Ancillaries are becoming an increasingly important part of the airline revenue arsenal generating close to USD100 billion for the industry last year. Large strides have been made in generating non-ticket revenues. Yet technological advances are making wider opportunities available.
Not only new forms of distribution, but also using more straightforward methods such as incentivising staff and expanding the use of inflight WiFi to generate totally new sources of income. A focus on enhancing customer experience rather than a reliance on unbundling also provides more attractive relationships.
Capturing more of the passengers’ travel wallet not only improves an airline’s own economics but makes it more relevant to the passenger and hence improves their stickiness/loyalty (e.g. premium passengers are not just looking to reduce their air spend but their entire travel spend so if airlines can leverage their buying power with hoteliers and other suppliers and offer good value bundled travel packages to their passengers through their holidays brand).
Given ancillary revenues are typically not part of the initial purchase decision they are more resilient than air fares. But they must be merchandised (right offering to the right person at the right time and at the right price) rather than merely being passively offered.
In this session recorded at the CAPA – Centre for Aviation Airline Leader Summit: Making Money 2019 at the start of May-2019 APEX, CEO, Dr Joe Leader explores the subject with CellPoint Mobile, SVP, head of global sales, airline and hospitality, Noel Connolly; easyJet, head of proposition, Kim McDonnell; PROS., principal, travel division, Surain Adyanthaya; Ryanair, CMO, Kenny Jacobs; and Sabre, VP & regional general manager, Alessandro Ciancimino.