One of the potential side effects of the ancillary revenue phenomenon is that “anonymous shopping” may go the way of the paper airline ticket.
Robert Buckman, director of airline distribution strategies for Amadeus North America, believes that in the not-too-distant future, travelers will have “digital personalities” that will identify them before an air fare search begins.
“Let’s say you are on Expedia, and you want to go from St. Louis to New York La Guardia,” Buckman said.
“You are executive platinum on American Airlines. But as you are shopping, American doesn’t know this. When we shop, we’re all anonymous.”
Airlines’ ancillary revenue policies extend benefits to their most frequent customers; checked-bags fees are waived, for example.
“American would love to say, ‘I recognize you, and here is the fare without the fee,’” Buckman said.
“Or maybe you’re not executive platinum, but the carrier has lost your bag twice in the last few months, so it will waive the bag fee for your next flight,” he said.
Carriers will be able to “see” shoppers and deliver their search results, intelligently and in real time, according to customer value, he said.
Buckman noted that a frequent flyer number would not be sufficient to identify the customer. Most travelers belong to more than one program, so when they shop at an online travel agency or through their agents’ GDS, they need an additional way of saying, “Hello, it’s me!”
Amadeus has been active in the development of technology standards for distribution of ancillary services through multiple channels, and Buckman said those efforts could bear fruit within weeks.
Four carriers are participating in a pilot of ancillary service distribution in their home markets, he said.
Buckman noted that it is unfortunate that U.S. carriers introduced ancillary services to travelers with the checked-bag fee, rather than with a new service that conveys added value to the customer.
Because of the fuel and economic crises of the last three years, “carriers have had to make difficult choices,” Buckman said.
But now that airlines’ fortunes are stabilizing, “I would like to see us get ancillary revenue right,” he said.
“I’m optimistic that carriers will find ways to bring greater value to the customer.”
United Airlines is emerging as a leader in this area, he said.
Travel Options by United, available on united.com, is an example of ancillary services presented in a way that is attractive to consumers, not off-putting.
Among the options is Economy Plus One-Time Option, which allows customers to purchase Economy Plus seats with extra legroom anytime between the booking and check-in.
Premier Baggage is a yearly subscription that costs $249 and allows the purchaser and up to eight companions traveling on the same confirmation number to check two bags without paying additional fees.
Premier Travel bundles extra legroom, priority security line access and boarding, bonus miles and two checked bags, starting at $47. An upgraded version adds access to United’s Red Carpet Lounge and additional bonus mileage.
“United is marrying its ancillary services program with differentiation in its product,” Buckman said.
If airlines became real retailers of ancillary services, he said, “it could help them create a sustainable economic model.
“It’s not just about how to collect a bag fee.”