I don’t actually believe for a second that the answer to the headline I wrote is ‘yes’ as I’m still seeing so many airlines not understanding how to correctly apply the bow tie model to the way they sell certain ancillary items. This is a proven way to increase revenue from hotels; but it is clear that in certain categories of ancillary revenue, the sky is not all blue.
Here is the statistic of the week, if not the month, from Portfolio. “But here’s an indisputable truth: The more baggage fees that the big airlines pile on their customers, the faster their overall revenue is collapsing. In fact, the only carriers that escaped a double-digit revenue decline in the second quarter were the two that still allow all passengers to check at least one bag for free.”
And then a quote from Flight Global. “Row 44′s announcement comes at a time when a growing number of industry stakeholders are questioning the viability of fee-for-service models for in-flight Internet.”
And thirdly, you have the article at Aviation Week from the recent LCC conference in Barcelona where a number of carriers are expressing concern over the growth potential of ancillary revenue.
Three different sources in less than a week echoing the same theme makes me wonder if the buzz is fading from the buzzword (well, two words really) that is ancillary revenue. When I was presenting last week at the Amadeus Airline e-Commerce customer conference in Cannes I made the point about how when I joined the company in 2005 meta-search was the hot topic everyone wanted to talk about, then dynamic packaging took over for a while, now it is ancillary revenue, but what will be the next “flavour of the month” buzzword to get backsides on seats at industry conferences? Maybe social media, but the jury is definitely still out on that one. Speaking of the Amadeus conference in Cannes, I know I’m not seen as that impartial, but it really was the best airline conference I have ever attended. I’m trying to get permission to publish some of the photos taken by the official photographer, and I’ll definintely be writing more about this conference in the coming days.