Airline passengers have become one of the most lucrative consumer growth markets in the world. Today’s competitive travel market, where operating costs are rising and customers need more variety in offers, are pushing airlines to think and behave more like retailers than simply a mode of transportation.
According to a report released by PhoCusWright (PwC) in October 2013, Experience Radar 2013: Lessons learned from the Airline industry, airline passengers are raising their expectations and increasingly seeking an array of options and value enhancers, from extended seat space options and priority treatment to mobile check-in, food, entertainment and inflight connectivity availability.
Various passenger segments ranging from time-starved business travelers to budget-minded leisure travelers all show different appetites to purchase optional offers to enhance their traveling experiences:
PwC’s Consumer Travel Report in addition reveals that passengers are more interested in purchasing ancillary revenue at airport or in-flight. Among U.S. air travelers:
Attributing these to global airline passenger trips, which are expected to have reached 3.12 billion in 2013 by IATA, the ancillary revenue generated per passenger will be at $13.65, and the a la carte revenue per passenger at $7.60.
For many years, GuestLogix has served the global airline industry, designing, developing and delivering what has become the world’s most popular onboard retail technology platform. In parallel, during recent years, GuestLogix has identified a significant market opportunity within the rail industry with global investment in rail infrastructure at record levels. Advancing technology is also fueling this growth, and with trains now capable of achieving speeds of 500kph plus, high speed rail is increasingly replacing short haul air travel.
International Union of Railways (UIC) statistics unveils that the global rail passenger traffic experienced a steady growth over the past 10 years, from 25,784 million passengers in 2003 to 30,662 million passengers in 2012, at a CAGR of 1.9%.
In a survey commissioned by Amadeus where over 7,000 travellers from across Europe were polled, 46% of them said they were willing to pre-book onboard entertainment and Wi-Fi when embarking on a long distance high-speed rail journey, which demonstrates that rail operators are, and should be, looking outside of the traditional buy-on-board food and beverage model to increase ancillary revenues. Other rail operators are also looking to provide duty-free services onboard international journeys, which will bring additional key revenue streams. Selling theme park tickets and passes for events, concerts and local attractions onboard offers better convenience and less hassle at the destination – which actually improves the travel experience.
Together with the increasingly mature customer service and ancillary revenue practices, as well as the steady global growth in passenger volume, GuestLogix believes the benefits derived from technology solutions aimed at enhancing the customer experience and generating incremental ancillary revenues in rail industry will soar.