Aviation Is Driven By A Younger, More Diverse Demographic Now: Siddhartha Butalia, Air Asia

At a recent industry event, Siddhartha Butalia, Chief Marketing Officer, Air Asia India, shared his thoughts on a wide range of topics including delivering economic value through data, digitisation, and personalisation. He spoke on the Air Asia story of how it grew from an airline to a digital travel and lifestyle company. In his address, Butalia said that he believes that the relationship between organisations and brands has not changed fundamentally. "A lot of the trends that we have seen which were chugging along slowly therefore accentuated with the immense pace in the last year and a half. In emerging markets like ours (aviation) the unique thing which has happened is that a lot of these trends have been driven by a younger, more diverse demographic. It's again another thing which is happening slowly, but again significantly accentuated", Butalia added.

Citing an example from the aviation industry, Bhutalia shared the demographic versus the past year, the most resilient age group has been the 20-29 age group in a period where all other age groups flying fell by about 42%, the age group between 20-29% fell only by 16%. “Now, each of these demographics has very unique characteristics and it's not just that age group but at the same time, a lot of other things which are first-time travellers come in. This new demographic is bringing new data into the ecosystem and it's very important to look at how these demographics are engaging with brands and what we can do with what promises for the future", he said.

"In the last couple of years, at an individual level and at an organisation level there has been a massive impact and each of us is defined by the experiences that we've had in our lives. Those experiences tend to reshape our identities and it does the same thing to brands and organisations. But what it does is on an individual level if you look at travel, in that context, it's one of the most inspiring experiences for people that typically change the world view. For some people travel is about creating lifelong memories, while for others it's about connecting with other individuals, families and friends. We have seen a lot of increase in VFR in the past year", he further added.

Butalia stated that as the world is emerging, there is a move from discretionary expenditure moving from transactional to experiences. “We had a lot of transactional exchanges of goods which was happening, and we're moving back into the experience economy, which has been around for 20 years but that's something that has got accelerated significantly and as the experience economy comes in there's a need for a much deeper understanding of consumer journey because what you're looking for is not transactional anymore. You're looking at all the touchpoints in the consumer journey that will be able to drive loyalty, will be able to drive revenue and ultimately create a differentiated brand identity with each of those touchpoints as digitalisation or data at the back end.”

These younger, diverse experienced economy consumers, as Butalia said, exhibit certain characteristics. "They are more resilient, they are more socially aware and digitally engaged. “While the flying demographic fell by about 50% in the past year, our social media engagement went up three times. So we revamped our entire systems being invested in online reputation management metrics, we launched a new website and mobile applications. We also revamped our booking engine and systems", he added.

What are these experienced economy consumers looking for? Butalia explained that they are looking for new service offerings and said, “The speed at which these new norms have come into play has not just enabled and empowered innovation, but in all of our life, it is almost necessitated. It's critical that we relook at fundamental business models and the way in which we do business to survive in the future.”

He further mentioned that the relationship of trust between the consumer and the brand is what lowers the transaction costs in the long term, it lowers the cost of acquisition. All the intangible resources that consumers spend on gathering information time, money, the entire need for intermediaries in the ecosystem, is because there is a data arbitration. Once you have the data and the consumer trusts you with the data, then that need is gone. All of the extra resources that are being spent on these various things are handed back to the two entities which are fundamental to the trade- the consumer and the brand. What will be a differentiator in the long term is to have a sustainable strategy which is driven by data, which is built on a digital ecosystem and which ultimately is using personalisation to provide a differentiated experience to the consumer and that's where economic value is moving and that's where I believe we all need to move.” 

*The speaker was present at the e4m Digital 40 under 40 Summit