Travelers are willing to spend on airline ancillaries, report says
GLOBAL technology company Sabre conducted a study to reveal that travelers are willing to pay for airline ancillary services such as on-board meals and preferred seating.
Results show that 80 percent of travelers purchase airline extras on their trips to make their journey more “personal”. Overall, Asia-Pacific travelers spend an average of US$63 on each trip, but would spend up to US$76 if needed to personalize their trips and improve their flying experiences.
When Asian travelers were questioned about the type of extras they most favor, checked baggage, on-board food and beverage, travel insurance, and priority check-in were the ancillaries they were most willing to pay for.
Dino Gelmetti, vice president EMEA, airline solutions, Sabre, said, “It’s clear that while there are regional differences in ancillary preferences, 80 percent of all travelers spend on air extras, representing a significant revenue opportunity for airlines.”
He added, “Airlines know what their travelers want based on the data they have of past purchases. Yet so much of this data remains unused today.
However, by leveraging the latest technology, airlines can unlock this data and show they know their travelers by offering the right products at the right time and tailoring a personalized experience that will improve customer loyalty and generate much-needed revenue.”
It seems like many budget airlines are fully aware of the trend, and are milking the benefits. A separate study in June by Kayak Singapore revealed that airlines are going overboard with their prices of everyday snack items and drinks.
The price of a cup of tea is marked-up by a considerable 466 percent compared to supermarket prices. A cup of tea on-board Tigerair, Jetstar and Scoot are marked as approximately US$3 while the price of a single sachet of tea from the shops is US$0.40.
The exorbitant mark-ups are also recorded with other drinks like coffee, water and alcoholic drinks. A can of beer will set you back about US$6 on-board as opposed to about US$2.2 on ground, documenting an average mark-up of 160 percent.
Vice president of Kayak Asia Pacific Debby Soo said, “Low-cost carriers are providing a service when it comes to food and drink on board, which accounts for some of the mark-ups we see. However, it pays off to plan ahead and eat before you board, especially for short flights.”