Full Transcript:
Tony D'Astolfo: Hi and welcome to Zeno Labs Live, the new live video series from travel booking and expense management providers circle where we feature subject matter experts on various topics across the corporate travel industry. I'm Tony D'Astolfo and today I'm joined by Rob Brown, Senior Director of B2B Strategy and Services Planning at Southwest Airlines. Welcome Mr. Brown, and thanks for joining us.
Rob Brown: Tony, thanks for having me. It's good to be here.
Tony D'Astolfo: Well look, we got a lot to get to today as is normally the case when you jump into the lab, we do things fast, so I'm just going to get down to business, if that's okay with you.
Rob Brown: Let's do it.
Tony D'Astolfo: All right, let's go. All right, question number one, for years Southwest did it their own way, and very successfully I might add.
Rob Brown: Yeah.
Tony D'Astolfo: Kind of flew counter to other airlines when it came to distribution and making your content available. Now some airlines seem to be moving distribution, moving to more direct distribution, you guys are modifying your approach. First, I want to make sure I got that right, and if so, why now?
Rob Brown: Yeah, that is correct, and you're right, Tony, it seems like whenever the rest of the industry zig zag.
Tony D'Astolfo: You zig, you zag.
Rob Brown: Yeah, we still like to say that we're doing it our way, so absolutely we have shifted what our channel strategy has been over the past three years, moving more away from direct and integrating more of a third party strategy. So we have been intentional about being better in the GDS, largely because for years, even though we pioneered a direct distribution strategy, as you mentioned very successfully, not only on the B2C side, but also on the B2B side, what we heard from our customers was that we needed to be better in some of the industry-standard tools like the GDS.
Rob Brown: So that is the reason why we have pivoted and have gone to what we call channel of choice, making sure that regardless of how our business travelers want to book their Southwest business travel, we're giving them a great customer experience through the channel that fits into their travel programs. So that's the reason for the change, but we have not abandoned our direct channel strategy. We're continuing to invest there, but we just needed to get better in the channels that many of our business customers were using on a day-to-day basis.
Tony D'Astolfo: Sounds good. Makes sense. Since you're making this move, any other changes on the way? I mean possible that you do interlining, join an alliance, any of that typical stuff airlines have been doing for years?
Rob Brown: Yeah, no imminent announcements there. However, I will say that certainly co-chair and aligning things of that nature is on our long term roadmap, and the higher level of participation agreements that we have signed with the GDS will certainly pave the way for those to be implemented once we decide to add that to our business strategy, we'll be able to do that more seamlessly. But we're continuing, as I mentioned, to invest in our direct channel, so I think what you'll now see is us continuing to better our GDS participation and work with our partners through those channels, but also introducing more of a self-service experience for our SWA business customers and bringing a mobile booking experience for SWA biz customers through our Southwest.com app. We're hoping to launch those releases from a booking standpoint this fall, so stay tuned for more information there, but really that's where I think the biggest next evolution for Southwest will be is through a mobile experience for our SWA biz customers.
Tony D'Astolfo: Well, I give you guys credit because you didn't take anything away to do this, right?
Rob Brown: Yes.
Tony D'Astolfo: It's a plus. It's a plus announcement, right? Oftentimes we hear from the carriers, and I don't want to name names, but you got to give to get, or there's some kind of pay to play, whatever it is. So kudos to you guys, good luck with it. We'll be keeping track.
Rob Brown: Thank you.
Tony D'Astolfo: All right, I'm going to stay on a similar vein. Let's talk a little bit about NDC and new distribution capability. You guys historically have not charged for bags, you don't charge for changes, and comparatively speaking, you still have a relatively simple fare structure, right?
Rob Brown: Yeah.
Tony D'Astolfo: So is NDC important to Southwest? And if so, how will you play? Or how are you playing?
Rob Brown: Yeah, so NDC is certainly something that we are evaluating as to how it could complement the channel strategy that we have in place today. We've had an API strategy in place for the last 11 years, but our API is built on open travel alliance specs. One of the things that we're now evaluating now that we've sort of gotten the GDS launch behind us is looking at whether or not NDC as a standard is something that is needed for not only the product and the services and the experiences that we're providing customers with today, but how it will sort of help shape what we're doing tomorrow and in the future. You're right, we today have a pretty straightforward fare structure that we offer to the marketplace.
Tony D'Astolfo: I like it. Don't apologize.
Rob Brown: And the one thing that I will say is there are no plans to change our bag fee policy, two free bags will continue to fly free on Southwest Airlines, and no changes in our change fee structure. But as we continue to evaluate how we can better provide customers with bundles and specialized fares and making sure that we're giving them targeted offers based on their needs or their preferences. I think that's where the NDC strategy will be essential to how we go forward and how we deliver that experience to the marketplace. So something we're evaluating, we don't have a timeline yet, but again, stay tuned for more information there.
Tony D'Astolfo: That's good to hear. Thank you for that. All right, now at circle, we say we serve multiple constituents in the kind of business travel ecosystem, two of which are the traveler and the travel buyer, sometimes their needs can be at odds, right? Specifically, travelers want everything to be easy, convenient, travel buyers want it to be cost-effective and controlled, right? So at Southwest what are you guys doing to help each constituent, and specifically with respect to regaining confidence to get them back on the road in the post-pandemic world?
Rob Brown: I think the biggest thing that we're doing to try to help build confidence for travelers and for buyers is ensuring that we provide a safe travel experience for them in our gate areas and in our aircraft. And we launched the Southwest promise last year in the heart of the pandemic, ensuring that we used a number of different measures to ensure not only spacing in the gate areas, but also a clean aircraft with the electrostatic sprays and the overnight cleaning from nose to tail. So a lot of those cleaning measures will still continue to take place on our aircraft. There's not as much distancing that's being done in negate areas now, but those cleaning measures will continue on our aircraft. We continue to have the HEPA air filters that allow for a continuous flow of fresh air throughout the aircraft, I think it's like every five seconds or so to ensure that that's a clean environment. So I think that's the first thing and most important thing that we're doing to build confidence with travelers and buyers.
Rob Brown: I think the next thing for travelers, you're right, they want convenience, so that's why we're looking to add a number of self-service, sort of touchless experiences, ensuring that all of the features that they need for booking check-in and servicing can be done through the app, the Southwest.com app. So we're adding more features there to provide that self, self-service experience. And then for buyers, yeah, you're right. They want low cost, they want efficiencies, and that was primary drivers behind our GDS strategy and the evolution of our channel strategy. Adding all of those conveniences, as well as adding more fare content into those channels to make sure that they have everything that they need, low cost and efficiency at their fingertips.
Tony D'Astolfo: Nicely done again. All right, speaking post-pandemic, what do you see changing? I've kind of coined this phrase the hassle factor, and the fact that it's now gone up, people are talking about digital passports, are they inevitable? What do you guys see in terms of the new normal for travel?
Rob Brown: Yeah, yeah. You know, I think I'm not sure of whether there's vaccination passports and things like that that will be developed or become standard. I think the main thing, and I know that it's a hot topic and is a polarizing subject, but I think vaccinations is the number one thing that everyone can sort of contribute to to kind of help curb spread of the virus and get everyone in this country and our industry back on track to some sort of sense of normalcy or the new normal.
Rob Brown: I think that we'll continue to work with the FAA and Centers of Disease Control to ensure that whatever guidelines and policies are put in place for airlines and all of our employees and customers to ensure safety, we'll continue to follow those measures. But I think that we'll continue to ... One of the things that I noticed that was really heightened during the pandemic was just communication and messaging, multiple touchpoints to ensure that customers had all of the information that they needed available to make a sound decision on whether the trip was safe or not.
Rob Brown: So I think that that's where I see an increase or a continued effort, at least on the side of suppliers, making sure that at every touch point, through all of our distribution channels, through our websites, through direct communication, through loyalty programs, et cetera, that we're communicating everything possible to ensure that customers feel safe about making a choice to fly or to travel for business.
Tony D'Astolfo: All right. Pop quiz on that one. Let's say for an aircraft or a crowded bar in Manhattan? Look, I'm saying they're both okay. Go out, get on a plane, go have a drink, have a drink before you get on a plane.
Rob Brown: Yeah, yeah.
Tony D'Astolfo: Something good, right? We got to get back to normal.
Rob Brown: I agree.
Tony D'Astolfo: Last question in this section, Rob. What advice do you have for travel managers that are out there today in terms of preparing the environment to get their people back?
Rob Brown: Yeah.
Tony D'Astolfo: And on the road.
Rob Brown: Yeah, the first thing that I would say is a big thank you for sustaining all of the waves of change that we have all had to manage through these past 18 months. Continue to work very closely with your suppliers and with your partners in the travel space to ensure that all of the needs and all of the waves of change you've had to implement in your travel programs are being met, or at least being addressed and discussed with all of your travel partners.
Rob Brown: We are all in this together. We want to hear from you. Your feedback is very important, and without you we can't deliver the experience that you want for your travelers and for your program. So continue to work very closely with all of your travel suppliers and all of your partners to ensure that the experience we're delivering to the marketplace will meet your needs with your travel program.
Tony D'Astolfo: So be vocal, be active, and just keep the dialogue going. All right, good advice.
Rob Brown: Absolutely.
Tony D'Astolfo: All right, we're going to switch it now. If we switch it up now, I'm going to put you into something called the Zeno Zone.
Rob Brown: Okay.
Tony D'Astolfo: So this is a little different. We're going to move away from the business side, try to get to know a little bit about Rob Brown the person, all right?
Rob Brown: Okay.
Tony D'Astolfo: If you're ready, let's start with number one. You have a very important business decision to make and you can only reach out to one person.
Rob Brown: Yeah.
Tony D'Astolfo: Who gets that call?
Rob Brown: Probably at this point, my boss, Dave Harvey.
Tony D'Astolfo: Well played. I mean, but Dave's a great guy, super smart. I love him to death. It's also well played on your part.
Rob Brown: Yeah, because just in case he watches this later, one, I'll be able to have my badge work tomorrow. But no, I think the great thing about Dave is that through his growth here at Southwest Airlines, he's got experience in a number of different areas that impact what I do on a day to day basis, whether it's network planning, whether it's his experience from technology. And because he's got such a broad experience at Southwest, he can usually give me guidance that will help me make the right decision and think through all of the steps necessary. So Dave would probably be the first person I'd go to.
Tony D'Astolfo: Sounds good. All right, Zeno's own question number two, Rob Brown, you can have three dinner guests at your table. This is anybody, any period of time, dead, alive, whoever. Who's at your table?
Rob Brown: Yeah. So being from Chicago, I'm a big Michael Jordan fan.
Tony D'Astolfo: Okay, there's great stories there, so bingo. I love that one. I love that one.
Rob Brown: So MJ. I'd go with Walter Peyton.
Tony D'Astolfo: Love it.
Rob Brown: Another one of my childhood heroes.
Tony D'Astolfo: Yes, yes.
Rob Brown: And Muhammad Ali. A lot of trash talk at that table.
Tony D'Astolfo: Oh my God, could you imagine? Could you imagine? I don't know if Peyton played golf, I don't think Ali did, but you could just imagine. "I'm the greatest of all time." Good stuff. All right, now I'm going to ... The next question is an extension of that one. Are you guys in fine dining or dive bar?
Rob Brown: Both, but I would prefer the dive bar.
Tony D'Astolfo: Well, you know Jordan is going to light up a cigar so you'd probably get kicked out of the fine dining and you're in the parking lot, but that's cool.
Rob Brown: That's right.
Tony D'Astolfo: Last question as I let you go, more of a ... Not a question actually, but give me a prediction, something you think is going to happen in our industry in the next 12 months, Rob.
Rob Brown: So I think in the next 12 months we will see more consolidation. There seemingly was a lot of consolidation on the TMC side throughout the pandemic. The one thing that I'm predicting is that there'll be some consolidation on the airline side post-pandemic.
Tony D'Astolfo: Interesting. Okay, we'll be watching for that.
Tony D'Astolfo: All right, Rob, that's it. Man, it's been a real pleasure. I want to thank you very much for doing this. I also want to thank all of you out there for joining us live today and we hope you join us again on our next installment of Zeno Labs Live. So for Rob Brown and Tony D'Astolfo signing off and let's get back to traveling everybody.
Rob Brown: Thanks, everyone. Thanks, Tony.
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