The Guestlogix team was in Singapore last month for Aviation Festival APAC 2018. Our account director Stuart Southway wrote a great blog before the show (read here), where he talked about the tremendous opportunity for air travel in the Asia-Pacific region, which surpassed North America last year to become the No. 1 digital travel market in the world. I wanted to take an opportunity to continue the conversation where he left off.
Increasing Ancillary Revenue in Asia-Pacific
In last year’s traffic results report from the Association of Asia Pacific Airlines (AAPA), the organization’s Director General, Andrew Herdman, offered an outlook on the APAC region that reflected our discussions at the Aviation Festival in Singapore and throughout the airline industry:
“The encouraging results mirror the current solid and steady expansion in the global economy. Airlines have responded by strengthening their networks offering additional frequencies and adding new destinations. At the same time, the rise in global economic activity has seen a sustained pick up in global trade and transportation of manufactured goods, with air cargo playing an important role in restocking global supply chains and the growth of e-commerce. …The overall demand outlook remains positive, although Asian airlines are operating in highly competitive markets and face rising cost pressures, with average jet fuel prices up 24% to US$64 per barrel for the first ten months of the year. Nevertheless, Asian airlines remain focused on implementing further improvements in operational efficiency and other cost saving measures, whilst identifying new opportunities for revenue generation.”
This has become a familiar story for airlines: rising costs, exponential growth in passenger demand and increased competition on routes. This competitive environment has pushed airlines to be more innovative and forward-thinking when it comes to ancillary revenue. Going beyond fare unbundling, more airlines are implementing new solutions for retail analytics and more personalized ancillary merchandising through passenger smartphones.
Revenue Opportunities for APAC Airlines
I hope the discussions that took place at Aviation Festival around airline commerce, onboard retail and “day of travel” revenue can be brought back to bottom-line concerns and pain points. The key question posed by the Association of Asia Pacific airlines last year remains a pressing concern: How can airlines operating in Asia-Pacific identify new opportunities for revenue generation?
With that in mind, I encourage you to learn more about our airline commerce platform here, which can help solve ancillary revenue challenges while transforming passenger experience for smartphone users.
Ever since the airline industry started being deregulated, airlines have been “unbundling” fares and charging for ancillary services, which has helped drive down the cost of air travel. Passengers want low fares, but they don’t like the resultant trade-off where they are forced to sacrifice quality of service in exchange for low fares. They have accepted the trade-off – begrudgingly – but the result has been a long deterioration of passenger experience as passengers come to see air travel as an experience to be endured rather than enjoyed.
For airlines, the first step to satisfying passengers and increasing revenue is to make them feel in control by empowering them to use their mobile devices at every touchpoint.
If you were at the event and didn’t have a chance to talk to Stu, you can schedule a demo to learn how Guestlogix is helping airlines deliver a better experience to their passengers and increase their ancillary revenues, in and out of the cabin.