Questioning the travel industry status quo, one blog post at a time

Posts Tagged ‘Ancillary Revenue’

FLX-M Use Case Challenge

There are many universal truths in life: money isn’t everything, laughter is the best medicine, and so on. I think another one is that people really love a good meal. And for decades another universal truth was that airplane food was bad. But that’s all changing! Today, airline meal options are plentiful and tasty. Airlines are going gourmet and some even have culinary delights from celebrity chefs!

The power of meals to differentiate an airline’s brand – and drive revenue – has made this a popular Use Case topic, and so we’ve decided to feature an example. So, how does an airline approach premium meals for Economy Cabin?

Like any product offering, there are a few basic questions for the airline to answer. In this case, things like:  What meals will the airline offer? In what conditions does a particular meal make it onto the menu (based on markets, flights, regions, etc.)? And what—if anything—will the airline charge for the meals, taking into account personalization and loyalty status? Each of these “answers” are is easily configured in FLX Merchandise, which will then drive the business rules engine to pass the correct offer or choices to the airline’s point-of-sale using standardized XML web services. Let’s take a quick look. Read the rest of this entry »

 

FLX-M Use Case Challenge

Ancillary revenue has become key to airline success, with almost $50 billion in revenue projected in 2014. As luck would have it, we have an award-winning airline merchandising engine (FLX Merchandise) that is helping a number of airlines grow revenue and make customers happy. Among all the cool features of FLX Merchandise, without a doubt, the one that always tops the list among our airline users is flexibility. It’s always fun to demonstrate how new products and services can be introduced in a matter of minutes (not months!), without hard coding and without the overhead of administrating a static product catalog.

In fact, showcasing the flexibility is how we came up with the very first FLX Merchandise Use Case Challenge. There we were, leading a Merchandising Master Class in Singapore, and we thought, “Why not try a live on-the-spot challenge?” So about five minutes into the event, we invited about 100 merchandising managers to submit ideas and strategies for merchandising. What do you want to offer, to whom, and how? We were impressed by the creativity of the submissions—some of these people were really thinking outside the box! Read the rest of this entry »

 

Web_HeaderOrleans

In advance of Airline Information’s Mega Event 2014 in New Orleans, Farelogix will once again host a Pre-Conference Ancillary Revenue Workshop on Monday, November 17th. The workshop will feature presentations from IdeaWork’s Jay Sorenson and a representative from United Airlines in which they discuss the motivation and strategy behind implementing an ancillary revenue program.

We will also take the audience on a journey on how these technologies can be implemented. And back by popular demand, we will present our Use-Case Challenge! Our developers will be put to the test with on-the-spot use case scenarios from you, the audience, so be sure to bring your ancillary revenue ideas!

Space is limited so register now!

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As a precursor to Airline Information’s upcoming Mega Event Asia-Pacific 2014, we will be sponsoring a complimentary Ancillary Revenue Master Class on Tuesday, August 19, with a featured keynote from IdeaWorks’ Jay Sorensen. This event is a must see for anyone attending the Mega Event as it will shed some light on not only the “why” of airline merchandising, but also the “how,” while also demonstrating why delivering the right product at the right time and price to the right customer will put you on the path to more revenue and happy customers.

Farelogix will be providing some real life examples of merchandising in action, as well as putting our developers to the test with on-the-spot use case scenarios, so bring your ideas on how you’d like to generate ancillary revenue – maybe your use case will be selected!

Registration is still available, but space is limited so register now!

 

We recently had the opportunity, along with consulting firm L.E.K., to share our thoughts and insight on ancillary services and airline merchandising in a feature in IATA’s Airlines International magazine. Here’s a brief excerpt:

Ancillaries are not only a boon to airline economics but also an opportunity to enhance the customer experience and airline brand loyalty. Meeting the customer’s demand for greater choice, convenience, and value is the new competitive playing field. The key to meeting this demand is intelligent use of data—from customer demographics and trip purpose, to buying history, real-time trip conditions, and even revenue-managed inventory—to create the most relevant offer, and then deliver it no matter where the traveler happens to be shopping or browsing, even in-flight. Intelligent merchandising is, put simply, engaging with your customer, and acknowledging their specific needs.

You can read the article in its entirety, courtesy of Airlines International, here.

Don’t freak out yet, just keep calm and read on.

It’s been a few weeks now since our jaunts to Singapore and Barcelona where we, along with the folks from Airline Information, LEK Consulting, and a handful of great presenters, conducted half-day NDC in Action Symposiums to an audience packed with airlines, GDSs, TMCs, and other technology providers. These symposiums were not about whether NDC is good or not (because all the relevant players agree that it is), but rather focused on Merchandising Strategy, User Experience, and Mid-Sized (not Big) Data, along with performing some real-life demonstrations of “NDC in Action” to show the benefits available to airlines, travel agencies, and consumers.

© learchitecto - Fotolia.com

© learchitecto – Fotolia.com

But back to the question at hand: did LCCs invent NDC? Well, I think the basic premise of NDC lies directly with Low Cost Carriers like as EasyJet and others. These early renegades, when building an airline from scratch, took advantage of some technological innovation (primarily XML) to build their own individual airline APIs (Application Programming Interface), then publish those APIs to internal and external distribution touchpoints like their websites, mobile apps, the GDSs, OTAs, etc. It was pretty novel back then, but looking back it was very logical. They are low-cost airlines, with low-cost mentalities, working with low-cost systems. They are not tied into all the legacy complexities around a big PSS, EDIFACT, and the GDSs. Theirs is a simple and pure concept: distribute their content through their websites and other customer touchpoints using a single integration XML API. Read the rest of this entry »

With airline ancillary revenue expected to top $40 billion this year, it can mean the difference between profit and loss for many airlines. Generating this revenue isn’t about simply charging fees for services, but rather it’s about engaging with customers to deliver timely and relevant offers that bring added value to their trips. Delivering products and services travelers appreciate—not to mention, actually pay money for—will not only bring an airline more revenue, but it will also bear happier customers.

This strategy of More Revenue Happy Customers is new to airlines, especially when considering that for years the airline offer consisted only of a system of schedules and fares. But this new way of doing things will be essential in defining an airline and the way it does business. Put simply, it’s time to evolve the airline DNA.

 

View video on YouTube.

© RTimages - Fotolia.com

© RTimages – Fotolia.com

After going over the top 10 reasons for not starting an airline merchandising program in a previous post, we thought it might be good to provide a little encouragement, along with what we believe are foundational principles necessary for any airline wanting to start or enhance a merchandising program.  Because let us not forget that in a relatively short few years, those airlines already practicing the art of airline merchandising are reaping their slices of a new revenue pie that is expected to exceed $50,000,000,000 (yes, that’s billion) this year, almost exclusively attributable to airline merchandising.  This year it is projected the average revenue generated per passenger boarded (PB) from what I call “true ancillaries” (those optional purchases excluding bag fees, change fees, and affinity credit card revenues) will exceed $7.50.  That’s more than most airlines make on a ticket sale!

So if you are thinking of starting a merchandising program, or expanding the one you currently have, here are a few considerations we have picked up on over the past couple of years talking with airlines about merchandising.  Our top three considerations are*: Read the rest of this entry »

© md3d - Fotolia.com

© md3d – Fotolia.com

We’re excited to kick off the first installment of our blog series on airline merchandising with,  “Top 10 Reasons Not to Get Started with Airline Merchandising.” We’ll share with you some of reasons we’ve heard why airlines don’t want to or are not ready to start merchandising. We’ll also share our rebuttal to those reasons. Enjoy!

10. We are a full service airline.  We offer an all-inclusive product. 
Are you able to tell the world that and demonstrate to customers your brand differentiation?  When travellers shop for a flight online, can they tell the difference between you and your LCC competitor? Merchandising isn’t just selling products and services; it’s differentiating your product so consumers know what they get when they choose your airline.

9.   Our customers aren’t asking for these products and services. 
Well, they’re asking someone for them, otherwise they wouldn’t be spending over $50 billion on those services this year.

Read the rest of this entry »

Now that spring has sprung, we’re packing our bags and hitting the road! We’re going to be at conferences, symposiums, education days, and more—all in the name of innovation in airline distribution!

Check out the upcoming events we’ll be at in the next six weeks.

NDC in Action: A Technology Symposium – Singapore
Along with Airline Information, UATP, and several industry thought leaders, we will demonstrate how NDC will enable airlines and other companies that sell travel to innovate, personalize, dynamically retail, and compete for customers at every touchpoint.

Airline Distribution 2014
This interactive conference is where audience members can contribute to the discussion and meet face-to-face with many of the industry leaders who are solving or working to solve the complex distribution questions facing airlines today. FLX’s Jim Davidson will sit on a panel discussion and give a keynote titled, Airline Merchandising, E-Commerce and Billions of Revenue – Why Some Airlines Are Winning. Read the rest of this entry »