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Strategies to optimize auth rates for the airlines

  • 07 Dec 2023

  • 08:30 AM GMT

Why Do Airlines Have the Highest Cart Abandonment Rate?

Why Do Airlines Have the Highest Cart Abandonment Rate?

According to Statista, the airline industry has one of the highest cart abandonment rates across industries at 90% as of 2022. Sadly, this is not something to be proud of.

A cart abandonment rate of 90% means 9 out of every 10 customers who start their buying journey don't end up making the purchase. This is a major concern for airline companies as cart abandonment directly impacts revenue.

But how do we know what's causing cart abandonment and how to deal with it? Well, this blog is there to help. Below, we'll discuss the average cart abandonment rates across industries, common reasons behind cart abandonment in the airline industry, and possible solutions. So, read in full.

Average Cart Abandonment Rates Across Industries

Cart abandonment rate is the percentage of customers/shoppers who added items to their online cart but abandoned it before making the payment. In the case of the airline industry, the cart abandonment rate is the percentage of customers who started their buying journey but could not make the final purchase.

Sadly, cart abandonment is a problem every business, regardless of their domain, has to face. Here's the average cart abandonment rate for multiple industries as of 2022:

Industry

Cart Abandonment Rate

Airline

90%

Luxury

87.93%

Fashion

87.79%

Automotive

85.97%

Baby & Child

84.86%

Travel

82%

Car Rental

82%

Hotel

80%

Retail 

71.24%

Consumer Electronics

50.03%



Reasons for the Cart Abandonment:

Reasons For The Cart Abandonment

1. Complex and Lengthy Checkout Process

The checkout process is quite long when it comes to booking air tickets. For instance, customers have to log in, enter passport details and contact information, and set preferences for seats, luggage, and meals. 

A complex and lengthy checkout process is something customers despise regardless of the domain, be it airlines or other eCommerce sectors. Even a study by Baymard Institute says 18% of shoppers/customers abandoned their carts because of the complicated or long checkout process.

2. Lack of Preferred Payment Methods

This is self-explanatory. Regardless of your business, if you are not offering payment methods customers prefer, they will abandon carts. And because airline companies deal with customers across the globe, not being able to offer preferred payment methods is quite common, leading to frequent abandonments.

3. Pricing Transparency and Hidden Fees

Yet another reason behind customers abandoning carts is the lack of pricing transparency and hidden costs. Customers are often shown a lower upfront amount when booking flights than what they're asked to pay at checkout. And this can be frustrating.

Even a study shows that 48% of shoppers abandoned carts because the additional costs were too high for their purchase. Standard hidden charges in the airline industry include insurance, passenger service fees, seat selection charges, and more.

4. Complex Fare Structures

The free structure for booking air tickets is quite complex. Also, there are multiple add-ons like window seats and full refunds on cancellation, which are there to upsell to the customer and offer them more convenience. However, more often than not, customers consider these add-ons as additional fees or hidden charges, which can make them abandon their carts during checkout.

5. Payment Security Concerns

With the increasing internet penetration, customers are becoming more aware of security threats surrounding online payments. And they'd not think twice about abandoning the cart if they found something fishy. According to key shopping cart abandonment statistics, 35% of individuals abandoned carts because they did not find the website secure enough.

6. Payment Failures

It's common to see payments fail for several reasons: low authorization rate, payment gateway downtime, and other technical glitches. However, this leads to a poor customer experience and is one of the reasons behind cart abandonment. Also, this breaks the customers' trust, meaning they might never return to complete the purchase.

7. Price Comparison (Higher Costs)

Regardless of the industry, customers will switch if they get a better deal elsewhere. Often, when customers visit an airline website, they only want to check the availability of seats and the pricing. Once they have the information, customers compare the prices and choose the better alternative. And asking for a higher price ensures the customer won't return to your website.

8. Mobile Experience and Optimization

Mobile experience matters quite a lot, considering the fact that the mobile travel booking rate jumped to 41% in 2021. And if your website is not optimized for mobile or your mobile app has glitches, it may force customers to abandon carts. For instance, according to Tnooz, around 32% of mobile travel bookings are abandoned because of slow loading. 

How Can Airlines Reduce Cart Abandonment Rates?

For starters, airlines can reduce the length and complexity of their checkout process. If customers can reach the checkout page without friction, the chances of them abandoning the cart drop significantly. Also, airlines must be transparent about their fee structure and simplify it for easy understanding. Moreover, airlines must optimize their websites (for mobile devices) to eliminate any glitches and boost the overall customer experience.

But what about other issues, such as payment failures, higher payment costs, lack of preferred methods, and safety concerns? Well, for that, you need a payment orchestrator.

How Can a Payment Orchestration Solution Can Help Airlines Reduce Cart Abandonment Rates?

A payment orchestration solution is like your end-to-end payment management platform that helps you manage gateways, acquirers, and payments in one place. Integrating inai into your airline business can substantially lower your cart abandonment. Here's how:

Multiple Payment Methods

Being an orchestrator, inai connects you with 30+ payment gateways and allows you to offer 300+ payment methods to your global customers. This way, you can show your customers all the preferred payment methods, be it digital wallets, crypto, cards, or BNPL.

Reduced Payment Costs

inai gives you a complete breakdown of payment fees for every transaction using a payment gateway. Having this information for multiple gateways or payment service providers, you can choose an affordable option each time, reducing your overall payment costs. When your payment costs are reduced, you can also charge your customers a little lower, reducing your abandonment rate.

Higher Payment Security

By integrating payment orchestrators like inai, airlines can take their security stature to the next level. inai comes with fraud prevention tools and is PCI-DSS certified, ensuring secure transactions for your customers. This can give customers a sigh of relief when they're transacting on your website.

High Success Rate

Technical glitches from payment gateways and downtimes can negatively impact your revenue and reputation, especially if you rely on a single payment gateway. By partnering with inai, you can route transactions via the best payment gateway based on multiple factors to reduce payment failures and keep the dollars rolling in.

Data-Driven Decisions

inai also offers you access to detailed payment data, including successful and failed transactions, reasons behind the failure, average transaction fee, success or authorization rate, and more. Using this data, airlines can make better decisions and further reduce costs and, thus, cart abandonment rates.

Wrapping Up

A high cart abandonment rate means you're losing a lot of sales, which further translates to lower revenue and profits. 

Therefore, it's monumental for airlines to take the necessary steps, as mentioned in this blog, and integrate a payment orchestration solution like inai. With the amalgamation of these solutions, airlines can bring cart abandonment rates down while boosting their revenue and profit margins.

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