Where next for airline merchandising as carriers reap volume and yield gains?
Amadeus has looked at the digital business of 50 of its top performing airline customers to reveal gains not only in passenger volumes but also ticket value.
The distribution giant is claiming a 15% growth in PNR volume as well as a yield increase of almost nine percent year-on-year for those carriers and believes merchandising is playing a significant role.
Philippe der Arslanian, vice president of merchandising and digital, Amadeus IT Group, says the growth is being driven both by airlines bringing more volume online either via their websites or other digital solutions as well as employing merchandising techniques to increase ticket value online.
He says that carriers are offering and selling more products as well as incentivising travellers to buy more through improved merchandising techniques as well as improving the user experience.
On whether there are any characteristics that these airlines share, perhaps in digital maturity or investment, der Arslanian says only that they have aggressive growth strategies and are ensuring that there are increases in both volume and yield as opposed to volume at the expense of yield.
The whole area of merchandising for airlines is progressing with der Arslanian talking of the possibility of ‘anytime merchandising’ and the ability to offer travellers products and services across the entire trip, whether it be at the time of booking, or the departure day, during a disruption or once on board.
He adds that an airline is currently testing the concept.
A tie-up with Plusgrade just announced by Amadeus enabling travellers to bid for a seat upgrade or an additional adjoining seat is a good example. Plusgrade chief executive Ken Harris says more than 50 airlines are seeing revenue growth as a result of its solutions.
Amadeus opted for the company because it already works with some of the same airline customers as the distribution giant which meant faster implementation.
Robert Booth, head of product marketing, airline merchandising solutions, Amadeus IT Group airline says partners have been requesting sort of capability in RFPs.
Findings from the latest IdeaWorks-CarTrawler report on ancillary revenue also show how average ancillary revenue per passenger is rising with growth of more than eight percent between 2013 and 2014.
And, rivals in the distribution space have also seen a pick-up of airline interest in the whole area of merchandising with Travelport reporting back in March that it had 150 airlines live on its solutions.
All in all it’s an interesting time to be in the airline space in terms of the evolution of how fares and ancillaries are being sold.
Der Arslanian believes the trend this year will move towards a focus on the overall travel experience and helping travellers by offering them additional products and service when things go well as well as in times of disruption.
Linda Fox is deputy editor for Tnooz. For the past eight years she has worked as a freelance journalist across a range of B2B titles including Travolution, ABTA Magazine, Travelmole and the Business Travel Magazine.
In this time she has also undertaken corporate projects for a number of high profile travel technology, travel management and research companies.
Prior to her freelance career she covered hotels and technology news for Travel Trade Gazette for seven years. Linda joined TTG from Caterer & Hotelkeeper where she worked on the features desk for more than five years.