Airline veteran Michael Szucs confesses a love for working in emerging markets.
“Emerging markets open more opportunities,” he said at the WIT 2017 Conference in October, and clearly they feed his “pioneering spirit” which, after an early career at British Airways, has led him to stints as COO, EasyJet and CEO, Spanair, Barcelona, and the Middle East (CEO, Al Maha Airways) and South America (interim CEO, VivaColomibia).
It is this same spirit that saw Scuzs take up the role of chief executive adviser in February 2016 at Cebu Pacific Air, the largest low cost airline in the Philippines.
Noting that the Philippines is one of Asia’s fastest growing economies with a growing middle class, he said Filipinos, with higher disposable incomes, are travelling more.
Michael Szucs in conversation with WIT’s Yeoh Siew Hoon at WIT 2017
And having travelled more, they now have higher expectations of service, whether it is in the supermarket checkout (which he described as the slowest he has ever experienced) or on their travels.
Cebu Pacific, he said, is tapping this growing middle class and is strategising to meet the requirements of these “new rich” travellers.
As with most emerging economies in Southeast Asia, mobile rules in the Philippines. “Everything is mobile first,” and transactions just won’t work on desktop or laptops,” said Szucs.
Cebu Pacific mobile app for the always-on travellers
The airline’s mobile app has proved to be very popular, “superb in terms of growth”, said Szucs, due to its easy-to-use functions. Travellers can book their flights in a few steps, check in, get boarding pass, book meals, buy insurance, earn points and more.
The “real challenge is to get those without credit cards or bank accounts to do online payment”.
Social also rules in the Philippines with Szucs saying “If you’re not engaged in social media then you’ve lost lose the plot”.
The airline has 4.1 million followers on Facebook. Its 24-hour call centres, manned by 25 during the day and 10 at night, have become more like command centres, enabling staff to follow social media chatter and handle customer service and requests.
With the emergence of chatbots, Szücs believes traditional call centres could be a thing of the past.
The airline’s GetGo! loyalty programme, which is linked to lifestyle, has 2.6 million members many of whom are millennials. Travellers earn points for every peso/dollar spent or with partners like banks, and they can redeem for flights or shop at partner retail outlets.
Ancillaries form 20-25% of revenues and he said the airline would leverage on other assets like data, which he describes as the new oil.
Szücs, who is also chairman of the Value Alliance, the first pan-regional low cost alliance of eight airlines, questioned the value of traditional airline alliances and suggested the new alliance was one based on software innovation.
The Value Alliance distribution and retail platform is powered by the Manchester-based startup Air Black Box – one platform, one payment, he said.
Cebu Pacific is a founding member of the Value Alliance (Image credit: Value Alliance)
Software innovations such as these will allow airlines to extend beyond their physical capabilities and allow them to become true retailers, with their own brands.
He said it does not require the same amount of commitment as in traditional alliances. “We got to do more to make sure the platform launches across all members by year end.”
He believes in looking outside for innovation and said that “once a month we have Google and Facebook come in to brief the staff and cultivate a culture of innovation.”
Cebu Pacific had a good financial year in 2016, posting a net profit of approximately US$196 million. It recently took delivery of two brand-new aircraft – an Airbus A330 and an ATR 72-600 – to bring its current fleet to 61.
