Ancillary Revenue Opportunities are Booming all Across Asia

The Guestlogix team is heading to Singapore for the Aviation Festival Asia later this month. If we don’t see you there, we’ll be sharing our updates from the event when we’re back examining what’s happening across the APAC region when it comes to changing traveler behaviors, and how airlines are recalibrating their ancillary revenue strategies.

The opportunity for airlines across Asia is extraordinary, whether they’re FSCs, LCCs, ULCCs, regional carriers or hybrids. Just consider these stats from eMarketer and Criteo:

• In the past year, Asia-Pacific surpassed North America to become the No. 1 digital travel market in the world. This was due mainly to strong sales gains in China and India. Airlines that excel at digital and mobile revenue generation will be ahead of the game.
• While Singaporeans take most of their trips abroad, across all other countries in the APAC region, domestic trips dominate. There is tremendous opportunity for ancillary revenue in APAC, but airlines will need retail analytics to personalize and target offers for APAC audiences. That also requires accepting locally preferred payment methods (such as WeChat or Alipay).
• India has the highest percentage of APAC consumers who browse and book on-the-go. Airlines have an opportunity to better integrate ancillaries across the entire "day of travel." What does a customer who books on-the-go need in a hurry, and is willing to pay for? The possibilities for ancillary merchandising are endless – but not without mobile apps connected to passenger systems.
• Vietnam has the highest percentage of retargeted ad penetration, with 89% having clicked on at least one retargeted ad. Airlines will need retail analytics and predictive algorithms to anticipate the right offer at that moment and for that customer. This mobile strategy for booking also applies to “day of travel” revenue – targeted mobile offers (at the right time and location) can increase revenue before, during and after the flight.

The demand for air travel in Asia-Pacific is so huge that airlines urgently looking for better ways to connect ancillaries with passenger systems and inventory distribution. Over the next 20 years, IATA forecasts that passenger demand for air travel will double to 7.2 billion passengers by 2035. The forecast for APAC is remarkable to think about for ancillary revenue:

• China will displace the US as the world’s largest aviation market (defined by traffic to, from and within the country) around 2024
• India will displace the UK for third place in 2025, while Indonesia enters the top ten at the expense of Italy
• Growth will also increasingly be driven within developing markets. Over the past decade the developing world’s share of total passenger traffic has risen from 24% to nearly 40%, and this trend is set to continue.

The 2018 Aviation Festival Asia will be the perfect setting to get together and talk about Guestlogix’s new airline commerce platform , which we built to help airlines improve their ancillary revenue capabilities as well optimize their passengers’ experience on the day of travel and in the cabin. During the product development phase, 86% of airline professionals surveyed believed the new applications will increase ancillary revenue, and 94% were confident the system will improve passenger experience.

Let’s continue the discussion in Singapore… If you’re attending the event, let’s set up a meeting. You can also schedule a demo to learn how we’re helping airlines deliver a better experience to their passengers and increase their ancillary revenues, in and out of the cabin.