When airlines introduced the concept of unbundled fares (the first bag fees were implemented by United in 2008 as a permanent solution to fuel price increases), they opened the floodgates to a world of new ancillary revenue models.
Today, the airline sector and the larger travel industry are awash in ancillary merchandise, upsell options and cross-selling inventory. But navigating the myriad of options is confusing for travelers as they swipe and switch from app to app, especially across their day of journey. One app for the car service, another to check-in, another to do a food pre-order for delivery to the gate, another to get a seat upgrade… and all this before the passenger has boarded the flight. What travelers need is one app for the entire travel journey.
From an ever-growing flood of ancillary add-ons, it is both a challenge and opportunity for your airline to get the right inventory on the right flights, to the right passengers at the right time. But this starts with turning the direct (i.e., mobile) channel into a delivery point for delight and convenience. You can’t “just be present” anymore on passenger devices. You’ll need to make every journey easier and better for them as connected travelers and not just as passengers.
By using simple sales and product data and travel APIs, airlines can transform their apps into personalized and localized selling channels, where global sources of inventory come together in a seamless, curated experience for the connected traveler. By stocking only what passengers need, want and will buy, onboard teams can reduce inventory waste, personalize their passenger’s experience and sell more effectively before, during and after the flight.
Wasted Inventory Leads to Wasted Revenue
How can airlines make sure they are stocking the right inventory and delivering the right offers through their onboard catalog?
Ryanair, the leading low-cost carrier, was a pioneer in serving the needs of the connected traveler with its “Amazon of Travel” platform that provides search tools, travel guides, express booking, auto check-in and onward transport partnerships. Though Ryanair has caught flack for its aggressive approach and many of its marketing campaigns, the carrier ultimately changed the traditional airline model and forced everyone to think more like ecommerce retailers. Our own airline clients have been head of the line in this digital transformation.
Over the last decade, airlines have become increasingly successful with their unbundling strategies (think baggage fees, charging for meals in economy, paying extra for 3 inches of legroom). But there is a whole world of ancillaries available to airlines beyond what they can offer on their own. If traditional ancillaries were static and predictable and thus relatively easy to manage, today airlines are entering new territory as they connect traditional ancillaries to a much larger marketplace beyond the flight.
There is only so much revenue airlines can ultimately derive from peanuts and baggage fees and they are eager to build a new passenger experience around ancillary revenue, personalization and localization. But it starts with new apps that are truly useful across the day of journey.
At a time when travelers are relying more on digital concierges (think Alexa for Hospitality), airlines must be able to offer their own concierge app that unifies the day of journey for passengers and makes retailing easier for the airline.
Beyond the Flight, Beyond the Trolley
Forget about becoming the “Amazon of Travel” – airlines (regardless if they’re an LCC, ULCC or a legacy carrier) have opportunities to improve their selling in the direct channel right now, where they are, with what they have, starting with their greatest asset: the connected traveler. Connected travelers want the best, easiest and most useful travel app experience that your airline (or your competitors) can provide.
And this has proven to be beneficial for airlines because travel apps are essentially better and easier-to-use catalogs. In addition to paper catalogs (and instead of stocking a trolley blindly and letting passengers “choose”), airlines can use app KPIs to analyze the entire path to purchase and stock onboard inventory based on that data. What are passengers browsing for on their travel app? What are they purchasing at different airports or on different routes? What kinds of products are they purchasing in tandem – and could that same combo be offered to other passengers with similar shopping histories or on the same route?
In fact, all of this sounds a lot like Amazon – which from the consumer perspective, is a good thing. Ecommerce staples like personalization, localization and experience curation are not just for Big Tech companies anymore. Our platform uses the same retail analytics as Amazon or Starbucks to create “people like me” personas, allowing airlines to match inventory and offers based on similar transactional or behavioral histories.
It isn’t rocket science – it just takes some passenger data and an understanding of how the mobile channel can benefit passengers, flight crews and airline operations all at once, starting with seeing ancillaries as part of a larger retail operation and not just an exercise in airline economics.
Being There for Passengers, Always
The guest app at the center of our travel platform was designed to become the common app that travelers need on the actual day of journey. Whether they want to purchase products from the trolley or at the terminal, our app (branded to your airline) can be their go-to concierge that connects them to virtually anything they want or need. Because the app connects to the airline’s internal customer data, inventory and offers can be curated for that passenger, ensuring less inventory waste and more converted sales.
Want to learn more about our guest app for passengers and crew and see for yourself what kind of concierge experience your airline could be offering? Let’s discuss what your airline needs and in the meantime enjoy another blog on making the day of journey better with our platform and the travel app at its center.