Ancillary Revenues
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 »
Airlines create innovative guarantees to ease passengers’ booking worries
27 September 2010 | Airlines have come up with innovative ‘guarantees’ to let consumers book with more confidence. The schemes are intended to take away anxiety from consumers, caused by for example fears of job loss or weather conditions at their destination. Other airlines aim to drum up sales during the traditional slow fall travel season or are using guarantees as a new source of ancillary revenues. For example, JetBlue and Flybe last year offered a refund if a customer would lose his or her job after booking a flight. Flybe also offered a ‘volcanic ash insurance’ to let customers more peace of mind when booking during the Iceland volcano disruption in the spring of 2010. Lufthansa in July 2009 offered a ‘Sunshine Guarantee’, offering passengers who booked early EUR20 (up to a maximum of EUR200) for every day of at least 5mm of rainfall.
SmartWings ‘Weather Guarantee’
To increase advance bookings and generate additional revenues, Czech budget carrier SmartWings offers passengers a ‘weather protection insurance’ for EUR15 in order to receive EUR30 per day (with a maximum of 15 days) when more than 10mm of rain falls at their destination. The insurance has to be purchased 20 days before the actual travel date. The airline is providing the package, dubbed ‘MeteoBonus’, in partnership with ancillary revenue developer Airsavings, which says the product is based on similar services used in the agricultural industry to hedge against poor weather.
airBaltic ‘Delayed Arrival Warranty’
airBaltic from Latvia lets passengers bet against a late arrival of their flight. For a non-refundable fee of EUR17 per passenger per one-way journey, the airline’s ‘Delayed Arrival Warranty’ option gives passengers a guaranteed double refund of their ticket price (including fare and fuel surcharge) if the airline delivers them to their final destination more than 1 hour later than promised on their ticket. The refund is in the form of a gift voucher which can be used to purchase future flights with airBaltic. Valid reasons for receiving a refund exclude bad weather conditions at departure and/or arrival airport, strikes, terrorism, and war. On a similar note, Polish low-cost carrier Wizzair offers a, less generous, warranty delay option, and refunds EUR100 to passengers who bought a warranty for EUR10 in case of a two-hour delay. Read full article »
Brands team up with airports and airlines to let travelers try their products
17 September 2010 | Faced with ever more experienced consumers, who routinely ignore the commercials and ads thrown at them, brands have to find 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.” Airlines and airports are popular settings for tryvertising campaigns, which can also be an additional source of revenue for them or a way to improve service.
Marriott Courtyard Airport Lobbies
On September 8, the Marriott Courtyard hotel chain showed off its new ‘Refreshing Business’ lobby concept in New York’s Grand Central Station by installing a replica of the lobby in the station’s VanderBildt Hall. Train passengers could use the hotel lobby to relax while they waited for their train. From September 15 through November 14, 2010, Courtyard is also bringing its new lobby to life with the installation of temporary Courtyard Airport Lobbies in three of the busiest airports in the U.S. — Chicago O’Hare, Atlanta Hartsfield-Jackson and Denver International. Each of the lobby zones will feature some of the new furnishings and amenities found in the real Courtyard lobbies. Travelers can relax in the new lobby zone and also receive a complimentary Courtyard luggage tag. Read full article »
New ‘Sky Club Cafe’ at Delta’s JFK airport lounges offers premium meals for a fee
1 September 2010 | Freshly prepared a-la-carte restaurant dining is mainly a service offered by airlines such as Lufthansa, Air France, BA, Qantas, and Etihad to passengers in their dedicated First Class lounges. A select number of airlines, such as Virgin Atlantic and Cathay Pacific, serve full breakfast and meals to all guests in their airport lounges, while BA and BMI offer passengers the option to dine pre-flight so they can sleep longer in the air. In general, however, full-service airlines offer their premium passengers just a light self-service buffet service on the ground.
Responding to passengers requests for more substantial meal options in its lounges, Delta Air Lines has just opened a new café concept at four Delta Sky Club lounges at New York JFK Airport. The new full-service cafés offer made-to-order breakfast, sandwiches, salads, small plates and desserts for purchase, as well as premium beverages. Meals are USD10-15 and premium drinks USD12 and bring another source of ancillary income to Delta. The café include dedicated seating areas within the lounge, but visitors also can order from the menu and dine anywhere in the lounge. Delta emphasizes that it continues to offer members the same selection of complimentary snacks and beverages in its lounge.
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Entrepreneurial airBaltic extends brand to taxi and bike sharing services
23 August 2010 | In the last years, Latvian national airline airBaltic has made a transformation from a point-to-point low-cost carrier to a hybrid network LCC. The airline has turned its Riga hub into a connecting point for travelers from Nordic and Northwestern Europe to the rapidly growing markets of the former Soviet Union and the Middle East. airBaltic offers transfer its passengers (60% of customers) at Riga through ticketing and check-in, as well as 25-minute connection times, and other hybrid LCC features include a 2-class cabin, airport lounge, and a frequent flyer program.
airBaltic has been growing its network fast, adding 15 new routes in 2008, 11 in 2009, and 27 routes this year (for example adding smaller cities in Finland). In 2009, the airline carried 2.75 million passengers and according to AEA data passenger numbers grew 19% in the first 5 months of 2010. Besides this aggressive hub strategy, the company behind airBaltic, Baltic Aviation Systems, seems to be turning into a Baltic version of the easyGroup (of easyJet and easyHotel fame), using the airBaltic brand (simple, reliable, affordable, visible) to enter other markets.
In April 2010, airBaltic established its own taxi company, BalticTAXI, in order to improve the quality of the taxi business in the capital. Taxi drivers in Riga often charge too much for rides, which is damaging the image of Riga and Latvia. Citing a lack of government interest to improve the situation, airBaltic believed there was room for a new transparent entrant. BalticTAXI’s fleet of 120 Toyota Corolla Verso vehicles is staffed by professional uniformed drivers, and for example there is a fixed price for the journey from the airport to any location in Riga.
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Virgin America raises the bar (again) with new IFE features
29 July 2010 | Virgin America has upgraded its ‘Red’ in-flight entertainment system with a number of innovative features, including the first ever seatback digital shopping platform, an open tab service, and Google Maps with terrain view. Already on Virgin America, passengers can use the IFE system to watch live satellite television, chat with other passengers, play 3D games such as Doom, and offset carbon emissions for their flight. Passengers can also purchase snacks, meals, and alcoholic beverages from their seats via Red. Flight attendants receive the orders via a tablet PC and bring the ordered items to the seat.
The boutique airline is the first U.S carrier to eliminate the traditional Skymall print shopping catalogues, moving it to the seatback screen instead. Called ‘The Red Store’, passengers will be able to buy a range of products – some unique to Virgin America – via the touch-screen display or the Qwerty keyboard in the armrest. Products range from the Sony PSP to the latest Michael Kors tote, and shoppers also earn ‘Elevate’ frequent flyer points. To pay, passengers swipe their credit card through the reader in the IFE system and their purchases are delivered to their home or destination address seven days later. Read full article »
ANA first airline to serve freshly tapped beer in-flight
19 July 2010 | Airlines are increasingly making an effort to use fresh ingredients in their in-flight meals, or try to figure out ways to prepare parts of the menu freshly on board. For example, ANA, JAL and Cathay Pacific serve freshly cooked rice in-flight, using an onboard rice cooker. Cathay Pacific long-haul aircraft also have a toaster oven and an espresso machine on board, while kitchens on SWISS aircraft and Lufthansa’s new A380 are equipped with an in-flight Nespresso machine.
Now, All Nippon Airways (ANA) is taking its in-flight beverage service up a notch by serving freshly tapped beer on select flights. ANA is the first airline to offer beer on tap during flights. Draft beer comes out of a keg, using highly pressurized carbon dioxide gas, and couldn’t be served before because airlines are prohibited from bringing high-pressure gas cylinders onboard due to safety regulations. ANA worked with ice machine and refrigeration specialist Hoshizaki Electric to develop a special beer dispenser that uses carbon dioxide gas vaporized from dry ice to power the mini beer kegs. Read full article »
Thai Airways’ catering division launches ‘off-flight’ catering brand
1 July 2010 | ‘Puff & Pie’ is a bakery chain owned by Thai Airways Catering. Until recently, the 81 outlets across Thailand primarily offered a wide range of bakery items and beverages served onboard Thai Airways (THAI) and produced by the airline’s catering facilities. THAI Catering has just announced it will expand the product range at the Puff & Pie bakery chain in an effort to generate additional revenues to its regular airline catering operation.
Puff & Pie will offer a range of Thai and Chinese take-away meals, seven kinds of ready-made curry sauce and five styles of salad dressing, which are also used in THAI in-flight meals. The products will be sold under the airline caterer’s new ‘Eurng Luang’ brand and will initially be available at its Bangkok, Chiang Mai and Phuket Puff & Pie Bakery shops. THAI says it is aiming for the business traveler who had a good in-flight culinary experience, but has no time to prepare quality Thai food at home. Read full article »
Pop-up stores and airline shops – the latest in airport retail
25 June 2010 | Several new initiatives in airport and airline retail have caught our eye recently, most notably airports opening dedicated retail spaces for temporary shops and airlines opening physical duty free stores.
Pop-up shops, stores that only open for a limited time, have been a major retail trend in the past years. Airlines such as Delta, Southwest and Jetblue, and tourist boards from Atlantic City and New Zealand, have been runnning temporary spaces in New York and Tokyo. However, the temporary stores phenomenon hadn’t reached airports yet, but now Narita and Glasgow airports have opened dedicated retail spaces where shops come and go.
Narita Airport opened a temporary Crocs footwear store on 28 April 2010, located landside at the airport’s Terminal 1. Crocs will operate the 30m2 store at the airport for 3 months until 29 July in the run-up to the summer travel season. For Narita Airport the Crocs shop is the first in a planned series of temporary stores at the airport that aim to capitalise on seasonal demand and special events. Tokyo Narita has created a dedicated space for the temporary stores at the 4th floor of T1. Read full article »
Advertiser sponsors free snack box for Horizon Air passengers
7 June 2010 | 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 inflight Wi-Fi or Starbucks coffee for free.
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’s first campaign was launched on May 24th on Horizon Air flights between Seattle and Portland. The branded snack box contains a bag of pretzels, chips and a chocolate, and is sponsored by Creative Labs. The electronics company is using the new ‘snackvertising’ medium to promote a Facebook contest to name its new HD video camera. Flight attendants alert passengers on board that their meals are complimentary of Creative Labs, and 25,000 boxes will be distributed during 20 days on the route. Read full article »
Jetstar first airline to test iPad as in-flight entertainment device
2 June 2010 | Last week we reported on Bluebox Avionics, who has turned the iPad into an in-flight entertainment device. The first airline to test the ‘bluebox ai’ is Jetstar, the low-cost subsidiary of Qantas. The carrier has just announced it will offer iPads for rent on select domestic routes in a two-week trial later this month.
Passengers can rent an iPad for AUD10 (USD8.50, EUR7.00) for the duration of their flight, and watch new release movies, tv programs, and music videos, play game, read eBooks, or listen to music. Jetstar is also looking to add its in-flight magazine to the tablets. Internet browsing will be disabled as Jetstar does not offer in-flight Wi-Fi. The carrier says it has bought several hundred iPad devices, and thirty units will be available on each test aircraft.
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ANA charges for drinks on domestic flights, teams up with Starbucks to serve free coffee
1 June 2010 | Seeking to cut back on its operational costs, ANA on April 1st 2010 started to charge passengers in economy class on domestic flights for all drinks other than water and green tea. Instead, passengers can purchase drinks from ANA’s ‘My Choice’ paid catering menu. Beverages available for sale include premium mandarin orange juice, Darjeeling tea and onion gratin soup. Wine, champagne, sake and shochu served in ANA’s business class are also sold in economy.
Two weeks after introducing its paid drinks policy on domestic flights, ANA teamed up with Starbucks in a ‘tryvertising’ campaign to promote the launch of Starbucks new VIA instant coffee brand in Japan. Since April 14, the day Starbucks launched its VIA coffee brand in Japan, ANA has served complimentary Starbucks VIA coffee on domestic routes. The free coffee service has just ended on May 31st, and ANA now charges 200 yen (USD2.20, EUR1.80) for a cup of Starbucks Via.
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KLM pilot gives long-haul economy passengers option to order a premium meal
27 May 2010 | KLM has launched a pilot in which economy class passengers onboard its long-haul flights get the option to purchase a premium ‘a la carte’ meal, instead of the usual free meal service. The paid ‘a la carte’ menu includes a healthy Japanese meal, a tray with Italian delicacies, an Indonesian rice table, and a sustainable menu of organic chicken, vegetables, and cheeses.
Economy passengers that have pre-ordered a premium meal will also be served first. Dishes cost EUR15 each and can be ordered and paid for when checking in online between 30 and 24 hours prior to departure. KLM says the goal of the paid premium catering option is to provide more choice for its wide range of passengers. The pilot will run until the end of August 2010 on flights from Amsterdam to Dubai, Cape Town, Bangkok/Taipei, and Singapore/Denpasar.
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Southwest ‘plane-vertises’ its bags fly free policy
26 May 2010 | While some low-cost airlines don’t shy away from turning their aircraft into flying billboards, Southwest Airlines is using its most visible assets – airplanes and ground support equipment – in an innovative way to advertize its ‘Bags Fly Free’ policy. The airline has put a “Free Bags Fly Here” slogan on more than 50 aircraft with an arrow pointing to the cargo bin, and also tagged around 1,000 luggage carts across its network with banners that say “I Carry Free Bags.”
Aimed at anyone who looks out the terminal window or the window from their airplane, Southwest’s ‘planevertising’ initiative is a smart way to target people at the time when they are most unhappy about having had to pay bag fees.
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Apple’s iPad to be turned into in-flight entertainment device
24 May 2010 | With more than 200,000 iPads sold per week in the U.S alone, and passengers bringing their own iPad with them onboard, the device could be a good solution for carriers without an AVOD in-flight entertainment system. With a 9.7-inch screen (about the size of an IFE screen), iPads are small, portable, give the user control over what they want to watch, listen, read or play, and are far more versatile than current AVOD handhelds. Their 10-hour battery life is good for most long-haul flights, while re-charging them is easy.
Bluebox Avionics, a company that offers in-flight entertainment products to airlines, has announced the ‘bluebox Ai’, the industry’s first iPad in-flight entertainment device. The Bluebox iPad comes pre-loaded with movies, music, games, eBook, consumer magazines via Zinio, and custom apps for each airline. The Bluebox application also connects the iPad to a portal created for the airline, and if the airline has in-flight Wi-Fi, the iPad will also be fully web-enabled. Read full article »
