Airline Seat Innovation

Skycouch

1. Opportunity Identification

Key Air New Zealand Markets

2. Concept Generation

IDEO & Air New Zealand Partnership

IDEO & Air New Zealand's Product Development Process for Airline Seating

Segmentation

Immersion

• 9 months learning the culture and priorities of Air New Zealand through:
• Traveling
• Interviewing
• Acting as a crew member
• 5 core values identified:
• More control - Give the customer as much control over their experience as possible
• More variety - Offer a variety of configurations
• Greater choice - Not only give travelers control, but give them a good variety of options to choose from
• More New Zealand-ness - As the first and last thing most visitors to New Zealand see, Air New Zealand is a key part of the tourism experience as well as an important identity for all kiwis
• Genuine service - You can have great seats and something that looks good on paper, but the service has to be good and very genuine - ties with the kiwi identity

Brainstorming

• Ideas generated through brainstorming with mixed product teams (engineers, flight crews, marketers)
• Over 30 concepts introduced including
• Bunk-bed seating
• Vertical seating
• Alternate cabin configurations
• Staggered seating (British Airways)

3. Concept Evaluation

• Use of New Zealand boat builders to create paper and computer concept mockups
• Use of New Zealand boat builders to create furniture and layout mockups
• Use of actors signing a non-disclosure agreement to keep ideas secret but test for genuine reactions
• During these trial screenings, some ideas were tested up to 6 hours at a time
• Trials revealed that many paper concepts (vertical seating, bunk beds) were not viable in practice

4. Development

"A new, superior product that takes up no more space than the old product and costs the traveler the same amount for a seat"

New seating layouts provide for all traveler types identified in the concept generation stage

5. Launch

Marcus Lowther

George Washington University

Product Management Project

Mason and Jason--characters introduced through a series of YouTube ads

• Strategic Launch decisions
• Permanent full product line replacement
• Enhance image as an innovator and promoter of New Zealand
• Tactical launch decisions
• Regional launch began in January 2010
• Introduced the concept with Albion, an ad agency
• Used a mix of print, internet, and social media advertising
• Celebrity endorsers (Hasselhof, models were used)
• Launch to Europe and North America service began in January 2011

Critiques

"As an aspirational brand, Air New Zealand should next time look at creating a seamless customer journey that gets people talking about the positive brand experience rather than a money-off promotion."

6. Results

• Product has largely been successful
• 2.8% revenue growth from 2011 to 2012
• 33% increase in shareholder profitability
• Experiencing difficulty licensing concept internationally due to the high price desired
• Switching to Joint ad agency as of October 2012