Shaping the New Era of Airline Shopping

The airline ancillary revenue concept has been one of the aviation industry’s most successful revenue-generation capabilities. What has started as additional fees for bags and seat selection has become a wide array of offerings ranging from access to VIP lounges and Wi-Fi services to travel insurance, flexible fare, loyalty programs and subscription services.

In recent years, airlines have been improving their sales practices. The introduction of modern distribution methods, flexible pricing, bespoke offers, and auxiliary services has opened up new ways for airlines to get more profit through direct, indirect, and corporate sales.

Why pricing alone isn’t enough-and how connected offers, corporate travel, and distribution shape commercial success.

Airlines have historically regarded ancillaries as insignificant ancillary revenue streams based on highly-regulated pricing and flat-rate fees. However, due to narrow profit margins and extreme volatility in oil prices, Ancillaries

Historically, airline “personalization” has been a B2C effort (e.g., via passenger apps, making seat recommendations, in-flight entertainment), while TMCs, OTAs, and corporate contracts have been static and reliant on yearly fare tables and volume-based incentives.

For decades, the airline industry was constrained by digital technology. The industry had been selling a very emotional, high-value product (air travel) using systems that were designed before the Internet was widely available for instance, using EDIFACT – Airline retailing maturity, a messaging standard developed in the 1980s to transmit flight schedules and fare information.