Long before covid, airlines—especially the budget carriers— have been boosting their operating margins with ancillary revenue. Ancillaries, which are non-ticket sources of revenue for airlines, brought in 109.5 billion U.S. dollars in 2019 alone.
Since the pandemic has made passengers pickier—they expect personalization and higher safety standards—and airlines need a massive boost in revenue to recover from the devastation caused by international travel restrictions, ancillaries are expected to lead the way.
Choosing the right ancillaries to focus on
Emerging from the pandemic, customers have a variety of concerns they need resolved before they can trust air travel again. A few of them are:
- Increased safety measures
- Flexibility in pricing
- Modular offers for corporates
Meeting these should be an airline’s primary focus if they want to rekindle passenger confidence in flying and provide a seamless journey for their customers. This is because customer behavior has seen a massive shift due to social distancing requirements, fears of infection, the economic downturn, and the shift towards online buying.
The way out of the pandemic—personalizing the passenger experience
To stay relevant and gain increased customer loyalty, airlines need to focus on personalization the way Netflix and Amazon have been able to, by moving from a product-focused approach to a customer-focused one.
Here are a few of the ancillaries that you can offer passengers in light of the pandemic and your efforts to fill more seats with high-yield passengers.
Covid related health measures
Passenger confidence will be boosted if you take the initiative to offer ancillaries, such as travel insurance and baggage wrapping and immune boosting kits to protect from infections. Ensure that the insurance is affordable and comprehensive, covering aspects like screening, telemedicine, treatment, and quarantine costs.
Also, you can take a cue from a variety of tour operators who are offering tours in Russia with a twist—you will be given the vaccine on arrival.
Moreover, some airlines are allowing passengers to book seats or whole rows near them to ensure social distancing. This can be quite lucrative if airlines are able to automate the booking process and make sure those seats are blocked from being booked by others.
Crucially, passengers also need to be offered the ability to cancel without any penalty if they contract covid.
Modular bundles for business travelers
Identifying flights or timings with more business travelers and offering something as simple as Wi-Fi will do wonders for your bottom line. Also, offering business-class lounges, extra legroom, transport facilities in their destination, etc. for corporate travelers can significantly boost ancillary revenue.
To attract more corporate clients, airlines can also begin offering tickets that offer changeability of the seat, refundability, and easy upgrades.
Frequent flier rewards
Airlines can present passengers with the opportunity to be part of a rewards program that benefits the fliers every time they use the services of the airline. Seeing rewards accumulate will serve as an impetus for many to become loyal to the brand.
Further, the airline can make money selling loyalty points to credit card companies who pass it on to their premium customers. These customers go on to become patrons of the airline.
Tourists and religious pilgrims will form a substantial part of airline revenue for the next few months, given the reluctance of many business travelers to begin corporate travel because of factors, such as remote work.
So, catering to the tourists with fully packaged trips to their dream destination, including car rentals, hotels, and food, will serve to delight your passengers and add to the bottom-line as well. It is worth noting that airlines can profit from offering relaxation or wellbeing-themed tours because of the effect that the pandemic has had on people’s minds and bodies.
Airlines need to come up with innovative, personalized products through dynamic bundles across all touchpoints and channels. Doing so will go a long way in giving the airline a competitive advantage amidst these turbulent times. \
If you want help with offering customer-centric ancillaries to optimize your revenue and strengthen recovery, don’t hesitate to reach us at firstname.lastname@example.org