Two reports from Switchfly
reveal ancillary alignment between airlines and their passengers: The airlines are seeing success in selling ancillaries and the travelers are embracing them.
The first report, on mid-tier airlines' perspectives
on ancillaries, shows that this specific revenue center is "mission critical" for 62.5% of respondents.
A near complete majority — 97.9% — identified ancillaries as a vital piece of their e-commerce offerings. Yet, it appears that, in this cohort at least, that the airlines are not quite executing on this understanding.
The graph below shows that the majority of airlines are only offering bag checks and seat upgrades within the pre and post boarding phases.
For those that are not yet selling ancillaries, a slight majority (53.9%) are ready to sell. However, there are some expensive barriers to entry for this sort of merchandising shift.
Technology must be aligned with staff training to deliver a consistent experience, not to mention the operational support to ensure a successful transition. The addition of certain ancillaries also may require a marketing effort to placate traveler pushback.
These limitations even affect those already selling ancillariesL 54.2% said that technology is stopping them from selling more while 33.3% identified a combination of tech and lack of C-suite support.
The GDS and other factors were holding back 8.3% of airlines.
The second report focuses on the way that consumers' perspectives
After surveying 2,059 adults in the UK, it found that 49% of respondents were more interested in unbundled ancillaries than the 32% who preferred an all-inclusive fare with F&B, checked baggage and entertainment. Of the respondents, 69% report regularly purchasing ancillary items when traveling by air.
There also appears to be some confusion among these respondents, which should concern any airline either considering ancillary merchandising or already doing it.
Only 19% found that the process was "not at all" confusing, meaning that a vast majority of travelers do not find the process to be easy to understand. This could leave some serious money on the table, as a confused consumer is generally more apt to click away than convert.
Interestingly, the survey also discovered that lower income travelers are more likely than middle-to-upper income passengers to upgrade from a no-frills fare to a mid-to-high price bundled fare that included a checked bag, premium F&B and entertainment.
NB: Fee image courtesy Shutterstock.