I’ve seen the RSVP numbers and they are looking good for the Amadeus Horizons airline conference in San Francisco in mid October - as a result, I’ve also started thinking more about the session I am hosting on ancillary services, and ensuring it delivers interesting and thought provoking content for those executives in attendance. I’ve copied references below to a few pieces I have seen in the last week or so that I have been finding interesting. With US passenger airlines reporting seven straight months of increased passenger revenue times are better now than they have been in a while, but a good ancillary revenue strategy will make the good times better, not mention the protection it offers during the bad times.
The most comprehensive article I saw recently was a USA Today summary of what various US carriers are doing with unbundling in their offers to pasengers:
“We believe premium coach is the fastest-growing segment of the business and leisure” market, says Robin Hayes, executive vice president and chief commercial officer for JetBlue. “Business travelers are … happy to pay $10, $20, $30 (for an) upgrade, but they don’t want to be gouged. In terms of leisure travelers … many of them are willing to pay a small premium to sit in an additional-legroom seat.”
And it continued,
“This is about offering passengers options to enhance and personalize and individualize their travel,” says Tom O’Toole, senior vice president and chief marketing officer for United, who says certain options have dramatically increased passenger satisfaction. United’s Economy Plus, starting at $9 per flight, gets you a seat near the front of the economy cabin with extra legroom. The Premier line package, starting at $19, lets you check in, go through security screening and board more quickly. Its Choice Menu offers coach passengers on most North American flights such selections as a Thai chicken wrap, an assorted cheese tray or gourmet chocolate. For $35, any passenger can purchase a day pass to the Red Carpet Club, United’s elite-traveler lounge
In addition, there was news of AirTran upping their first check bag fee from $15 to $20 and American Airlines adding a new fee for what they are calling Express Seats - those near the front of the economy/coach cabin.
Express Seats will be available only via the airport self-service check-in machines from 24 hours to 50 minutes before departure for flights
That quote above probably indicates a fulfillment issue, as I’m sure they would love to integrate their merchandising efforts more tightly into the booking flow. It is possible, but it definitely increases the complexity when it comes to managing the inventory schedule changes and equipment changes, plus the voluntary changes as requested by the passsenger – and a whole lot more on top of that such as correctly defining fare families and the multi-channel opportunities. It really illustrates the need to think about merchandising in a much more integrated way than most people think of it today. The tactical moves are good, as no-one should ever wait for the IT solution to stop evolving (ie. wait until it is perfect) before moving, but every airline really needs to be thinking beyond the tactical when it comes to merchandising. This topic is only getting bigger and more valuable as time progresses.
And this brings me back to the topic of the panel for Horizons. I’m always preaching the benefits of social business (although much less here these days than in the past) and part of this involves engaging with the community and genuinely listening to what people want. Don’t be surprised if you see a poll on this blog in the coming weeks. I’ve never run one here before but I think this might be the right time to try it. The idea would be to have readers give some input into what some of the focus of the Horizons panel should be. If you talk the talk, you really must walk the walk.
The current title is Ancillary services: the multi channel approach and delivery dilemma solved, so as you can see, it gives me plently of scope to work with. The only thing holding me back from putting a poll up on the site today is that I’m not convinced what the exact question and then the response choices should be. Naturally I already have a very clear idea for the topic I intend to cover on stage with my two industry experts (names to be disclosed later), but if you have any views on how a reader poll on this site could be run I would love to hear them (privately, or via a comment). I’m mainly looking for what the one question should be (concise yet compelling and with clarity), and then suggestions for the 3-5 choices offered as responses to that question.
Remember who is hosting the conference, so no immature wisecrack anti-GDS suggestions please.