HF Holidays highlight winter breaks

HF Holidays highlight winter breaks

Tuesday, 25 October 2016 14:00

HF Holiday...

Flybe puts more summer 2017 routes on sale

Flybe puts more summer 2017 routes on sa…

Tuesday, 25 October 2016 11:00

Flybe has put more early release routes on sale as part of its preliminary summer 2017 schedule.

YHA submits plans for London’s first ‘Super Hostel’

YHA submits plans for London’s first ‘Su…

Tuesday, 25 October 2016 08:00

A planning application has been submitted by YHA (England and Wales) to open its first Super Hostel in London.

£2.3million immigration hall upgrade plans at Bristol Airport

£2.3million immigration hall upgrade pla…

Monday, 24 October 2016 14:00

Following a major overhaul of the security search area for departing passengers, Bristol Airport has unveiled plans to address congestion in arrivals.

Intrepid targets socially conscious Gen Z with new Geckos age-range

Intrepid targets socially conscious Gen …

Monday, 24 October 2016 11:00

30 year olds will be ‘too old’ for Geckos Adventures next year, as the Intrepid Group has announced that it will cut the age range to meet a growing demand...

New survey reveals just one in 12 Brits manage to wangle an upgrade

New survey reveals just one in 12 Brits …

Monday, 24 October 2016 08:40

New research from Jetcost.co.uk has revealed that only 8% of British travellers have actually managed to secure a free upgrade for their holiday, with flight upgrades and hotel room upgrades...

Just You launches travel trade solo experience

Just You launches travel trade solo expe…

Friday, 21 October 2016 14:00

Just You has announced its largest investment to support the travel trade with the launch of 200 joint marketing events to promote solo travel.

Spontaneous people are happier according to Snaptrip survey

Spontaneous people are happier according…

Friday, 21 October 2016 11:00

Spontaneous people are often believed to lead more exciting or glamorous lifestyles and a new study has confirmed that they are happier in all aspects of their lives.

Top Brighton attractions on Combi-Saver tickets for half term

Top Brighton attractions on Combi-Saver …

Friday, 21 October 2016 09:00

Visitors to Brighton this October half term can save up to 20% on its top three paid-for attractions with combination tickets now available for British Airways i360, SEA LIFE Brighton...

Free cabin upgrades with Cosmos Tours

Free cabin upgrades with Cosmos Tours

Thursday, 20 October 2016 14:00

There still’s time for agents to book a Croisieurope river cruise for their customers with a free cabin upgrade on a range of river cruises throughout Europe, when booked with...

Last minute autumn breaks available at Haven

Last minute autumn breaks available at H…

Thursday, 20 October 2016 11:00

Agents can still give their customers a last minute family break this autumn from £99 when booking a Haven holiday between now and November 5.

Skiers urged to head east for best piste costs reveals new report

Skiers urged to head east for best piste…

Thursday, 20 October 2016 08:00

Cash-conscious skiers can avoid the slippery slope of higher prices for their annual downhill trip by heading to ski resorts in Eastern Europe.

Design an anniversary poster for DFDS competition

Design an anniversary poster for DFDS co…

Wednesday, 19 October 2016 14:00

Ferry operator, DFDS, is putting out a call to professional and amateur artists to create a poster that will be used in their 150th anniversary celebrations this year.

Savings on worldwide adventures with Explore

Savings on worldwide adventures with Exp…

Wednesday, 19 October 2016 11:00

Explore has launched a new collection of worldwide adventures with a launch offer of up to 10% discount on all new trips booked by November 7.

New route to Seattle makes it one to watch for 2017

New route to Seattle makes it one to wat…

Wednesday, 19 October 2016 09:12

Seattle is expected to be one of the fastest growing US destinations for UK travellers next year with a Virgin Atlantic direct non-stop daily flight launching March 2017, new hotel...

Air Transat launches 2017 programme with increased connections across Canada

Air Transat launches 2017 programme with…

Tuesday, 18 October 2016 14:04

Air Transat has expanded its programme of flights from the UK to Canada with increased capacity and connections for travel in 2017.

An extremely brief primer on the past two decades in the airline industry, in case anyone needs a refresher: First came the streamlining of the air travel product, where meals and other 'perks' were reduced in a cost-cutting effort. Then the airfare was unbundled completely, allowing airlines to present a fare devoid of pesky line-items like taxes and airport charges. Then, in one of the most significant turning points in the economics of passenger aviation, airlines began levying fees and charges on those previously-included products and services. 

Those measures, all designed to enhance revenue or increase the airlines’ bottom line, represented the low-hanging fruit of the ancillary revenue development business. In the face of increased competition and high and volatile operating costs, it can be argued that it was necessary for airlines to pluck these in order to remain solvent.


Sustainable ancillary revenues 

Now, however, the airline industry has begun picking more productive fruit, in terms of ancillary revenues. The trend now is toward reaping commissions from third-party providers in order to boost revenue, and the result has been a truly customizable flight experience for consumers. The fact that airlines and other companies are finding more (and more creative) ways to expand this market is a testament to how “fruit”ful it can become.

Commission-based ancillary revenues, distinguishable from fee-based ancillaries by the value received and perceived by the consumer, have always been marked by the Big Three: car hire, travel insurance, and hotel room. These options continue to be three of the most productive ancillary revenue streams for airlines, but newer ideas continue to emerge. It is worth reiterating, however, that most of the new developments in ancillary revenue development strategy have focused on creating value for the consumer, on identifying the needs and wants of various segments of travellers (business travellers, leisure travellers, etc.), and crafting or packaging unique solutions to meet them.

Today’s ancillary revenue is less about levying a fee, and more about stimulating demand. And that is precisely why commission-based ancillary revenues are sustainable, and represent the best opportunity for growth in the airline industry. It should also be no surprise that many of these offerings are technology-based, and all are available through the airline’s booking path.

Next generation offerings 

Think Beyond Baggage Fees. One next-generation ancillary offering that has generated significant excitement involves a flexible 'concierge' service suite, which provides a traveller with a hotel, restaurant and event locator, taxi and transfer reservations, access to a doctor for non-emergency medical care abroad, and assistance rescheduling in the event of disrupted travel. Here is a programme designed to strip the anxiety out of travel, and airlines – once the very source of that anxiety – are earning a commission by providing it!

It is small wonder that this particular programme has shown great crossover potential between business travellers and leisure travellers. There are plenty of examples of this kind of innovation, from insurance-like ancillary offerings that provide monetary reimbursement in case of inclement weather, to 'bundled' ancillaries like travel insurance and Wi-fi access at airports. Others apply a retail model to the in-cabin shopping experience, while still others partner with airports and other travel-related agencies to provide service options at every step in the journey.

Innovation and experience equals revenue success

The fact is, this value-based approach to ancillary revenue generation has far more growth potential than a fee-based model, if only because there is a natural limit on the amount of fees that can be imposed. Once an airline institutes a fee, it must institute another fee next year (and next year, and so on) or double the fee itself just to maintain the same revenue growth rate it enjoyed in year one.

Value-based ancillaries have no such constraint. By providing a wholly customizable experience to travellers, and by partnering with the right companies to deliver that experience, airlines are realising the benefits of commission-based ancillaries. And that’s a good thing for both consumers and the companies that serve them.

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