Ancillaries, fees… whatever you call them, what is a lucrative revenue source for airlines is a reporting headache for travel buyers. Can the technology companies help? Martin Cowen finds out
AROUND THE GLOBE, airlines are charging customers for bags, in-flight catering, seat assignment and priority boarding to name but a few. The business travel community is slowly coming to terms with the technical, commercial and cultural fallout from the mass unbundling of air fares by many carriers.
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‘Industry standards’ for the sale of ancillaries are not only a technical, but a service imperative. Shelly Terry, senior director of airline merchandising at Sabre Travel, explains that “agents need standards to deliver, airlines need standards so they can generate revenues, and corporations need standards so they can monitor their travellers’ spend and negotiate with suppliers.” The Airline Tariff Publishing Company (ATPCO) is owned by various airlines and collects and distributes air fare data for more than 460 airlines, representing 97 per cent of the world’s scheduled commercial air traffic. Data is then sent on to customers, including the
global distribution systems (GDSs) and other reservations systems. Its Optional Services product
incorporates standards for ancillary products. Launched in 2008, it drives the distribution, sale and merchandising of ancillaries and, at the last count, is used by more than 260 carriers.
The ATPCO standards are not, however, used for fulfilment. This responsibility passes to the International Air Transport Association (IATA) and its product is known as EMD – electronic miscellaneous document. EMD allows airlines to sell and track the use of all ancillary services, to accept payment, and to issue relevant documents to travellers. Importantly, an EMD will integrate miscellaneous charges automatically into invoices, reports and back-office accounting systems. IATA uses the ATPCO standards as part of its drive towards eliminating paper tickets from the airline industry by the end of 2013.
Sabre’s Terry continues: “Standards are well-defined and are constantly being enhanced as airlines look at new options for selling ancillaries. The challenge now is to manage the process of utilising the standards. Changing platforms to integrate the standards is ongoing, and we are confident all airlines will buy in
as they look to drive more revenues through ancillaries.”
Travel management companies (TMCs) are also interested in the widespread adoption of standards. Nigel Turner, director of programme management for Carlson Wagonlit Travel, says: “We’re finding it is relatively easy if the ancillaries are sold as part of the fare, but the difficulty we have is when the product is purchased separately.” So, for example, a traveller arriving early might decide to buy lounge access at the airport, an upgrade or an assigned seat.
WORKING IT ALL OUT The hard upsell of ancillaries adopted by many airlines at the online check- in desk shows how easily products can be purchased separately. Matthew Talbot, VP marketing
Americas for Airplus International, says that even for a corporate card provider, quantifying the spend is tricky. “If we see a US$20 fee from, say, American that is charged at the same time as the return leg, we can assume that it is for an additional bag. But it can be difficult to be precise,” he says. “Standards are great, but issues around the point of purchase are sometimes lost.” He added that Airplus “data-mines” credit card information to try to identify charges, but this is