Budget airlines depend on in-flight sales for long-haul routes

AirAsia has just started flying to Honolulu from Kuala Lumpur. Source: Shutterstock

TO compete with full-service airlines, budget carriers in Asia are pushing on-board sales to make up for steep discounts and cheap fares they offer.

A recent report on Today  highlighted “the battle for consumer dollars is quietly shifting to on-board sales” especially at a time when more budget airlines are introducing long-haul routes.

For instance, Singapore-based Scoot debuted their Athens-Singapore route while Malaysia-based AirAsia has just started flying to Honolulu from Kuala Lumpur. Both flights clock in over 10,000km and are the longest operated by any budget carrier.

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Flight Global magazine Asia finance editor Ellis Taylor told Today budget airlines were forced to turn to revenues from on-board ancillaries alongside continuous pressure to keep their ticket prices low.

“By having a broader selection on offer, budget carriers are more likely to gain additional sales that might make a marginal route profitable,” he said.

For many budget airlines, on-board sales are more profitable than ticket sales, pushing airlines to come up with strategic ways to boost shopping on-board.

For example, passengers can access sales catalogues on their own screens to order in-flight meals, high-speed Internet and other add-ons.

“The highest growth rates we’ve seen have been in ancillary products, and we expect to maintain this upward momentum with our improved offerings,” an AirAsia spokesman told Today.

“We expect ancillary revenue to improve as we go digital and make on-board purchases easier.”

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Last month, AirAsia launched its new in-flight menu – Santan – that includes dishes like Hainanese chicken rice, nasi lemak, pad thai, and Korean kimchi stir-fried chicken.

In the case of Scoot, its Athens route will see passengers getting a taste of Greek cuisine on top of services such as on-board WiFi and ScooTV, a service that allows travelers to stream entertainment to their personal devices.