Poppi: The Airline of the Future
The biggest enemy of today’s airlines isn’t cutthroat competition or complex regulatory processes—it’s the status quo. Conventional thinking about the way we structure and operate our businesses leaves us vulnerable to the innovations of others. This is how Uber upended the taxicab industry, and how Airbnb is challenging hoteliers. Yes, barriers to entry in the airline industry are high. But the industry’s current trajectory of taking more—and giving less—to increasingly dissatisfied passengers is a perfect set-up for disruptive innovations.
But what if we could anticipate those disruptive innovations? This question inspired TEAGUE to design an airline of the future—a startup airline unencumbered by the status quo. Through this exercise of prototyping a future airline, TEAGUE sought to illuminate new ways forward for airlines operating today.
Like any startup, TEAGUE’s airline of the future—nicknamed “Poppi”—began with founding beliefs about its reason for being. These core beliefs are often missing from modern airline brands due to merger and acquisition activity that tends to dilute the original ideas of company cultures. People will pay more for a brand that believes in something, but today’s airlines don’t trade in those emotional currencies—they trade in commoditized fares and route structures. So the Poppi team developed a small set of company principles to inspire everything the airline would do. First, Poppi values “Love over Loyalty,” which is about creating an airline that passengers love in the same way they love Nike, Netflix, or Levi’s—and earning the higher margins and resistance to competitive pressures that love delivers. Conversely, “loyalty” is a myth in the airline industry, with passengers participating in the “loyalty” programs of so many airlines to be oxymoronic. Second, Poppi is organized around the ability of the airline to “Know the Journey,” a promise to understand passengers’ context across the travel experience and proactively deliver in-the-moment support based on that context. Today’s airlines generally do a poor job of transparently communicating what’s happening now and what will happen next—for proof, see passengers at a gate asking each other what rows are now boarding. Lastly, Poppi is structured as a business around the concept that “Membership matters.” Membership models are no longer the exclusive domain of bulk goods warehouses and health clubs with the emergence of member-driven models at Amazon (nearly half of all Amazon customers are Amazon Prime members) and Starbucks (the company makes 8% of its profit from interest, largely from the billions of dollars loaded onto its payment platforms), among others.
The TEAGUE team designed extensive products, services, and experiences for Poppi, treating the brand like a soon-to-launch airline as much as possible. The team also set two core objectives: enhance the passenger experience and enhance airline profitability, always connecting these objectives back to the three principles as well as the need to prototype future innovations that today’s airlines could replicate now. Among these innovations, three deserve particular attention.
No cabin luggage.
The airline industry is drunk on bag fees. These fees bolster bottom lines, but for passengers they’re a fine for doing business with an airline. And that’s not how you get to be loved. Moreover, these bag fees incentivize passengers to carry on bags they shouldn’t, cluttering gates and slowing boarding processes to a crawl. The answer to this problem is simple: no cabin luggage at all. That’s why Poppi 777 aircraft feature “fedora bins” that only hold personal items, such as computer bags and jackets. All luggage is checked with RFID-enabled tags to assure passengers that their bags are where they’re supposed to be. Poppi makes up for lost checked-bag fees through premium pricing that includes point-to-point delivery to hotels, transit lockers, parking facilities, and even car trunks. And there are other benefits: fedora bins remove approximately 1,800 kilograms from a Boeing 777 cabin architecture, which would save today’s largest operator of 777s more than $25 million in fuel savings yearly. Finally, fedora bins would increase boarding process speeds by as much as 71%.
TEAGUE’s exploration of emerging business models from Amazon and Starbucks also included the unique practices of professional sports teams and leagues. These global businesses earn significant, turnover-resistant revenue from season-ticket holders, who typically pre-pay for their tickets as much as a year in advance. On top of this interest-generating revenue, six out of the ten biggest sports leagues in the world, including the NFL and NBA (United States), Barclay’s Premier League (England) and Bundesliga (Germany), operate fan-to-fan ticket exchanges. From a revenue standpoint, this means the teams and leagues earn pre-paid revenue from season-ticket holders and then earn additional commission revenue when those fans sell their tickets to others. For consumers, this “buy-in” arrangement of pre-payment pivots them from customers to members, complete with a important sense of belonging, cementing their relationship with the brands on an emotional level. Poppi borrows extensively from these lessons in a number of ways, most notably through the operation of secondary marketplaces for everything from ticket re-sale to seat swapping and the development of branded artifacts that communicate membership in ways more akin to a lifestyle brand.
The economy middle seat needs some love. Currently, the middle seat is punishment for booking late on full flights. But it doesn’t need to be this way; the middle seat should be reconceived as valuable space for unique experiences. With this in mind, all of Poppi’s middle seats are featured as “promotional class”, a brand touch point within a brand touch point wherein other brands participate in the cabin experience by bringing something special to middle-seat passengers. The seats themselves are visually designated to represent the sponsors, and feature both exclusive in-flight experiences and after-flight takeaways. On some routes, Poppi’s promotional class could be sponsored by Beats or Microsoft. On another route, UNIQLO or Adidas. And the word “sponsor” is important here; Poppi’s promotional class is a pioneer in co-making sponsorship revenue—commanding fees from the sponsor brands. This marketplace is there if we create it.
What will it take to be an airline in the future?
Each of these provocations—and many others within the Poppi concept—point to the unique requirements of airlines in the future. First, offering products, services, and environments that are contextually aware of the traveler’s needs—knowing their journey—will require airlines to become technology companies. To put this requirement in perspective from another transportation category, Uber’s full legal name is, tellingly, “Uber Technologies.” Second, airlines will need to look and act like—and become—lifestyle brands. Love over loyalty will require airlines to add value to passenger’s lives both inside and outside the cabin. The existence of Pan Am retail stores, where consumers purchase branded artifacts from a defunct airline, show this latent interest that today’s airlines have not fully grasped. Finally, airlines of the future will need to transform their bottom lines and their relationships with passengers through membership-driven business models. These models inspire a level of brand buy-in that will help airlines climb out of the fare-as-commodity trap. And climbing out of that trap is necessary to creating a future of belief-driven brands that earn high margins for what they give passengers rather than what they take.
THIS ARTICLE WAS ORIGINALLY PUBLISHED IN AIRCRAFT INTERIORS INTERNATIONAL MAGAZINE