Airlines will increase their focus on new distribution channels such as mobile and social media over the next two years, according to WorldPay’s Alternative Payment and Distribution Landscape: Airline Distribution Channels report.
The company surveyed 68 global carriers (from low-cost to traditional), and found that 83% of airlines believe that improvement and deployment of new payment technology is a major business priority. They want to align their payment offerings with customer expectations to gain competitive advantage.
Carriers are focusing heavily on mobile as both a distribution channel and a means of payment, with some 71% saying the future of airline payments lies in mobile; 50% see mobile payments as a way to keep up with competitors and 45% see them as a way to increase revenues.
Over the next two years, airlines will extend existing mobile services to offer ancillary purchases such as seat upgrades, booking management, onward travel and inflight purchases via mobile phones.
Mike Parkinson, the company's vice president airlines, said: “Mobile is not without its challenges – carriers cite increased fraud risk, integration with current systems and processes and mobile platform diversity as the biggest concerns. But with more than three quarters of the world’s population now having access to a mobile device, airlines can’t afford to ignore this high-growth channel.”
The report also found that cards remain the most popular payment method used by passengers to pay for goods and services on board, but alternative payment methods are growing in popularity. The number of airlines offering onboard mobile payments will increase from 5% to 36% in the next two years, and 18% of airlines plan to accept e-wallets by 2016.
To view the report visit www.worldpay.com/reports/airline-distribution-channel