Ancillary Revenues
Delta Picks – airline sells products curated by its flight crew
11 November 2011 | Airline crew are one of the most important assets an airline has. Witness Southwest, who is actively encouraging its employees to make a difference, and describes them as someone “who dares to make mistakes; dares to be different; finds a way to utilize people’s special talents; and lives a little on the edge” (examples include a Southwest pilot who held his plane so a passenger on his way to a funeral could make it, or the airline’s famous rapping flight attendant David Holmes).
Cathay Pacific
Airlines such as Cathay Pacific and SAS are also putting their employees in the spotlight. Cathay’s ‘Meet the Team’ campaign has been running for some years now – and recently took some hitting- and introduces a dozen of the airline’s staff through profiles and behind-the-scenes stories in print ads, YouTube videos, on Facebook, and via an iPad app.
SAS
On a similar not SAS has just introduced ‘The Face of SAS’ on Facebook, which highlights several of its employees every week as the airline’s Facebook profile-picture, as well as present themselves and what they do at SAS. In SAS’ words: “We believe that our employees are our single most important asset. Here’s your chance to get to know them – and SAS – a little better.”
SAS also publishes an annual ‘SAS Crew Guide’, a ‘crew-sourced’ guidebook consisting of recommendations by SAS cabin crew and pilots for accommodation, shopping, dining, sightseeing and nightlife in many of the cities served by SAS. The 350-pages guide also contains 13 personal profiles by individual crew members and their favourite cities and is sold online for EUR15 (or 4,410 SAS Bonuspoints) as well as in select bookshops in Scandinavia, the UK and the U.S. The New York section of the SAS Crew Guide is also available as a free iPhone and Android app. Read full article »
Aeroports de Paris teams up with consumer brands to offer free airport amenities
See our Facebook page for more images
7 November 2011 | Faced with ever more experienced consumers, who routinely ignore the commercials and ads thrown at them, brands have found new ways to break through the advertising clutter to reach and engage consumers. Coined by trendwatching.com, ‘tryvertising’ can be thought of as “product placement in the real world, whereby brands integrate their goods and services into daily life in a relevant way, so that consumers can make up their minds based on their experience, not on the message.” Being high-traffic locations with a diverse and international mix of consumers, brands see airports as a good setting for tryvertising campaigns, while for airports they are an economical way to improve the service, or even as an additional source of revenue.
The free, branded, airport amenities are also examples of the ‘marketing as a service’ trend (or ‘Brand Butlers’ in trendwatching.com lingo). When advertising no longer talks at you but actually does something for you, then it becomes a service. Brands get meaningful exposure, airports get happier travellers and consumers perceive the brand as an emphatic and helpful resource.
While tryvertising/brand butler services can be found at airports around the world (see our Facebook page for an extensive slideshow), Aéroports de Paris, which operates Paris’ Charles de Gaulle (CDG) and Orly airports, has embraced the concept on a large scale.
Samsung and Sony brand spaces
At the end of July 2011, consumer electronics brand Samsung opened the ‘Samsung SoundCorner’ at Charles de Gaulle airport’s terminal 2B boarding lounge. The free entertainment and music lounge consists of individual alcoves equipped with Samsung Galaxy Tab 10.1 tablets to relax while listening to music. The tablets give access to the SoundCorner application, developed by Universal Music, which offers a selection of a hundred songs to listen (the selection is renewed every month). The alcoves also have connection stations to plug in passengers’ own devices so they can listen to their own music via the directional sound speakers fitted in every alcove. A central screen also plays video clips non-stop.
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Airlines go wireless with their in-flight entertainment systems
5 September 2011 | Updated December 2011
In another sign that in-flight entertainment (IFE) is increasingly mimicking the fast developments in digital consumer electronics (witness the flurry of recent announcements by airlines to make the Apple iPad available to passengers and crew). A similar burst of activity is currently taking place in wireless in-flight entertainment (IFE) as airlines are responding to the growing number of travellers bringing their own devices on board.
Essentially an intranet on a plane that replaces the several kilometers of cables needed to connect every single seat, with a wireless network that allows passengers to connect to content on an onboard server with their own laptops, smart phones or tablet PCs, wireless IFE is a relatively cheap and light-weight solution for airlines. The system vastly expands the ‘standard’ IFE features with services such as online shopping and reservations, destination information, real-time travel information and seat-to-seat chat. Following early roll-outs by American Airlines, Delta and Brazilian LCC Gol, half a dozen of other airlines are currently testing (or have announced) a wireless IFE service.
GoGo ‘Vision’
American Airlines (AA) in early August 2011 launched the “initial phase” of Gogo’s new ‘Vision’ inflight streaming video product, which AA calls ‘Entertainment On Demand’. Passengers flying on AA transcontinental fleet of 14 B767-200s on routes between Los Angeles, San Francisco and New York JFK, can wirelessly stream more than 100 movies and TV shows from an in-flight library to “select types” of wi-fi enabled laptops (video here). American is the first airline in the world to offer streaming video to passengers via their own wireless devices from an onboard server.
How it works: Customers click on the Entertainment On Demand banner on AA’s in-flight wi-fi homepage, select a movie or TV show from the titles in the content library, create an account or log in, enter the form of payment (all major credit and debit cards are accepted) and click “rent.” Passengers can sort titles by movie or TV, genre, length of feature and other categories, and trailers are available for complimentary viewing prior to renting content. Movies and TV shows will remain accessible for viewing after the customer has landed – movies for 24 hours and TV shows for 72 hours. The service charges an “introductory price” of USD 0.99 per TV show and USD 3.99 per movie, and will not require customers to purchase inflight Wi-Fi to utilize the Entertainment On Demand feature. See this video for more.
Ryanair and Samsonite offer ‘guaranteed’ carry on bag
29 July 2011 | In the U.S, most major airlines (with the exception of Southwest and Jetblue) now charge passengers to check their luggage. This has led to an increase in the size and amount of carry on luggage that passengers take on board, which in turn has caused issues with available space in the overhead bins. Airlines such as American Airlines have responded to this by introducing early boarding fees, allowing passengers to board early so they can store their luggage, while low-cost airline Spirit Airlines has even introduced a fee of USD20 to USD40 to take hand baggage on board.
In Europe, meanwhile, Latvian-based airBaltic recently introduced its so-called ‘airBalticBag’, an airBaltic-branded Samsonite suitcase which for EUR169/181 (depending on size) can be carried as free checked luggage on an unlimited number of airBaltic flights for a year. AirBaltic normally charges passengers in Economy a fee of EUR20 to 30 per checked bag one way.
Ryanair
On a similar note, Ryanair has teamed up with Samsonite to offer a hard-shell carry-on bag which is guaranteed to meet the airline’s carry-on luggage weight and size restrictions. Each Ryanair passenger (excluding infants) is permitted to carry one piece of cabin baggage on board free of charge, which should weigh no more than 10kg and not exceed the maximum dimensions of 55cm x 40cm x 20cm.
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Airline ‘fare clubs’ offer regular travellers a standard discount
7 July 2011 | As ancillary fees for checked baggage, priority boarding, extra legroom seats, etcetera, become more commonplace in the airline industry, several airlines have been introducing branded/bundled fares and annual ancillary subscriptions as a next step. United Airlines, for example, offers unlimited checked baggage for USD349 a year, while airBaltic recently introduced a similar fee in partnership with luggage brand Samsonite. Another category are ‘fare clubs’, which for an annual fee, provide regular travellers with a standard discount or access to member-only fares.
Wizz Air ‘Xclusive Club’
Wizz Air, a low-cost airline from Poland that offers flights from several bases in Central and Eastern Europe, has recently launched a new membership program called Wizz Xclusive Club. For an annual fee of EUR 29.99, Wizz Xclusive Club members get exclusive access to a pool of tickets that can be cheaper by up to 10 EUR per one-way flight than regular prices. Up to 9 passengers can be booked together with the Xclusive Club member on the same reservation and benefit from the discounted fares. Wizz Air is the first airline in Europe to offer a ‘fare club’ and says that in the first two weeks following the rollout, almost 50 thousand customers signed up.
Spirit Airlines ‘$9 Fare Club’
Wizz Air seems to have been inspired by Florida-based low-cost carrier Spirit Airlines, which in 2008 launched its ‘$9 Fare Club’. Spirit guarantees a member-only sale, with ticket prices as low as a few dollars, at least once every six weeks, but usually offers at least one sale per week. The special fares are offered on a first come, first serve basis and travellers flying on the same ticket will receive the members-only fare as well. Annual membership of the $9 Fare Club costs USD59.95, but those who sign up for a Spirit-branded MasterCard also obtain a free membership to the $9 Fare Club.
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US Airways offers passengers free branded snack boxes on domestic flights
4 July 2011 | With advertising budgets under pressure and traditional mass advertising losing its effectiveness, advertisers are looking for new ways to reach consumers. At the same time many airlines have begun charging for services that used to be included in the price of the ticket. One solution for airlines that want to cut cost, but maintain their service level, is to team up with advertisers to offer amenities such as in-flight Wi-Fi or Starbucks coffee for free.
US Airways
The latest initiative comes from Air Advertainment, a marketing company that sells snack boxes to advertisers and gives them to airlines to distribute to passengers for free. Air Advertainment today announced it has signed a marketing partnership agreement with US Airways to offer its branded snack boxes on the US Airways Shuttle between Boston Logan International, New York LaGuardia and Washington D.C. Regan National airports, from July 1st on. In November 2010, US Airways Shuttle and Air Advertainment already tested the concept on several flights, with Embassy Suites Hotels picking up the bill.
The branded snack boxes are sponsored by Gilt.com, an online U.S. retailer that stages online ‘flash’ sales, offering luxury goods at discounted prices in a limited-time sale format, typically 36 to 48 hours. Membership can be requested at the website, but otherwise it is by invitation only. Gilt has also partnered with in-flight WiFi provider Gogo to offer flash sales at 35,000 feet. From July 1st, all Gogo-equipped Delta, United, Virgin America, Alaska Airlines and US Airways aircraft will provide free access to the Guilt site. To further entice customers Gilt is offering exclusive in-air deals.
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Delta to let passengers rent iPad at the airport for onboard use, return it via mail
13 June 2011 | Delta Air Lines and airport food and beverage operator OTG Management have teamed up to modernize the food and beverage offering at Delta’s Concourse G in Terminal 1 at Minneapolis-St. Paul International (MSP) Airport. As part of the plans, Delta will upgrade its current food and beverages offerings with 12 new local restaurants and several fresh food markets (images here), and similar to Delta’s New York JFK and La Guardia terminals, seating will be equipped with iPads which passengers can use to order their food and beverages to have it delivered to their seat by a server in less then 10 minutes.
OTG Media Bar
Delta and OTG will also introduce the ‘OTG Media Bar’, a virtual newsstand where Delta passengers can rent an Apple iPad, loaded with the content of their choice. At what looks like a traditional magazine stand, except it will be filled with Apple iPads, passengers can flip through the iPads to see what publications, movies, and music they like, download the content of their choice, and then rent the device for their trip. Once the passenger reaches his or her final destination, a pre-paid postage box received at time of rental is used to return the iPad. This concept of returning rented goods via the mail has been popularized in the U.S. by DVD subscription service Netflix in recent years.
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airBaltic and Samsonite introduce innovative checked bag fee
30 May 2011 | Latvian-based hybrid low-cost carrier airBaltic has introduced an innovative ancillary product, called the airBalticBag. Regular flyers with the airline who purchase an airBaltic-branded Samsonite suitcase can carry it as free checked-in luggage on an unlimited number of airBaltic flights for twelve months from the day of purchase. AirBaltic normally charges passengers in Economy a fee of EUR20 per checked bag one way when pre-booked online and EUR30 when purchased at the airport.
How it works: Travellers can purchase the airBalticBag (which is the lightest Samsonite suitcase available) in two sizes: The smallest suitcase weighs 2.3 kg and can also be taken into the cabin, while the larger model weighs 3.2 kg and can be used as checked-in baggage only. Prices for the suitcases are EUR169 and EUR181 respectively, which is within range of Samsonite’s suggested retail prices.
Passengers then register for airBaltic’s BalticMiles frequent flyer program and receive a personalised ‘free baggage tag’ with their full name and BalticMiles number, which should be attached to the Samsonite suitcase and correspond with the name on the flight ticket when taking a flight. The airBalticBag can be purchased online or in airBaltic ticket offices in Riga, Vilnius and Tallinn.
Tangible product
The outcome of an internal brainstorm session at airBaltic, the airBalticBag is a smart way to sell a checked bag fee, which many passenger regard as just another way of making money by airlines. Besides the annual subscription, which should save regular travellers in Economy class money when they fly more than four times a year, the product gives passengers a tangible product instead of just another fee. For Samsonite, the airBalticBag is a new way to promote its lightest suitcase, the B-Lite. It is unclear however, what the annual fee of the annual subscription will be for the second year and airBaltic says it is currently evaluating various options. Passengers in airBaltic’s Business Class as well as Executive and VIP-level members of BalticMiles will continue to be able to can check in luggage for free.
Jetstar to install new lightweight seats with iPad holders
1 May 2011 | Much has already been written about the in-flight rental of the iPad by airlines such as Jetstar, Iceland Express and airBaltic. In June 2010, Qantas low-cost subsidiary Jetstar became the first airline in the world to offer the iPad for rent in a month-long trial on two routes out of Melbourne. Iceland Express was the first airline to introduce the device for rent on an ongoing basis in November 2010 (on transatlantic flights), while airBaltic just confirmed it will make the latest version of the device, the iPad 2, available for rent in-flight from early June 2011 on.
Jetstar and the iPad
Initially planned to be rolled out by year-end 2010 across its fleet, but this was reportedly delayed due to contract negotiations with Apple and media outlets, Jetstar is about to roll-out the iPad as its main source of in-flight entertainment. Although no firm date has been announced yet, Group CEO Bruce Buchanan in the April 2011 edition of Jetstar’s in-flight magazine says that the introduction of iPads is ”imminent”.
iPad seat integration
Jetstar’s iPads will include a novel feature. Flightglobal and Australian Business Traveller report that Jetstar will fit the iPads with a purpose-built case which includes a bracket that lets passengers hang the device at eye level on new ‘Pinnacle’ slimline seats from B/E Aerospace. The seats will come installed on Jetstar’s new A320s (of which it has 44 on firm order) and the airline will also retrofit around 25 aircraft with the new seats during 2011.
B/E Aerospace has relocated the literature pocket to the top of the Pinnacle seat, which freed up more leg room and allows the iPad case to be clipped backwards onto the seat pocket at eye level. Alternatively, a flip-stand on the case lets passengers rest the iPad horizontally on the seat’s tray table. See this video demonstration for more on the workings of the iPad case.
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Korean Air’s new A380 to feature in-flight duty free store
13 April 2011 | The Airbus A380 ‘superjumbo’ provides 50 percent more floor space compared with the Boeing 747, but airlines on average install 35 percent more seats, leaving the remaining space available for roomier cabins and customized areas. Examples include First Class suites (Singapore Airlines, Emirates), onboard showers (Emirates), large bathrooms and changing rooms (Lufthansa, Air France), social areas (Emirates, Qantas, Air France and a staffed bar (Emirates). Currently five airlines operate the A380 and in June 2011, Korean Air will become the sixth airline to start flying the superjumbo (followed by China Southern in the fall of 2011).
Lowest A380 seat configuration sofar
With just 407 passengers, or 12 in First Class, 94 in Business and 301 in Economy (34” seat-pitch), Korean Air’s A380s will have the least dense A380 configuration so far. The entire upper deck will be dedicated to Business Class with a self-service bar in the front and a full service bar in the rear. First Class will be in the front of the main deck with its own dedicated bar, designed by Absolut Vodka, with the Economy cabin right behind it.
In-flight duty free store
Korean Air will be the first airline in the world is outfitting its new A380s with a physical duty-free shop. The kiosk will complement the regular duty free cart service and will be staffed by a full-time sales assistant. The store will display the best-selling items across categories such as liquor, cosmetics, accessories and fragrances and will be open for business for the duration of the flight. First Class passengers will be able to browse the shop and make purchases before anyone else, followed by Business Class and then other passengers. The orders placed by passengers will be delivered to their seats later. Read full article »
Austrian Airlines starts its own branded airport taxi service
9 April 2011 | In an effort to manage more parts of the passenger journey and capture much needed ancillary revenues in the process, airlines are increasingly cross-selling services such as hotel reservations, car rental bookings and travel insurance to passengers. Austrian Airlines is taking this approach a step further and recently has launched its own branded taxi service in Vienna.
Austrian red|cab
Available for Austrian passengers only, the Austrian red|cab service, which currently consists of eight vehicles sporting the Austrian name and logo, transfers Austrian passengers between Vienna (and surroundings) and Vienna Airport. Inside the taxis passenger find a free daily newspaper, Austrian’s in-flight magazines Skylines and Succeed and a bottle of mineral water. The red|cab taxis can only be booked online up to 24 hours before departure and payment is by credit card. The service starts at 29 euros each way for a private car for up to three people, while those opting for a minibus for up to eight people pay 40 euros each way.
Austrian promotes the red|cab service on its website, in the booking confirmation e-mail, as well as in its in-flight magazines and entertainment program. The taxis are operated by AirportServices Wien, and the red|cab service is part of a portfolio of ancillary products by Austrian, called red|services, which are mostly business class services made available to passengers in Economy for a fee.
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Airlines let passengers hedge against airfare increases, for a fee
23 March 2011 | After the introduction of additional fees for luggage, extra legroom seats, and in-flight catering, to name a few, a new category of ancillary revenues seems to be taking hold. A growing number of airlines are offering passengers a paid option to increase or descrease their exposure to rising ticket and fuel prices. For example, U.S. low-cost carrier Allegiant wants passengers to consider a variable-price ticket, where the final fare could rise or fall based on the cost of fuel, while Vueling, Air France, KLM and Continental offer customers a paid option to ‘freeze’ their fare for up to 14 days when making a booking.
Allegiant ‘variable fuel fare’
Las Vegas-based low-cost carrier Allegiant has come up with a new way to share the pain of rising oil prices with passengers. It has filed a request with the U.S. Department of Transportation for permission to sell a new type of flexible ticket. The purchase price would be less than a normal ticket’s, but it could subsequently rise or fall (with the customer either paying more or getting money back) depending on oil-price flucutations between the purchase date and the flight date. The increase would have a maximum that would be clearly disclosed. Allegiant will continue to offer the ‘traditional’ fixed-price ticket as well.
Because many passengers book months ahead, it is difficult for Allegiant—which unlike most airlines doesn’t hedge its future fuel needs—to predict what the fuel price will be at the time of travel. Furthermore, the U.S. Department of Transportation has proposed a new consumer protection rule that will prevent airlines from increasing prices after purchases are made, and Allegiant is suggesting its variable fuel fare as an alternative. The airline says it doesn’t have any immediate plans for the new pricing option but that it is looking for an approval in case its wants to offer it in the future.
With the fluctuating airfare the passenger is basically betting on oil prices as Allegiant is passing some of its fuel risk to the consumer, who gets a lower base fare in return. However, as airlinetrends.com commented to CNN.com (“Vegas airline proposes rolling dice on fares”), few consumers may actually want to incorporate this kind of risk into their ticket, since hardly anyone can make an educated guess about the future development of oil prices. For some passengers though, it may be a way to start their Las Vegas trip in style. Read full article »
Thai airlines open take-away deli’s in downtown Bangkok
3 March 2011 | Bangkok Air Catering, a unit of regional airline Bangkok Airways prepares inflight meals for more than 20 airlines, including Emirates and Qatar Airways, on flights out of Bangkok’s Suvarnabhumi Airport. In an entrepreneurial move, the company recently launched a new chain of delicatessen stores called Gourmet House, creating a new outlet for its meals. The first Gourmet House deli was opened in downtown Bangkok (Sukhumvit Soi) in mid-December 2010 and follows the airline’s earlier debut of catering services for private embassy and expat community parties.
Gourmet House’s selection of soups, meats, canapés and baked goods are prepared at Bangkok Air Catering’s unit near Suvarnabhumi Airport and trucked into the establishment daily. At the outlet, chefs apply some finishing touches, and a fresh meal is ready for sit down or take-out. Gourmet House emphasises takeaway purchases, but the 130m2 deli can also seat about 30 people. Gourmet House says it wants to establish itself as one of Bangkok’s top places to score gourmet food, using local products whenever possible, many of which are cultivated on the company’s farms at Sukhothai.
Reputable brand
According to Linus Knobel, managing director of Bangkok Air Catering, the Gourmet House franchise will help the company to make better use of capacity and resources at its airport catering facility, which currently produces 17,500 inflight meals per day against a full capacity of 25,000 meals. Bangkok Air Catering‘s 180 chefs have expertise in a wide range of international cuisines, and their skills can also be tapped for other distribution outlets, said Mr Knobel, adding that “taste, quality and hygiene are of the strictest standards for Bangkok Air Catering’s inflight meals, and these have found their way to Gourmet House as major selling points.” […] “It is the office workers and their bosses, the students and teachers, and the expats and their wives who yearn for a taste of New York or Milan, that we are catering to.” Read full article »
Southwest offers free access to iTunes via wireless in-flight portal
28 February 2011 | Southwest Airlines has partnered with Apple to create an entertainment download store called InAirtainment. To be used in the air or on the ground, the service takes the form of a website through which people can browse for music, movies or TV shows hosted on iTunes. Southwest says is it is receiving a small royalty from each download, which may be 5 percent if the airline is enrolled in the normal iTunes affiliate program. To promote InAirtainment, Southwest currently offers a playlist of 20 free songs from acts “about to fly” in their careers.
Asked whether the main goal for the InAirtainment service is to provide Southwest passengers with an alternative for in-flight entertainment, a Southwest spokeswoman said that “Our goal is to make southwest.com an one stop shop for all travel needs. Besides the option to book flights, car rentals, and hotels on our site, customers now have access to InAirtainment where they can download all their music and movies before they depart. Southwest.com is also available free of charge for customers on board our Wi-Fi-enabled aircraft. InAirtainment is a page within southwest.com, so customers are able to access the content free of charge in-flight.”
Gogo Video
The option to access iTunes for free on Southwest flights may be a sign of new in-flight entertainment options to come. For example, in-flight Wi-Fi provider Aircell last year announced plans for an in-flight video downloading service, called Gogo Video. This service would give passengers on Gogo-equipped aircraft (which number nearly 1,100 in North America) the ability to download movie and television content from an onboard server to their laptops via a portal similar to iTunes. According to in-flight entertainment expert Mary Kirby, Gogo however has delayed the introduction of the video service in order to further perfect it.
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Lufthansa (re)launches FlyNet inflight broadband on long-haul flights
4 December 2010 | After a four-year suspension, Lufthansa has relaunched its FlyNet inflight Internet service on November 30, 2010. With the introduction, Lufthansa became the first airline to offer passengers wireless broadband Internet access on intercontinental routes. The airline is initially rolling out the FlyNet service on aircraft operating select North Atlantic routes, such as Frankfurt to New York, Detroit and Atlanta. Ten Lufthansa aircraft (mainly A330s) have been readied for the service so far.
Lufthansa is offering the Ku-band satellite-based Internet service in partnership with Panasonic and mobile network operator T-Mobile. The airline will initially provide a WiFi Internet service for laptops and smartphones and GSM capability will be added in spring 2011. No voice or Skype calls will be permitted, however. “We got a clear message from our customers that they are seeking quietness on board and we respect this,” says Lufthansa vice president product management and innovation Christian Körfgen. Besides paid connectivity, passengers can also access news, sports and entertainment for free on an inflight wireless portal.
Pricing
Lufthansa will offer the FlyNet service for free until 31 January 2011. Thereafter, the price for one hour access is EUR10.95 or 3,500 miles, while the 24-hour flat rate is EUR19.95 or 7,000 miles. T-Mobile customers can use the inflight WiFi under their existing cell phone contracts, paying a fee of EUR1.80 for every 10 min. Under the 24-hour flat rate agreement, passengers can also use the FlyNet service on connecting Lufthansa flights during the period of validity as well as in Lufthansa lounges. The carrier aims to have 20 widebodies installed with FlyNet by the end of February 2011 and on all its intercontinental aircraft by the end of 2011. Read full article »
