Creating one last chance to maximise airline ancillary revenue

Airlines are getting ever more creative in their drive to increase ancillary revenues. Flybe has just launched the UK's first low cost airline wine club, copying the long running BA wine club.

But, to get really creative airlines need a way of promoting their distressed inventory to passengers on departure day ... creating one last chance for them and their affiliates to maximise ancillary sales.

The recent drive to reduce departure day costs with home check-in and kiosk check-in means that prior to boarding airline staff have less face-to-face contact with passengers than ever before. As a consequence, airlines lose the opportunity to sell distressed inventory, such as last minute upgrades, at a time when passengers are most receptive to this type of offer.

Promote ancillary services with SMS text message offers
One solution is to use technology to reconnect with passengers on departure day. And, the ubiquity of the mobile phone makes it the ideal low-cost communication channel.

Using SMS text messages as the lowest common denominator, airlines can target passengers based on their profile to promote relevant ancillary services on the day of travel (e.g. a low cost airline may offer a business traveller access to a hospitality lounge).

Technology can solve the fulfillment issue too
So, why aren't many airlines doing this today? Fulfillment: airlines don't want the hassle and cost associated with taking payment and fulfilling an offer at the airport.

However, technology can help with fulfillment too. For example:

1. By asking the passenger to accept the offer by replying with the last 4 digits of their credit card. This approach has been successfully implemented by the London Congestion Charge scheme. This is useful for "simple" services typically offered directly by the airline (e.g. upgrade to business, extra legroom, priority boarding, lounge access). Once payment is confirmed, the airline sends a confirmation message back to the passenger.



2. Airline affiliates often offer more "complex" services (e.g. pre-booking a taxi, reserving a hire car), where it is more appropriate to ask the passenger to reply to the offer to trigger a callback. In this case, an agent from the affiliate's call centre contacts the passenger to take payment and confirm details of the reservation.

By implementing a low-cost,day of travel communication channel in this way, airlines can target passengers when they are most receptive to ancillary offers ... minimising distressed inventory and maximising ancillary revenues.