(Last updated on: 03/04/2020)
Airlines are relying more and more on ancillary revenue as a way to make a profit. But how can airlines maximise in-flight sales and revenue?
As you will have read in my recent post ‘What is Airline Ancillary Revenue Management?’, airlines are finding it more and more difficult to make a profit in today’s industry. Rising taxes, political uncertainty, increased competition and several other factors are amongst the many reasons that airlines are finding it difficult to turn over a profit. The solution? Ancillary revenue management.
Types of airline ancillary revenue
There are four main ways that airlines seek to make profit outside of the money made from the sale of a ticket. These are:
-A la carte
-Frequent flier programmes
I won’t bog you down with the details of each of these money-making techniques in this post, but if you would like to know more, do check out my article- ‘What are the categories of airline ancillary revenue?’
How can airlines maximise in-flight revenue?
There are a number of techniques that airlines can use in order to maximise their in-flight revenue. I have outlined these below:
Crew sales training
Airlines need to provide sufficient sales training to their staff to achieve the best results. This could be part of the Cabin Crew training programme. For more on what Cabin Crew training programmes typically consist of, visit my sister website ‘Becoming Cabin Crew’.
Crew product awareness
It is also important that Cabin Crew are familiar with the products that they are selling. British Airways, for example, include wine training as part of their Cabin Crew training programme so that crew can advise passengers on their choice of drink whilst onboard.
If Cabin Crew are familiar with the products they are more likely to do a good job selling them!
Passenger awareness (before and during flight)
Airlines need to make passengers aware of what is being sold onboard. They might do this via e-mail, on their website, verbally by staff at the airport, by advertising on boarding cards, on posters at the airport or on the aircraft, for example through seatback advertising.
We are often incentivised to buy something when we see it. So Cabin Crew are encouraged to display appropriate onboard products in the galley or on the trolley top. This could include food and drinks, duty free items etc. This should be tailored to the specific flight and passenger type. For example, if there are a lot of children onboard then in-flight sales could be maximised by visiually displaying toys and sweets.
Airlines will usually promote the products that they have for sale in their in-flight magasine.
Tailor products by route, passenger profile or time of day
It is logical to tailor what in-flight sales are promoted depending on particular variables such as who is onboard (such as children), where they are flying and the time of day. For example, alcohol is more likely to be popular in the evenings, whereas coffee is more likely to be sold in the mornings. Aspects such as this should be considered as a method to maximise in-flight sales.
Compare price points with competitors
Airlines need to be competitive and should compare their prices against other airlines doing similar routes. They will often also be competing with the departure and arrival airports.
Offer meal deals
Airlines can ‘up-sell’ by offering bundled options such as meal deals. Customers love to get value for money, even if this might be more of a perception than a reality!
Selling new, different or innovative products can be a good strategy for airlines to maximise in-flight sales. Some airlines, for example, will sell teddy bears or model airplanes with their branding on. These are only sold by the airline and can be desirable to the passenger because they are unique.
In-flight entertainment systems provide the perfect opportunity for airlines to promote in-flight sales. Whether they are advertising alcoholic drinks or excursions, there is a wealth of opportunity here at no extra cost to the airline.
If airlines do not have an in-built IFE system they will often use the seatback as a place to advertise their onboard products. If you stare at the picture of that sandwich for long enough… you just might decide you want it!
Discontinue items that do not sell well
If something isn’t selling well then the airline should discontinue it. To make this happen, there should be staff employed to monitor such issues. Sometimes certain products might sell on some routes and not others. If this is the case then the in-flight sales strategy adopted by the airline should be differentiated according to the route.
Problems with in-flight sales
Whilst selling products and services in-flight can be a great revenue earner for airlines, they do risk having some negative impacts as a result.
Sell, sell, sell culture
Some passengers just want to relax and enjoy their flight. If Cabin Crew push sales too much it might put customers off flying with that airline again.
Balance sales with service
There is a need to carefully balance selling with customer service. If service lacks, then passengers might not be willing to part with their cash as easily.
Competing with airport shops
Passenger dwell time is the time spent waiting around for a flight. This is usually in the airport- a place with lots of shops! The more dwell time a passenger has, the more likely they are to part with their cash whilst in the airport, rather than onboard the aircraft.
No time to grab your Boots meal deal? Buy it onboard instead!
Only so much time on a flight
Another problem with in-flight sales is that there is a limited amount of time onboard a flight. This is a particular issue for short flights, when Cabin Crew might not have the ability to sell as much as they would like to.
Only so much space and weight available for trolleys
Weight=fuel. Fuel=money. Aircraft have limited capacity for carrying items both in terms of space and because the increased weight costs money. It is therefore very important that airlines make accurate predictions of anticipated sales to maximise in-flight sales, without compromising on space or money.
Perceived value for money
There is a general perception that buying products onboard an aircraft is expensive. Whilst this might not always be the case, if this is what passengers think then it could put them off making in-flight purchases!
For more info on ancillary revenue management and airline management in general I recommend the texts Airline Operations and Management by Cook and Billig and Air Transport Management: An International Perspective by Budd and Ison. You’re more than welcome to cite anything that I have written in this post, but if you’re doing research for an academic piece of work remember that you will need a range of sources in your reference list- I’ve added the links to these two recommended books for you here and here.
So that sums up my top recommendations for how to maximise in-flight sales. Do you have any experience of this? What are your suggestions? Drop your comments below!