The McGraw-Hill Companies
Aviation Week

Blogs Forums Photos Videos My Aviationweek
                                                                        Get 5 Free Issues of aviation daily Now!

aviation daily

Reader's Tools

Print Article
Email Article
Save Article
Make a Comment
Email Alert
Bookmark and Share

Airlines Focus On Ancillary Revenue


May 19, 2009



 

The next big push in airline ancillary revenue could come from more pre-flight and inflight retailing and wider distribution of unbundled and ancillary services, such as preferred seats, priority boarding and lounge access via GDSs and online travel agencies.

Such options emerged as consistent themes at the Airline Sales Channel and A La Carte Pricing conference last week in Miami.

Companies such as Onboard Retail Solutions, GuestLogix and ARINC (with its SkyBuy program) were here pitching their vision and technology for more inflight retailing, including so-called “virtual products” that don’t require the on-board stocking of inventory that adds costs in logistics and fuel-guzzling aircraft weight. The future could see a lot more inflight sales of tickets for theme parks, shows and train service (a bit of which has already begun), as well as for other destination attractions and even flower orders for loved ones just left behind.

Everyone gets a cut of the sales, including the airlines and the flight attendants who sell them, and sometimes the companies that supply the product are willing to offer them at a discount to spur sales. Of course, the companies providing the technology make more money when more airlines use them, or use them more often.

Airlines are being encouraged, too, to make a bigger push to sell more destination-related products to their own customers well before they board the flight.

Martin Collings, with Amadeus, emphasized research showing that customers, on average, make airline bookings 46 days before a trip, while they buy destination-related content 30 days before, and book both hotels and rental cars about 24 days before. That leaves a huge window of opportunity for airlines to pick up more of that business than they are getting now.

Airlines have a “natural advantage” in making such sales, he noted, because they can see the passenger’s travel plans, can get them to opt-in to receive the information and “have a stronger brand in knowing the destination.”

For example, he said, an airline can see via the Passenger Name Record if a child is booked on the trip and the family is booked for discount economy tickets, which can guide the airline to offer three-star family hotels. They can similarly tailor their options for people on bookings that tend to be for business travel, again tailored to their fare level.

Collings, head of Airlines Robotics for Amadeus everywhere except North America, argued the profit potential for airlines is “maybe five times greater” than they have realized so far. “This is sitting in your lap. You have to take advantage of it,” he said.

Airlines also are looking to wider distribution of their current a la carte and optional service offerings to help boost revenue.

1 2 Next Page >>

Article Comments
- Advertisement -
Commercial Aviation News

AVIATION WEEK Blogs

Recent Blog Posts
Recent Photos
Selected Videos

WORLD AEROSPACE DATABASE