Transport Airlines

The Next Stage of In-Flight Revenue Focuses on Destination-Based Sales

@SamShankman

Mar 13, 2014 9:00 am

Skift Take

Destination-based sales pushed through airlines’ entertainment portals are likely to meet less resistance than bag fees and change fees.

— Samantha Shankman

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Matt Slocum  / Associated Press

This Oct. 31, 2013 file photo shows a plane passenger checking her cell phone before a flight in Boston. Matt Slocum / Associated Press


Airlines can only raise bag fees so high before flyers revolt, so they are now quietly coming up with new ways to earn money from passengers already onboard.

One of the brightest prospects is the sale of ground transportation and event tickets. The industry took a big step towards introducing that option on seat-back screens and mobile devices this week with the formation of a new partnership between onboard retail provider GuestLogix and connectivity provider Global Eagle Entertainment.

The partnership will integrate GuestLogix’s destination-based merchandise platform OnTouch into Global Eagle’s in-flight entertainment platform.

Airlines will be able to sell passengers destination-based activities including ground transportation and attraction vouchers.

Skift talked to GuestLogix EVP of global sales and product strategy Ilia Kostov last month during which he described what he views as the next phase of in-flight purchases.

“We saw ancillary revenues rise when the airlines started to charge for bags on a global scale, but recently baggage fees have been plateauing. Where we see the industry evolving is toward services that add value to the passenger experience,” explains Kostov.

“These are services that passengers are usually happy to pay for. We see more and more of our customers interested in selling destination merchandise like attractions and ground transit. In-flight is the perfect opportunity to think about ground connection options and what you’re going to do there.”

Sun Country Airlines was one of the first airlines to sell ground transportation and destination activities onboard. Ryanair, infamous for its creative in-flight revenue streams, also sells vouchers for activities on the ground.

The destination merchandise gives airlines the opportunity to target high-value customers as well as let flyers browse on their own.

Self-service is becoming more prevalent not only in the travel industry where flyers engage with kiosks instead of gate agents, but also among general consumers who choose to bank and shop online on their own time.

“Sales are of higher value when self-service is available,” affirms Kostov.

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