Airline mobile ancillary sales poised to come on stream

Airlines believe they are still more than a year away from being able to truly exploit mobile technology for the sale of ancillary services, a new report from Amadeus has found.

The study on how mobile will transform air travel in the future compiled in conjunction with Norm Rose of Travel Tech Consulting Inc assesses today’s capabilities and what travellers can expect in the short and medium terms.

As well as interviews with airlines from around the globe the report draws on the results of a JD Power survey of 2,987 travellers.

Generally, mobile functionality was considered to be still in its infancy but airlines said they were looking to bring services on stream and there was a high level of demand from consumers.

One emerging capability is the ability to sell ancillary services, something that is tipped to see a significant upturn in the next 12 months.

The report found “despite ancillary services providing both increased incremental revenue opportunities and the ability for airlines to differentiate themselves from the competition, the majority of the airlines interviewed felt that the ability to sell ancillary services through the mobile channel was still over a year away.”

Just 1.4% of travellers surveyed had bought an ancillary service over a mobile device with just one north American carrier saying it had the ability to offer this service and then only for extra baggage.

Airlines in the Middle east and Scandinavia reported plans to aggressively ramp up their activities in this area with services like lounge access, premium seating and the purchasing of meals expected to be offered.

The level of ancillary sales was low compared to the 16% who said they had used a smartphone to book a trip, a figure that rose to 33% for frequent travellers.

The survey found 3.4% of travellers use their mobile to check-in, although this figures rose to 7.4% among respondents from Asia. Asian and North American carriers were found to be offering the greatest number of mobile services.

The study also found many airlines were looking to use mobiles to keep their customers informed while on the move as well as offering mobile payments for flights and ancillaries – a particular focus on emerging markets.   

Location-based and social networking services were also being adopted. One Latin American carrier was integrating its services with Foursquare to allow check-in from airport shops.

Julia Sattel, vice presient of Airline IT at Amadeus, said: “Mobile continues to shake-up how companies interact with and meet the needs of customers. It provides travellers with a personal, always-connected device that offers unlimited potential to transform how people travel.

“The challenge for the industry is to deliver an intuitive and compelling mobile user experience and services that help travellers get the information they want and buy the things they need.

“However, instead of just transplanting what airlines do online to the mobile device, we encourage our customers to explore what can be done to exploit the unique characteristics of mobile.”

Rose, the report’s author, added: “According to iSuppli Corp, over 73% of the world’s population – which equates to five billion people – carry a mobile device of some form. And so essentially, airlines need to work out how to effectively monetise the mobile channel.

“Airlines across the world currently have an incredibly unique opportunity to use mobile technology; not only for product differentiation but also to allow incremental sales and encourage increased brand loyalty. But crucially, they must also keep pace with ever-changing passenger expectations.”

The Always-Connected Traveller Report will be launched at the Amadeus Airline e-Commerce Conference in Cannes on June 15-17.

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