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Did Ya Know: Personalization, what does it mean to you?
Background
The sale of airline ancillary products and services has grown by leaps and bounds for over a decade in the commercial airline industry, exceeding $109 billion in 2019. Examples of ancillary products are baggage allowance, seat selection, access to the frequent flyer lounge, meal, lost baggage insurance, priority bag drop and return, extra leg room, change fees, etc. Even after the pandemic saw a decline in ticket sales in 2020 and 2021, carriers were able to increase their intake of ancillary revenues per passenger. Based on a sample of 75 airlines in 2021, the average airline ancillary revenue per passenger was $29.96, up 39% from the 2019 average of $21.54 per passenger. Against this backdrop of ancillary sales, commercial airlines are investing in offer management based on consumer reference, which is creating the right bundle for the right customer at the right price at the right time. A personalized bundle consists of the base fare and ancillary products and/or services. It is this tremendous momentum in the commercial airline industry that prompted me to serve as a guest editor and solicit papers from industry leaders for a special issue that was published this month (Volume 22, Issue 2, 2023).
This special issue gathered the best minds in the industry to contribute their thoughts and initiatives to improve customer experiences and industry profits with personalized offers. See link below.
https://link.springer.com/
Going Forward
So, what does this mean for the charter airline industry? The charter airline industry is more complex when it comes to recommending a bundle. There are many more dimensions to the problem when an offer is created. Unique to charters is the selection of the type of aircraft for the mission and, when there are two or more aircraft of the same type with similar performance characteristics that are available, a selection needs to be made that best suits the needs of the customer such as cabin space and layout for example. In addition, there is a far greater number of charter fees that can be included in a personalized offer and the potential bundles that can be constructed with the individual SKUs are infinite.
Charter fees can be categorized as ancillary products, financial fees, advisory fees, contract management and owner fees. Examples for ancillary products are pet fees, Wi-Fi, catering, entertainment, communication, layover charges, etc. Examples of financial fees are cleaning the aircraft, cancellation fees, international handling, and administrative fees. Examples of advisory fees are credit card processing and de-icing. Owner fees may also be applicable if the charter flight is flown as FAR 91 and may include owner flight charges, ferry fight charges, and training flight charges.
To learn more, please call (817) 518-9875 or email us at info@charterandgo.us
This is just one highlight of Charter and Go. Many of our developers have been in this industry for over 20 years. We know your business and are doing everything to ensure our tool complements your operations in the best possible way. Is there something unique about your operation? We are here to support you! Every two weeks, we are adding new capabilities to our platform with no plans on slowing down. Please reach out to learn more about Charter and Go.
Christian Huff – Co-Founder and Chief Executive Officer
