Airline Information: ARAC Ancillary Revenue track, Montreal October 2010.

The global airline and travel industry meets in Montreal on October 12th to discuss further developments in the growing airline ancillary revenue business. Many airlines have discovered new revenue streams which they call “ancillary revenue”, these include the sale of items which used to be included in the ticket price. Items like baggage, food and drinks, insurance, car hire and hotel reservations are now major earners for airlines and all these concepts will be discussed in Montreal in October.

The “Ancillary Revenue Track” division of the conference will discuss all the issues related to these new profit centres including on-board retail. Various forum discussions are planned including “Merchandising moves the goods on-board” by Jay Sorensen the acclaimed guru of travel ancillary revenue.

But, how can airlines improve their on-board sales with the limited space available to them? One Company Guestlogix, who sell in-flight payment technology are very innovative and have invented the use of “virtual sales” by developing the on-board use of their terminals to sell items that do not need to be stocked in-flight. Tickets for buses, trains, amusement parks and other items can now be purchased through these terminals, this means that airlines can make profit in products which are “virtual” and do not need actual inventory.

Meanwhile, some airlines are slow to enter the fray and a recent study of airline websites shows that the majority do not feature their on-board offering on their home page.

It seems that European airlines are much more aggressive when it comes to selling goods in-flight and it is no surprise that European low-cost carriers (LCC’s) are the most active in this area. It will be interesting to see how the discussions which take place in Montreal will develop into new strategies for the airlines and how they realise that perhaps on-board retail may become off-board retail at the point of sale.

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