Page 28 - AAA MAY-JUNE 2012 Online Magazine

FEATURE INFLIGHT RETAIL

looking ahead, airlines who employ
a robust on-board retail strategy can
One new dedicated in-flight
sales terminal, the XPDA-SP, expect continued increasing revenues
comes with all the features for decades to come. With continued
needed for effective retail overhead price fluctuations – such as
interaction such as barcode jet fuel up 15.4% from this time last year
scanner, integrated printer and – ancillary revenues will be critical for
magnetic stripe reader, but with airlines. new technology is changing the
extra security. The design allows way airlines sell products and services
quick and easy use by flight to their passengers. this technology
attendants represents an evolution in the approach
to ancillary revenue development more
than the creation of new tools to execute
established strategies more efficiently.
these will create meaningful new ways
for airlines to connect with travellers, and
provide more opportunities to monetise
the travel experience. managing and
controlling travel-relevant products and
services that provide opportunities in the
booking path, at the airport or gate, in-
flight, and at destination using dedicated
point-of-sale systems, personal
electronics and the mobile channel are
all vital for the development of sales.
although mobile app developers
and the smartphone-owning public have
seized on the airline and travel industry

Since the new style of in-flight retail sales are all software-based, airlines can keep better track of what
sells, breaking the data down for specific flight routes, times and seasons. That can be a huge benefit
for airlines as they further separate various products and services to create new and profitable revenue
streams. With average airfare prices dropping year on year, many airlines are becoming more reliant
on non-ticket revenue to balance the books. “Several European carriers have shown great success with
generating ancillary revenue on board ... with up to four to five different ‘selling opportunities’ on a given
flight like drink service, snacks, duty-free items and train tickets,” noted Alison Croyle, a spokeswoman
with JetBlue Airways in New York, which has introduced a degree of smart onboard retail. “As technology
improves, it is likely that more carriers will look toward this as a great way to meet customer needs as well
as generate additional revenue,” she said.
According to analysts, airline-ticket prices have fallen some 20% in the last 15 years as fuel costs have
more than doubled, leaving a significant gap between sales and costs. “Flying has become a commodity,” said
one investment analyst. “Consumers want to fly, but at the cheapest possible price.” Given this senario of
dropping principal income, airlines have to drive revenue by looking at nonticket income. But identifying non-
ticket passenger revenue is difficult. Airlines are cagey about giving numbers, and the Transportation Bureaux
don’t provide much detail. In the third quarter last year, the latest period for which data is available, ancillary
revenue for US airlines climbed some 36% to US$2 billion, which included US$740 million in baggage fees, in
addition to reservation change fees and some miscellaneous operating revenue. - Sources

28 ASIAN AIRLINES & AIRPORTS MAY / JUNE 2012 WWW.ASIANAIRLINES-AIRPORTS.COM