Focus on ancillary revenue
The Ancillary Revenue World Conference took place on June 29-30 at the Royal Garden Hotel in Kensington, London. Richard Williams reports
Baltic training pays off
From Air Baltic's lurid green trainers, with aircraft windows printed along their sides, to CarTrawler's way for airlines to boost their car rental sales, delegates were presented with a raft of ways to increase AR
JANIS Vanags, vp corporate communications, flew in from Riga, Latvia, to represent Air Baltic. His airline has 'only' 1400 employees, but
3.2 million customers and 80 routes covering northern and eastern Europe. He brought with him an unusual new product for airline retail, fresh from the factory: Air Baltic trainers, in a lurid green, with aircraft windows printed along the side (see below). His point was that aircraft are now, in effect,
travel megastores, and his quest is to find and create innovative products to sell. Air Baltic was the first airline to sell flowers
on board, delivered to your spouse or loved one in the comfort of their seat. Air Baltic was also the first airline in the region, in 2009, to sell punctuality insurance: the bet was 21 euros against a double ticket price. This ingeniously increased revenue, made a strong point to the customer, delivered the punctuality message – and used the passenger’s money to pay for it! A similarly innovative approach was
demonstrated by the Samsonite lightweight suitcase in the inflight catalogue. This sells at Recommended Retail Price but is stickered by Air Baltic so that it travels free for one year. Air Baltic was also the first in the region to
offer an Apple Ipad for in-flight entertainment, included in the Business ticket, but at additional cost in Economy class. Janis says he was irritated by customers arriving in Riga and getting overcharged by the local taxi drivers, so he set up a taxi service.
Air Baltic's own taxi company was set up in response to local taxi firms 'overcharging' customers
Air Baltic also runs a bike-hire scheme: both
the taxis and bikes feature strong branding. Inflight food is created by a celebrity chef, with the hot dish being organically sourced from local farmers in both Business and Economy. Nespresso coffee is served in Business class, and is currently being tested in Economy. Janis is a huge fan of social media and Air
Baltic keeps a high-profile globally. The second stage is to go commercial, by selling gift vouchers and tickets. All this innovation not only won Air Baltic the Airline Pacesetter Award 2010 at the LCC conference but also helped raise AR from two euros per passenger in 2006 to 15 euros in May 2011. Air Baltic is now in the Top 15 for AR worldwide, with 15% of its total revenue from AR, which makes up 1% of Latvia’s total exports.
www.airbaltic.com 56
www.onboardhospitality.com
"Air Baltic is now in the Top 15 for AR worldwide, with 15% of its total revenue from AR"
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