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Inflight Ancillaries: How airlines can monetize their inflight engagement platforms

As ancillary revenues are on the agenda of every airline, much has been written and said about the grand vision of airlines as omni-channel retailers, in which the in-flight part is just another touchpoint in an end-to-end, personalized, seamless, digital travel eco-system.

However, as airlines are only just embarking on this merchandizing journey, we take a look at the current state of inflight retail, which sees the opening up of a cabin environment that was previously ‘closed’ because of proprietary IFE platforms and the lack of Internet connectivity.

From In-Flight Entertainment to In-Flight Engagement platforms

Android-based in-seat IFE platforms, wireless IFE, Internet connectivity, plus the large number of passengers – and increasingly cabin crew as well – that carry a digital device, provides airlines with much more control how to move beyond providing just entertainment to new opportunities to generate ancillary revenues in-flight.

Jeff Standerski from Rockwell Collins summarizes this evolution nicely: “Passengers’ expectations have evolved from a passive ‘Please entertain me’ to a proactive ‘I want to entertain myself’. Our industry needs a new term to describe a holistic experience that is equal in every way to how people leverage their devices on terra firma. The future of the passenger/cabin interaction is beyond one of mere entertainment and can be more accurately described as one of deep and ongoing engagement: In-Flight Passenger Engagement.”

A similar vision is painted by Thales CFO Fred Schreiner: “We are going to go into a period where it’s about engagement. How do we move from an in-seat system, where an airline is looking at cost line, to an in-seat solution coupled with connectivity that moves to a revenue line?” Schreiner said families will be able to plan their holidays from the seatback: booking restaurants and exploring street level views of a city’s sights.

Eventually this means that this new ‘inflight engagement platform’ – be it seatback systems, inflight wireless portals or mobile apps – will become another touchpoint in the airline travel ecosystem. Read full article »

Delta partners with Uber-inspired package delivery platform Roadie to deliver delayed luggage to passengers

Delta in 2011 became the first airline to make the baggage process more transparent for passengers with its ‘Track Checked Bags’ service. Delta passengers on domestic flights can track their checked bag(s) in real-time via the Delta app, even when up in the air.

Plus, Delta’s ‘Bags On Time’ guarantee means that passengers on domestic routes will have their checked luggage at the bag caroussel within 20 minutes, or receive 2500 SkyMiles when this takes longer.

Delta in 2016 also invested USD 50 million in RFID technology to further expand is bag tracking service to international stations. RFID scanners, RFID bag tag printer, and RFID pier and claim readers have been installed in 344 stations worldwide, which has resulted in baggage tracking that is 99.9 percent accurate.

With sharing real-time bag tracking with passengers still being a novelty in the industry, Delta has further innovated its baggage service to include delayed luggage.

Delayed baggage claim via Delta app
Earlier this year, Delta expanded its Fly Delta app functionality to allow passengers to skip the bag service office visit when luggage is missing.

The mobile bag service feature allows passengers to file a bag claim at their final destination through the Fly Delta app, instead of having to visit the local Delta baggage service office, when Delta sees the bag has missed a checkpoint. The airline proactively notifies passengers if their bag will be delayed, and provides a link to complete a delayed bag file with the app.

“This is one more way we’re putting the power for a customer to control their experience in the palm of their hand,” commented Delta’s Chief Operating Officer, Gil West. “The last thing a customer wants to do when their bag is delayed is to go in person to do something that can be done with a few taps on their phone, knowing that we’ll deliver their bag directly to them when it arrives.” Read full article »

China Airlines mobile app lets passenger pre-order duty free, pre-select meals, and book high-speed rail tickets

Passengers, spoilt by availability of user-friendly apps on their smartphones that allow them to manage many parts of their daily life, are raising the bar for airline apps to become more relevant as well.

Digital travel companion
At the same time many airlines are working to evolve their app into a ‘digital travel companion’ in order to extend their service beyond just flying passengers from A to B, and generate some ancillary revenues in the process.

Describing its mobile app as a “personal travel secretary,” China Airlines’ app features innovative functionality that goes beyond the regular airline app basics of searching, booking, seat selection, check-in, and flight status.

Ancillaries, recommendations
Besides offering passengers the option to purchase ancillary services such as excess luggage and in-flight Wi-Fi, the China Airlines app provides recommendations on destinations and duty free items. The suggestions are based on the data of passengers who are logged into the app and uses elements such as the flight history and duty free purchasing records of members – as well as data of members with similar attributes – to generate personalized recommendations.

Duty free items can be purchased via China Airlines stand-alone SkyBoutique duty free app, which is accessible linked to the main China Airlines app.

Pre-select Business Class meal
Many airlines today – ranging from Singapore Airlines to American Airlines – give passengers in Business with the option to pre-select their meal. This gives frequent travellers more meals to choose from, while it allows the airline to plan and load more efficiently and reduce waste.

However, several airlines still only allow passengers to pre-select their meal via the website, or even the phone, while this kind of service is a typical mobile app feature, as it offers passengers a convenient way to add their preferred meal to their booking in the run-up to their flight.

Similar to Qantas and Qatar Airways (among others), China Airlines Business passengers can select their preferred meals via the mobile app and choose from 10 different meals to pre-order 14 days to 24 hours before departure. Read full article »

Qantas lets lounge visitors order their coffee via their smartphone

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Taking a cue from Starbucks’ mobile ordering service, as well as fellow down-under airline Air New Zealand’s coffee ordering service, Qantas recently introduced a new service at its lounges across Australia that invites lounge visitors to order their barista-made coffee via their smartphone.

In an effort to offer peace of mind to busy travellers who have navigated traffic and queues at security before having to line up again in the lounge to get a barista-made coffee, Qantas has partnered with Skip, a free app that helps customers “skip the queue” by ordering and paying for coffee and food.

In the Qantas Clubs alone, baristas brew over 1,000 cups of tea and coffee every day. In an average week the Sydney Qantas Club sees the biggest demand for coffee, with 6am to 7am being the peak demand time.

The mobile ordering service has been available since July 2016 and the Skip app can be used to order coffee at Qantas Clubs and Business Lounges at Adelaide, Brisbane, Canberra, Melbourne, Perth and Sydney domestic airports.

Qantas passengers using the Skip app can also select the time they want to collect their coffee and receive a text message when their order is ready. In addition, touchscreens have been installed around the lounges so those who aren’t Skip users can order before walking up to the bar.

According to Skip general manager Bill Bizos during the soft launch most people preferred downloading the app to using kiosks. Read full article »

Finnair turns its inflight wi-fi portal into an e-commerce platform

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By Marisa Garcia

Last year, Finnair committed to a fleet-wide investment in inflight connectivity, valued at USD33 million. The service was first made available on the airline’s new A350 aircraft (of which it currently has five in service), and further installations will continue through 2018 on both Finnair’s long- and short-haul fleets.

While some airlines still ponder the business case in favour of giving customers the wi-fi connectivity they want onboard, Finnair provides passengers in Business Class with free inflight wi-fi and has put its new ‘Nordic Sky’ inflight portal to work as a channel to offer new services to flyers, as well as boost ancillary sales.

The portal can be accessed on passengers’ own devices and gives all passengers free access to finnair.com, plus Finnair services such as destination information, customer care and pre-order duty free shopping— with items purchased being delivered to the passenger’s seat on their return flight.

Reviving duty free sales
This onboard retail strategy is a departure from the tired trolley product push which has been part of the in-flight experience for decades. Technology allows Finnair to promote shopping opportunities while letting passengers enjoy the journey and letting cabin crew focus on more critical functions of passenger service and cabin safety.

“That’s why we’re using technology, the IFE, the portals we have. So that, if you want to shop, we enable that through the technological platforms we have onboard,” Finnair’s chief commercial officer Juha Järvinen told APEX last year. “We shall not increase the number of trolleys going back and forth in a corridor. That’s what you don’t want. The IFE technology and the wi-fi platforms enable you to do your shopping when you want, at your discretion.” Read full article »

Meeting the expectations of today’s connected passengers: On-demand, real-time, end-to-end

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By Raymond Kollau, airlinetrends.com                                                                      This article also appeared on the WTCE blog

Expectations of airline passengers are not only shaped by how well an airline performs versus its direct competitors. They are also fuelled by standards set by experiences that consumers have in other industries, as innovative products and services in one industry raise the bar for all industries. This means airlines and airports need to tune into the customer from a holistic perspective when designing the passenger experience.

At this year’s Passenger Experience Conference – which is part of the annual Aircraft Interiors Expo/WTCE in Hamburg – AirlineTrends delivered a presentation about ‘Digital Innovation and the End-to-End Passenger Experience’. Below is the outline of our talk, illustrated by a few examples of how airlines are tapping into the changing consumer behaviour and expectations of today’s connected travellers.

On Demand
As smartphones make it quick and hassle-free to order goods online, flag a taxi via Uber, or what have you, the on-demand economy has generated a sense of entitlement to fast, simple and efficient experiences as it taps into consumers’ appetite for greater convenience, speed, and simplicity. For example, analysis from Uber shows the longer Uber has been in a city, the less willing to wait for a car everyone becomes.

In the food and beverage industry, Starbucks’ new pre-order app has become a very popular time-saving service, while airport restaurateur OTG has installed thousands of food-ordering iPads at half a dozen U.S. airports.

And a growing number of airlines – including Virgin America, Air New Zealand, Japan Airlines, Norwegian, Azul – allow passengers to order meals, snacks and drinks via the in-seat IFE system in between regular meal services, while Qantas and EVA Air offer passengers the option to purchase duty free via the Panasonic eX3 IFE systems. Passengers onboard leisure carrier TUI Netherlands can even order drinks and duty free via their own smartphones. Read full article »

Qantas Frequent Flyer launches health insurance; members can earn miles by excercising

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By Raymond Kollau, airlinetrends.com

Many airline passengers lament the traditional loyalty program format, which has become somewhat antiquated and can take forever to produce any useable benefit. But in a new loyalty tie-up with Aussie health insurance provider nib, Qantas is demonstrating that it understands how to engage people in a digital world.

Beginning later this year, Qantas Frequent Flyer program members can purchase Qantas Assure, a range of health insurance products powered by nib. Those who sign up can also earn Qantas Points faster than with flying alone, because they will collect points for achieving fitness goals.

Mobile app
Qantas Assure customers will be able to download an app to a number of different wearable and mobile devices.

Using the app, members will be able to choose from a variety of daily or weekly targets depending on their lifestyles, with the number of frequent flyer points earned increasing with the size of the target. The app will monitor (by counting steps, for example) the customer as he or she progresses through the challenge and reward completion with Qantas Points that can be used on flights, upgrades, hotels, car hire, at the Qantas store, and more.

Eventually, points will be able to be earned for other forms of physical activity beyond walking and running. Qantas says its Assure plan will start with health insurance, but will expand to other types of insurance in future.

Popularity of fitness trackers
According to the Sydney Morning Herald, Qantas said there were estimates around one-quarter of Australians now own a fitness tracker, but fewer than one in five Australians took the recommended 10,000 steps per day.

Qantas Loyalty chief executive Lesley Grant said the idea behind Qantas Assure came from members saying they wanted to be rewarded for leading a more active lifestyle. About half of those polled during research said they would be more active if they were rewarded. Read full article »

Air New Zealand to track unaccompanied minors via digital bracelet and mobile app

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By Raymond Kollau, airlinetrends.com

The ubiquity of personal devices, the availability to be connected anywhere, and the self-service mindset of travellers, has created a momentum that sees many of today’s passenger experience innovations taking place in the digital realm.

For example, Air New Zealand – already noted for its adoption of digital technologies – recently announced it has created the new role of ‘Chief Digital Officer’, as part of a rethink of how the airline approached digital innovation.

The New Zealand Herald also reports that Air New Zealand has just unveiled a host of digital novelties aimed at removing customer pain points, and is working on the development and introduction of permanent digital bag tags, biometric scanners for luggage dropoff, electronic departure cards, and a tracking system for kids flying alone using digital wristbands.

Some of these digital services will be introduced at the end of the year, while others are being looked at as a possibility for the future.

Tracking unaccompanied minors
One eye-catching innovation are the digital wristbands for unaccompanied minors (kids who are flying without their parents). Taking a cue from Disney’s ‘Magic Band’, Air New Zealand is planning to introduce an electronic tracking system for the 28,000 unaccompanied minors it carries per year. The high-tech bracelets replace a paper system and aim to provide parents with more peace of mind, as they will be able to receive real-time information on where their child is during the journey.

How it works: According to the NZ Herald, unaccompanied minors will be offered a silicon wrist band in the colour of their choice which contains a chip that connects to a mobile application.

The app will allow Air New Zealand employees to easily identify the child and send intermittent text messages to parents and family of the child, notifying them where their child is in the flight process and how they are doing. Read full article »

China Eastern trials ‘intelligent personal assistant’ for in-flight service

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By Kai-Chin Shih, >talkairlines

As airlines around the world are currently in the process of developing an digital inflight infrastructure (e.g, Internet connectivity, aircraft intranet, inflight portal) and the latest generation of in-seat IFE systems has adopted the Android platform, the next phase for airlines is to develop innovative applications that differentiaite to the passenger experience.

For example, on the IFE system of its new B787 Dreamliners, Air New Zealand and Panasonic have created a ‘digital crew call button’ app that lets passengers message the crew, as well as a dedicated digital button to order a glass of water and have it brought to their seat.

Similar functionality has now also been rolled out by China Eastern – China’s second largest carrier by passenger numbers. The airline is not using the seat back IFE system, though, but has partnered with Microsoft to develop an airline-specific version of Microsoft’s ‘XiaoIce’ (東航小冰) intelligent personal assistant.

Intelligent Personal Assistants
‘XiaoIce’ – which translated a ‘Little Ice’ – is an intelligent personal assistant (IPA) launched by Microsoft in 2014. IPAs are software programs that can complete tasks assigned by the user or provide answers to users’ questions.

Currently, the most widely known IPA is Apple’s Siri, which uses voice recognition to send messages, make calls and obtain answers to simple questions, such as those related to the weather and historical facts, on behalf of users.

Microsoft also has developed its own IPAs, respectively called Cortana and XiaoIce. While Cortana provides functions similar to that of Siri and can only be accessed through Windows-based devices, XiaoIce has been developed to be used on social media sites such as Sina Weibo, can be used virtually anywhere. XiaoIce learns from not only past conversations with the user but also those from all around China. With these resources, it can engage in very life-like conversations and has a bit of a funny character of its own. Read full article »

Airlines encourage passengers to provide service feedback via apps and cards

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This article earlier appeared in Onboard Hospitality Magazine.
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By Raymond Kollau, airlinetrends.com

Social media has provided passengers with a powerful platform to voice their opinion on the experience they have with airlines. In response, airlines have become one of the most active organizations that actively monitor the online conversation in order to pro-actively take actions to correct issues if needed.

However, instead of just waiting for passengers to share their experiences (both good and bad) online, several airlines have also started to encourage passengers to provide their feedback about the service they encounter in real-time.

KLM ‘Feedback App’
We have reported before on KLM’s mobile ‘Feedback’ app that allows the airline’s passengers to give real-time feedback on how they perceived the experience at a specific area (check-in, lounge, boarding, arrival) at one of 13 participating airports the airline’s network. The rating consists of simply tapping a ‘thumps up’ or ‘thumbs down’ button, but passengers can also specify their rating with a comment. Meanwhile, KLM team leads and station management at participating airports have been equipped with iPads that enables them to monitor the feedback in real-time, so they can react on passenger feedback immediately if needed and possible.

United ‘Outperform Recognition’
Following its merger with Continental, United Airlines launched a a service recognition program, called ‘Outperform Recognition’ in mid-2012, that invites United MileagePlus members to submit up to five nominations every four months through a variety of channels, including United’s mobile app, mobile website and Facebook page. Each period the airline selects 101 eligible employees randomly from the pool of eligible submissions, who receive a financial bonus of between USD 2,500 and 50,000. The first edition of the program (second half of 2012) received over 9,000 nominations.

The option to recognize excellent service through the mobile app [screenshot] is the most innovative part of the initiative as it provides passengers an easy way to express their satisfaction on the spot and in real-time – especially since United has equipped the majority of its domestic fleet with inflight.
Read full article »

Air France KLM ‘employs’ frequent flyers as mystery shoppers

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By Raymond Kollau, airlinetrends.com

One of the best ways for companies to gain insight into their customers’ experience is through mystery shopping audits. Many people love to take part in mystery shopping – especially when this allows them to travel by air – as it lets them have their say and opinion on the level of customer service they receive and feed their experiences back to the company involved.

Air France KLM ’Quality Observers’
Many airlines employ mystery flyers and in return for valuable insight into the daily runnings of the flights provide undercover flyers with a free flight and paid-for expenses.

Air France KLM has come up with an innovative twist for its mystery flyers program and is introducing a new so-called ‘Quality Observer’ program. Instead of employing mystery shoppers, the Quality Observers are recruited from the airlines’ community of Flying Blue members.

Within the program, Elite members from the airlines’ Flying Blue loyalty program will be randomly invited to join the Quality Observer community and participate as mystery flyer during their travel, according to booking data and the pre-set Quality Observer coverage and frequency needs per station.

This joint Air France KLM program is designed to objectively observe and measure if product and services are delivered according to pre-set specifications at every customer point of contact during the actual journey (booking/call centers are planned to be added next year). According to Air France KLM, the aim of the Quality Observer program is to ensure a worldwide consistency in quality of service delivered to its passengers.

Mobile app
A special Quality Oberver app (both for iOS and Android devices) is made available for the Quality Observers. To be able to use the application, Flying Blue members need to be registered as a Quality Observer with AFKL, which is by invitation only.
Read full article »

How data, connectivity and a retailing mindset help increase onboard revenues

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By Raymond Kollau, airlinetrends.com

The combination of rapid developments in consumer electronics, the acceleration of wifi installations onboard aircraft, and the large number of passengers carrying one or more digital devices, is creating a momentum that sees many of today’s inflight innovations focus on digital developments.

In this three-part series on how new technologies are improving the onboard passenger experience, airlinetrends.com founder Raymond Kollau takes a look at some of the major initiatives and innovations that are the result of this convergence. The first article discussed how inflight connectivity provides passengers and crew with real-time information up in the air, the second article highlighted the latest in inflight entertainment, and this last part focuses on onboard ancillary revenue generation.

Ancillaries: Maximising Revenue Per Seat
As ancillary revenues have become a major revenue source for airlines – if not the lifeline for many – airlines are thinking of more ways to derive revenue from all phases of the customer journey, in an effort to add high-margin ancillary sales to low-margin air revenue. Over the past few years, airlines have monetized baggage, seat selection and meals, and have come to recognize there is a wide array of merchandise they can sell onboard.

Or as the New York Times puts it nicely: “The great advances in technology presents for airlines themselves to essentially sell more things to the customers, whether the product is in-flight entertainment, food and drink, customized services to elite-status passengers or products at the destination, including hotel packages, sports and concert tickets, restaurant and theater reservations. On an airplane, you have a captive market, and with sophisticated technology, you can sell to passengers in very personal ways.”

Airlines as Retailers
However, the airline retail model is still in its infancy. Travel retail solution provider Datalex believes that airlines have only reached the tip of the ancillaries iceberg, as their opportunities for growth include selling a much broader range of products and services before, during and after the flight. Says the company’s CEO, “The airline industry is rapidly evolving to become retail-focused and airlines will have to reinvent themselves as retailers. Airlines could learn a lot from retail chains like WalMart and Tesco, especially when it comes to offering the right product to the right customer at the right time.”
Read full article »

Passengers on Delta’s ‘Beta Plane’ can submit their ideas via Wi-Fi

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By Raymond Kollau, airlinetrends.com

We have reported several times before how airlines and airports are teaming up with the general public in order to generate ideas for new products and services.

As this trend matures, airlines such as KLM, SAS and Finnair have gone beyong incidental crowdsourcing campaigns by launching broad co-creation programs to improve the passenger experience.

KLM ‘Bright Ideas’, for example, asks Facebook fans to share and discuss their ideas to improve KLM’s products and services. Scandinavian Airlines’ ‘My SAS Idea’ is an online community where anyone can share their ideas and others can join in to further improve on each idea. Finnair’s Quality Hunters – now in its third year – invites a select group of enthusiasts to come up with ideas which are then shared online with the larger community.

Delta ‘Ideas In Flight’
In 2011, Delta teamed with “scientists and thinkers” conference TED (slogan: “Ideas Worth Spreading”) to generate innovative crowd-sourced ideas to improve the travel experience. Called ‘Ideas in Flight’, the program uses curated TEDTalks as thought-starters to inspire participants across technology, entertainment, design, etcetera. Ideas could be submitted through a dedicated tab on the Delta Facebook page.

In February of this year, Delta launched the second edition of Ideas In Flight. Similar to the 2011 edition, any Delta Facebook fan could contribute via Delta’s Facebook page and a voting system allows Delta and users to see what ideas are popular, and which ones will be considered to be implemented on the flight.
Read full article »

AirBaltic’s BalticMiles app rewards frequent fliers for burned calories

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By Springwise

Nike Mexico’s Subasta de Kilometros campaign has already offered runners the chance to use their tracked miles to bid on sports equipment. Now, the Burn The Miles app is using a similar idea by giving rewards to frequent fliers who jog enough to burn off the same number of calories as miles they’ve flown.

The app was developed by communications agency MRM for airBaltic’s loyalty program Baltic Miles, which rewards frequent fliers with points to exchange for flight tickets and products and services at partner businesses depending on how far they’ve traveled.

Those downloading the app are challenged to match every mile they fly with a calorie burned in the space of 24 hours after they land, tracked using the smartphone’s built-in accelerometer. If they manage to do so, they will be able to win further prizes. The program encourages those whose work requires them to sit on aeroplanes for extended periods to reserve some of their free time to exercise.

Since frequent fliers often have busy lifestyles, the app provides an incentive for users to keep themselves fit. This case study and video explain more about the scheme.


KLM ‘Feedback App’ lets passengers rate their level of satisfaction at the airport

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By Raymond Kollau, airlinetrends.com

KLM is known for its embrace of digital technology. The airline is a leader in social media and in the past years has launched a series of specific mobile apps, such as a ‘Passport’ app, which lets users record their journeys with their mobile phone and share their experiences via Facebook.

Real-time feedback
KLM’s latest mobile app allows the airline’s passengers to give real-time feedback on how they perceived their experience at the airport (e.g, check-in, lounge, boarding, arrival).

The option to provide direct feedback about the quality of service at airports isn’t entirely new. Singapore Changi, for example, has installed an instant feedback system that lets airport users rate service on the spot. The airport uses the real-time feedback to address issues immediately and to reward employees for good service. Travellers at Phoenix International Airport, meanwhile, can rate the cleanliness of the toilets by scanning a QR code.

KLM’s Feedback app, however, marks the first such initiative by an airline. According to the carrier, the objective of the Feedback app is to increase passenger involvement during the ground stage of their journey in order to improve the passenger experience at the airport.

How it works
After downloading the app, which is available for both Apple’s iOS and Google’s Android, passengers first choose the airport they are currently at (13 airports are supported at the moment: Amsterdam, Accra, Almaty, Athens, Cape Town, Curacao, Geneva, Jakarta, Kuwait, Singapore, Tokyo, Toronto and Vancouver) and then choose the area (check-in, lounge, boarding, arrival) and sub-area they want to rate.

The rating consists of simply tapping a ‘Thumps Up’ or ‘Thumbs Down’ button, but passengers can also specify their rating with a comment. Interestingly, the app also allows for the feedback to be published on Twitter at the same moment. Pasengers can rate each sub-area once a day and can also view how other passengers rated this area within the last 24 hours.

KLM team leads and station management at participating airports have been equipped with iPads that enables them to monitor the feedback in real-time, so they can react on passenger feedback immediately if needed and possible.

Says Gerard-Pieter de Haas, Director CRM at KLM, “Our staff is very excited about the feedback app as it helps them to take immediately corrective action and recover the required service levels for each touch point. Moreover, we can capture this experience and relay to other touch points – like Check-in, Lounge, Transfer or even Inflight – so staff can take immediate action if needed. This fully fits our CRM-vision of ‘connecting the dots’ and really puts the customer in the center of our attention.”
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