A new tool from Amadeus will enable travel agents to sell flight-related ancillary services using a menu pricing system comparable with what the consumer sees at airline dot-com sites.
Gillian Gibson, group vice president, argued at this week’s Travolution Summit that airlines should focus on making money out of being an airline and not see themselves as travel agents or tour operators.
While many airlines have talked up their ancillary revenue strategy, Gibson pointed out that very few break this down into flight-related and third party add-ons.
“The amount of ancillary revenues seem significant, but it is only the commission that makes it to the bottom-line,” Gibson explained.
Flight-related extras such as meals, seat allocation or express boarding have better margins, and are within the airline’s control.
The IT company has a number of products designed to help airlines sell extras more easily. Later this year it hopes to upgrade its Amadeus Airline Ancillary Services to “enable complete unbundling of the fare and the sale of additional products through the GDS”.
A spokesperson said that this would help airlines see the GDS channel as a retailer of its product rather than a distributor.
Airlines are often slated in the consumer press for the range and scale of their flight-related add-ons. Gibson’s presentation included some Amadeus research of US consumers’ views about flight extras.
It found that 85% of a 2000-strong sample disliked having to pay, but more than half understand why airlines were doing so. Elsewhere, the survey found that half the sample likes the menu pricing approach, with only 18% wanting a full-service price, even it turned out more expensive.