What if your in-flight retail transactions were conducted in real-time? What if you could grow your average onboard transaction value without creating any additional overhead? What if you could reduce your annual credit card processing fees? What if your share of the airline industry’s fraudulent card usage were reduced substantially? That is the new reality for a rapidly growing number of global carriers, and your airline could be next!
Transacting in-flight credit and debit cards in real-time is not only beneficial for an air carrier’s own operations, but for the entire industry’s business cycle. Previously, the introduction of in-flight credit and debit card acceptance meant that airlines would store credit card information onboard and then transact the sales once they hit the ground. This left airlines susceptible to fraudulent card usage and losing out on valuable revenues. The saving grace was that the transactions were generally for a meal and perhaps a couple of drinks. But now that new in-flight offerings are inflating the average transaction value to upwards of US $50 with ground transfer vouchers, theme park passes and high-end catalogue sales, the vulnerability has risen in tandem.
The return on investing in the enablement of real-time transactions is vast for airline operators. Take for example the average transaction value increase. A preliminary increase in offerings aboard some of the world’s largest airlines has resulted in a 33% increase in average transaction value. For a mid-size carrier, this could mean an increase of approximately $33 million in liquid assets not to mention the increase in superior passenger experience.
Let’s take this one step further. According to Generation DataBank, the 100 top-producing airlines took in at least US $2.1 billion in duty-free sales in 2007. Assuming an average duty-free transaction value of US $70, a 3% loss due to fraud, a payment of 3.5% in average credit card fees and a profit margin of 17%, the adoption of real-time credit card authorization would result in a total industry profit increase of over US $380 million. The entire industry would have a full ROI payback in less than two years. Additionally, the inclusion of more diverse retail offerings could decrease that time frame greatly.
It can be difficult to visualize just how beneficial adoption of this model can be for a specific airline, so GuestLogix has a solution. A brand new web calculator has been created to confidentially input an airline’s specifications. Based on things such as the total number of aircraft, their passenger’s average transaction value and the current annual onboard sales, the Real-Time Credit/Debit Card Authorization ROI Calculator will show you just how valuable this new offering is for an airline in just a few clicks.
This model focuses only on the benefits related to the adopting real-time credit card authorizations for onboard sales. Additional benefits are present above and beyond this calculator such as the redeeming of loyalty points. To see the extent of return that can be achieved over the first year as well as a five year period, click here.
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