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Event Review


AIRLINE RETAIL CONFERENCE 2013 JULY 3-4, PARIS


Ways to profit


Is it time to change the word ‘ancillary’ to ‘essential’ when talking about ways in which airlines are working to increase revenue and enjoy a profitable future? Jo Austin reports from ARC in Paris


Paris, ancillary revenue (AR) now makes up five per cent of airline revenue globally, equal to around US$36 billion a year.


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And it seems the industry has the ‘young’ to thank for a large part of this spend, according to a recent survey of consumer spending based on demographics published by research firm, PhoCusWright. “Younger travellers in the US are some airlines’ best customers with almost half of air travellers between the ages of 18 and 34 buying an inflight meal or snack. With the sole exception of priority boarding, similar trends occur across inflight entertainment, preferred seating, inflight wifi and airport lounge access. “


54 WWW.ONBOARDHOSPITALITY.COM


ccording to latest figures released at this year’s Airline Retail Conference (ARC) in


The younger generation is clearly more ready and willing to pay for services that their older counterparts came to expect in the base airfare. It is surely this same younger audience who will take advantage of the technology on airlines which offer a retail-fused wireless geo- entertainment solution (in other words – shopping and games in the air). According to Mary Kirby, editor of AR News, this geo-entertainment content can be streamed to passengers’ own portable electronic devices. “Expect second screen apps, such as that now offered by Lumexis,” added Mary who sees IFE as a valuable and popular source of extra income for airlines.


Tim Clifford, divisional director at onboard retail technology provider Novo Ivc, believes that the future


Airlines will earn commision from selling a range of virtual inventory products that do not carry the weight penalty of being stocked on board


of inflight retail will see airlines earn commission from selling an unlimited range of virtual inventory products that do not carry the weight penalty of having to be stocked on board. “The future model is based in the online environment with a server in the galley and wifi on board so passengers can order products using smart phones and tablets,” says Clifford, adding that the inflight entertainment system and crew payment devices should all be hooked into the process and communicating with each other. “So a passenger can order a bottle of perfume from their smart phone or tablet or through the seat-back system; this communicates with the server in the galley and pings the cabin crew with which seat the passenger is in and how much to take payment for. The cabin crew take the payment and


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