed flights. For example, under the EU Flight Delay Compensation Regulation (261/2004), passengers may be entitled to claim the cost of accommodation and transport associated with a flight irregularity – even when extraordinary circumstances (often referred to as force majeure) exist.

The challenge for air carriers is how to handle a high volume of claims with a reduced workforce for an indefinite period. In that respect, the automation and digitisation of the claims handling processes can help airlines to handle more claims in less time and be flexible concerning their headcount and the volume of cases to be processed on a daily basis.

Once that digital shift had been implemented, there is no reason to return to the analogue or semi-automated world if and when business returns to normal.

Automated claims handling will remain competitive differentiator

Claims handling as part of the digital customer journey will remain a competitive differentiator after the coronavirus crisis. Airlines that have already introduced automated processes – be it through a legal tech and travel vendor or an in-house solution – are ahead of the curve concerning their competing airlines when it comes to flight irregularities.

Passengers expect a seamless customer journey that covers the complete line of service – from booking to filing a claim for compensation or a refund – without communication gaps (ie, switching from an app to a hotline, back to email and so forth).

If a carrier wants to set itself apart and clearly pursue this strategy, automated claims handling will be an essential element.

Increased customer loyalty and passenger satisfaction

The reduced costs that come with automation are important and tempting, but only one reason for becoming fully automated. Using an IT solution to perform repetitive tasks rather than well-trained staff and contact centre personnel will allow additional time to deal with more critical scenarios or more demanding passengers. It will also increase the motivation of individual service agents as they will not have to attend to routine business all day long, but can focus on more sophisticated and stimulating tasks.

At the end of the day, a timely and effective claims management process is a win-win situation for passengers and airlines alike and should result in happier and thus more loyal customers.