Strategy or structure?
SeaMountain recently chaired the client conference of Paxport who specialise in ancillary revenue for charter companies and tour operators. One of the eye-openers was that the charter carriers seem to be ahead of the industry in terms of how they are structured to maximise ancillary revenue sales.
As one example, John Broughton from Thomson, who was on one of the panels talked about how onboard sales – including “Duty Free” and ancillary revenue were now all under one roof. That meant, Thomson were able to maximise the customer experience and the customer journey with one team understanding all the customer touchpoints.
Duty free is dead. Long live duty free!
It would seem that this lesson is not lost with some of the “Low Cost Carriers” according to a recent press release from Airline Information (click here to read it) airlines like Jet2 make considerably more ancillary revenue per passenger by having that one view of ancillary sales per passenger.
In the past many airlines had a dedicated “Duty Free” department that looked after these sales. Some of those struggled to adapt to the non “Duty Free” world in Europe post the adoption of the single market. Others, like Lufthansa with their WorldShop have been ploughing ahead to increase sales by increasing the range of not just goods but services sold on-board.
In previous blogs SeaMountain has talked about airBaltic’s taxi service. This is a great example of what happens when you have that strategy view of your customer and you set your structure up to deliver. For other airlines starting out on improving their so called “Duty Free” sales looking to these carriers is one way that they can make a step change in their sales (and, of course, profitability!)
Duty free may be dead in some parts of the world, but, onboard sales – with the right strategy and structure – certainly have a healthy future as the likes of Jet2 and Thomson are showing.