Airline capability to effectively sell ancillary services through the mobile channel is over a year away, according to a new report.

Published: 17 Jun 2011

Airline capability to effectively sell ancillary services through the mobile channel is over a year away, according to a new report.

According to Amadeus’ report, The always-connected traveller: How mobile will transform the future of air travel, over the next two years airlines will be adding key functionality to their mobile offering to expand merchandising opportunities.

Key among these efforts is the ability to book ancillary services on mobile devices. Ancillary services are an important revenue source for airlines, but also provide a way to allow the passenger to customise their travel experience. Although there was no strong evidence in this research that airlines will be offering ancillary services on mobile in the immediate future, most airlines have plans to do so over the next 12- 24 months. Offering services such as premium seating, club access or the pre-purchase of meals are ideal for the mobile platform.

Even if the airline has formatted their normal website for the mobile web, all the ancillary capabilities are rarely available. Only one interviewee, a North American full service carrier, currently had the ability to pay forbaggage fees via the mobile web. Most interviewees recognised that there was an opportunity to sell ancillary services via a mobile device, but most stated that this capability was at least 12 months away from coming to market.

The most aggressive approach to ancillaries seem to come from the Middle East and Scandinavian carriers as each plans to implement ancillary services within 6-12 months. With ancillary sales being a major strategy for airlines worldwide it was surprising to learn that mobile capabilities were not a greater priority.

The report highlighted that tying ancillary services to frequent flyer status allows the airlines to deliver unique services based on customer value.

Ultimately airlines need to understand the personal preferences of their passengers and match services that fit those preferences based on the particular needs of a given trip. Gaining customer insight is the goal of all airlines and observing patterns of ancillary purchases, particularly on mobile devices is an important method to achieve greater customer intimacy.

Promotions

In addition to ancillary services, the other area of planned functionality over the next 12- 24 months highlighted in the report is promotions. Mobile technology offers a new opportunity to personalise offers based on passenger history and future travel plans. Targeted promotions have the potential to provide more passenger specific offers that meet a customer’s preferences and provide incremental revenues to the airline.

Mobile platforms have the potential to transform generic promotions into more specific tailor-made offers specifically tied to a user’s preferences and interests. The entire process of opt-in puts the passenger in control over what he is willing to see and the relevance of the offer will dictate whether the promotional messages will continue to be accepted. Mobile technology allows the promotions to be location sensitive and personalised.

Under consideration 3-5 years

This study classifies advanced functionality into two major categories:

1. Functions related to the passenger experience.

› Location based services – These are services that provide location sensitive advertisements promoting airport or local merchants as well as local information guides (e.g. airport, gates, baggage carousels, etc).

› Advanced disruption management – This includes the pushing of alternate flights and the offer of personalised compensation and electronic vouchers for hotels when a flight is cancelled.

› Social media – Monitoring social media comments and targeting the passenger’s physical location to prioritise assistance based on the nature of the issue. Also being considered is the integration of peer reviews during the mobile ticket purchasing process.

› Movement tracking – Depending on local cultural and legal restrictions, automatically identifying a passenger’s location in the airport.

› Advanced push notifications – This has two main purposes, providing the passenger with more information about their flight or baggage and selling ancillary services to monetise the mobile channel.

2. Capabilities that take advantage of advanced mobile device or software features.

Mobile devices are increasingly becoming electronic wallets and sensors to the world around us. Two important advanced mobile device capabilities that will enable new services for airlines are:

› Mobile payments – The adoption of universal mobile payment systems will allow the passenger to use their phone to pay for goods and services.

› NFC – The integration of near field communication (NFC) technology into the handset. NFC involves two pieces of hardware. One is an NFC chip in a mobile phone and the other is an NFC reader at a merchant or transportation facility. NFC will allow the passenger to speed through the airport check-in and boarding process.

(The report identifies changing traveller attitudes to airline mobile services whilst also highlighting the specific, emerging mobile technologies that will revolutionise each stage of the travel experience in the future.)