Since budget carriers— such as Ryanair —entered the fray and began competing for market share in the airline sector, they have thrived by selling ancillaries. In 2019, before covid was a factor, ancillary revenue for airlines stood at a staggering 109.5 billion U.S. dollars.
With covid throwing a wrench in the workings of the airline sector for nearly two years and costing billions of dollars in losses for airlines, ancillaries have retaken the spotlight. However, airlines can’t expect to return to profitability by focusing on the same ancillaries as before.
Airlines need to focus on the following ancillaries to increase revenue by taking advantage of the post-pandemic desire among customers for personalization, flexible pricing, and higher safety standards.
Given that over half of business travelers are reluctant to travel in the next few months, tourists and religious pilgrims will be the critical drivers of airline revenue in the near term. Careering to them with competitively priced flight packages that include ancillaries, such as car rentals, food, hotels, etc., will go a long way in optimizing your revenue.
Airlines can further offer tours centered on the emotional and physical wellbeing of passengers, given the toll the pandemic has taken on everyone. This can mean a vacation at a hotel with a spa or a beachside resort, or a hill station.
Safety focused ancillaries
Ancillaries ranging from immunity boosting kits to travel insurance to baggage wrapping can go a long way in inspiring customer confidence in travel and increasing your bottom line. Airlines also need to make sure these safety measures offer comprehensive protection at an affordable rate.
Airlines can even take a cue from travel operators offering trips to Russia that include vaccinations on arrival. Also, airlines can capitalize on the need for social distancing and offer passengers the ability to buy the seats near them to leave vacant.
Another ancillary that airlines can sell is the ability to cancel tickets without any penalty if the passenger gets covid.
Airlines can team up with credit cards companies to offer frequent flier rewards and other bonuses. This leads to credit card users becoming patrons of the airline. There are also various loyalty programs that airlines can roll out for both retail customers and corporate travelers that are guaranteed to increase brand loyalty and drive revenue.
For corporate travelers, airlines can offer on-demand services, such as Wi-Fi, in-flight meals, business class lounge access, extra legroom, transport facilities once they reach the destination airport, etc.
Personalization and innovation in ancillary offerings are the keys to an airline’s post-pandemic success. When these are prioritized across all channels and touchpoints, airlines will undoubtedly gain a competitive edge in these turbulent times.
If you are unsure about how to offer customer-centric ancillaries that will bolster your revenue, feel free to reach us at [email protected].