Both generations were hit hard by the pandemic
Millennials and Gen Z are set to drive demand for buy-now-pay-later travel schemes as they continue to recover financially from the pandemic.
Data and analytics company GlobalData has found that airlines are partnering with fintech companies, such as Uplift, to offer these buy-now-pay-later travel schemes, which could attract price-sensitive Millennial and Gen Z travellers looking for flexible, affordable payment methods.
According to GlobalData’s Q4 2021 Consumer Survey, 34% of Gen Z and 36% of Millennials stated that they were ‘extremely concerned’ regarding their personal finances, which were the two highest percentages out of all the generations that responded to this question.
Speaking about Uplift’s recent partnership with Southwest Airlines, GlobalData Travel and Tourism Analyst Ralph Hollister said: “Uplift’s use of the terms ‘interest-free’ and ‘no late fees’ will no doubt attract price-sensitive Millennial and Gen Z travellers that are looking for flexible, low-cost payment methods.
“Most importantly for airlines and their recovery timelines, buy-now-pay-later schemes enhance accessibility as smaller payments can be made over several months, which translates to higher load factors. The accessibility that this payment solution offers means it is not only low-cost carriers (LCCs) taking advantage of this scheme, with Delta and American Express announcing their joint venture last month.”
Delta’s flexible payment option allows for Amex customers to break up their Delta purchases into monthly payments for an additional fee
Hollister added: “Airlines such as Delta can’t afford to only be seen as a premium service, as it will struggle to attract Gen Z and Millennial passengers. Through this payment option, Delta can get its foot in the door with these younger cohorts, then try to create repeat custom through its loyalty programme.
“Buy-now-pay-later could play a key part in the recovery of airlines that have adopted this payment method. Flexibility and affordability are key influencing factors for younger travellers, and this solution could even inspire a lifetime of loyalty.”
For more information, visit www.globaldata.com