Comments on: Ancillary revenues and airline branding webinar slides (with video!)

By: Koomaresen

Koomaresen — Wed, 15 Jul 2009 12:42:28 +0000

It would be interesting to determine what percentage of the the previously charged “airfare revenue” prior to unbundling of services is now classed as “ancillary revenue” and the net effect this has on the airline’s total revenue.

What would be the effect on revenue management should the majority of its passengers not opt for the “frills” when booking and flying and thereby paying the minimum for the seat as advertised? Would the airline be able to be profitable by charging its low base fare only?

Airlines need to look at other sources (non-airline) of ancillary revenue to boost product revenue and enhance the product purchased by the passenger.

By: Adam

Adam — Thu, 23 Apr 2009 05:13:15 +0000

Agreed – yet I believe airlines are not prepared to commit to the cost involved, even though the long term gains are greater. I believe that one potential solution, certainly for the inflight experience, is to take the partnerships with the likes of Gategroup and LSG to a greater level, to see where their services can provide more passenger value, so that the airline can focus more on efficiencies on board. In other words, the airline could focus solely on the actual flight and operations, and have the airlines services company (ie. LSG) take care of the ‘comforting experience’ – thus the design of the service, the manifestations of the brands, etc. could be carried out at a much more competitive cost. Just a thought…….who knows this could lead to airlines distinguishing themselves based upon the ‘airline services brand’ which provides the experience?

By: Shashank Nigam

Shashank Nigam — Thu, 23 Apr 2009 02:49:09 +0000

@Adam: Great points. I’m all for a holistically great experience delivery, across all touchpoints- something you’d have realized from reading the rest of my articles. I’ve actually seen a couple of airlines map out the experience – like Delta – but they often falter when it comes to execution. With so many silos and so many moving parts, it’s difficult to coordinate the perfect deployment as planned.

And yeah, as I mentioned in the webinar itself, showing the costs up-front works best.

By: Adam

Adam — Mon, 20 Apr 2009 04:50:50 +0000

I would add that more focus needs to be placed on the entire airline experience. I feel that sometimes airlines are are too focused upon inflight services, whereas if they were to fully map out the experience, they could find more relevant touchpoints to provide more valuable and profitable services/products for passengers. Airline brands need to understand that they cant just board passengers and get them off the plane asap, the full journey experience occurs until the passenger arrives home, to the hotel, etc. So where are the opportunities here for the airlines? Surely more partnerships at the destination is one example.

Also, having all the costs up front – have them customize their flight prior to boarding, so that they dont have to be charged while on board – not a pleasant experience for any passenger.

Adam – Branding & Aviation Enthusiast