While unbundling has become something of a catch phrase in the airline industry over the economic downturn, LCC and global carriers have found themselves tapping into all sorts of new revenue streams while trying to keep the flying traveler from feeling nickel and dimed. Now having to pay for checked baggage, seat assignments, blankets and pillows, many passengers are left with a sour taste in their mouth from a lack of “complimentary services”. As this irreversible model evolves, the focus is now on how to increase the passenger offerings while still allowing new revenue streams to flow in.
Passengers want to feel appreciated. They want to know that the airline is doing all they can to keep them safe and make their travel experience comfortable and convenient. Airlines are working to make a profit while keeping customer loyalty and remaining competitive in a growing marketplace. The answer is simple; a practical approach that holds no overhead for the airlines, additional revenue streams at very high margins, and increased offerings for passengers that focus on end-to-end travel experiences.
In-flight merchandising has the potential to make one airline stand apart from another. While one airline is selling ground transfer tickets to passengers to ease the transition from the airport to their final destination, another is creating a full spectrum of retail offerings through high-end catalogue purchases directly onboard the aircraft. While one carrier is allowing their passenger to look through a selection of theatre tickets or concerts at their upcoming destination and selling tickets to those events within the confines of the plane, another is busy transacting vouchers for sightseeing tours before passengers land in Paris, New York or Beijing. These new offerings give airlines the opportunity to start rebundling packages and reclaiming their passenger focus.
“Unbundling was the trend, and that did create lots of value in the airlines. The future is in rebundling,” says Andrew Watterson, an airline consultant at Oliver Wyman, a management consulting company. Business Travel Coalition Chairman, Kevin Mitchell agrees. “There are all kinds of opportunities,” he says, “You have a captive audience.”
The spotlight has been put on GuestLogix as the merchandising initiatives the company has created over the past year will ‘evolutionize’ the way the airline industry operates and will subsequently create new passenger loyalty for each airline partner. Managing Director of Global Merchandising for GuestLogix, Chris Gardner notes, “It is an industry of relationships. It’s all about our strong relationships with the airlines; our growing relationships with destination partners; and the relationships between the passenger and their choice airline. We never lose sight of that.”
What seemed like a far off concept a year ago is about to become an industry standard. A major global carrier is, for the first time, about to launch an offering of ground transportation vouchers and in-flight catalogue sales to their passengers. Those travelling on this airline will be able to buy their destination transfer voucher while ordering a new video camera to be delivered to their hotel, and the airline will profit. The sky is no longer the limit, and GuestLogix is at the helm.
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