Sit down, buckle up and have your credit card ready. Bad pun notwithstanding, onboard shopping is about to take off — and the offerings go way beyond aerator sandals and bug-zapper rackets.
“The airlines have traditionally looked at ancillary revenue simply as a way to monetize services,” said Brett Proud, executive vice president for new markets and products for GuestLogix, a maker of hand-held credit card readers. “Now, though, they’re looking at a flight leg more like a retail outlet.”
In fact, thanks to new technology, there may be nothing you can’t buy from the, ahem, comfort of your economy-class seat. The real question, however, will likely be whether travelers, already dealing with rising fares and fees gone wild, will consider buying while flying a convenient service or just another squeeze.
Coffee, tea or a Michael Kors tote bag
Of course, shopping at 35,000 feet is nothing new. SkyMall, the marketing/publishing company behind those ubiquitous seat-pocket catalogs, has been enticing (and amusing) fliers for almost 20 years. Seen by approximately 88 percent of all domestic air passengers, the catalogs owe their success to the fact that their target audience is essentially trapped.
What is new is the convergence of unbundled airfares (fewer onboard services provided gratis), improved technology (lower-cost hand-held card readers) and, depending on your point of view, the airlines’ ongoing efforts to provide enhanced services or their desire to wring more money out of every passenger.
The options are expanding faster than an Airblown Inflatable Movie Screen ($249.99 at Skymall.com). This summer, for example, Virgin America added the SkyMall catalog to Red, its onboard entertainment system, allowing passengers to actually order products in-flight rather than simply noting them for future purchase. Using what the airline calls “the first seatback digital shopping platform in North America,” passengers can now buy a Michael Kors tote ($268), Sony PSP game console ($329) and hundreds of other products.
Meanwhile, American Airlines has been testing a program in which passengers on London-bound flights from New York and Dallas can purchase Heathrow Express train tickets from flight attendants with hand-held card readers. The airline sells the tickets for £18 ($28) vs. £16.50 ($25.65) at Heathrow.
As a partner in that program, Proud suggests that the Heathrow service is just the beginning and that passengers may soon be able to buy everything from theme-park passes to Broadway show tickets before they land. “More and more,” he said, “airlines are seeing the sweet spot as can they offer enhanced value and at that same time monetize it?”
Avoiding the souk in the sky
While such efforts will undoubtedly expand, the undisputed leaders in onboard commerce will likely remain Europe’s low-cost carriers. On Ryanair, for example, flight attendants hawk everything from snacks and drinks to scratch tickets and smokeless cigarettes. The average passenger, says the airline, spends $15 on post-ticket purchases.
By comparison, U.S. airlines are still making chump change via onboard selling. “The airlines that do it well are probably making $4 per passenger, but that’s on the high end,” said Jay Sorensen, president of IdeaWorks, an ancillary-revenue consulting company. “Passengers may be a captive audience, but it’s not an easy environment for retail.”
In fact, there are several reasons Ryanair’s souk in the sky business model may not fly in the U.S. On the food front, most airlines still offer some sort of complimentary snacks and beverages. “If you offer something for free, most people will stop with that,” said Sorensen. (On the other hand, offering nothing at all, as US Airways tried to do a few years ago, only upsets passengers more.)
Second, many American travelers are still angry about à la carte fees in general and resistant to the idea of in-flight selling, especially when it smacks of a hard sell. Given the reaction many passengers have to flight attendants hawking credit-card applications, pitching even more products and services may engender more ill will than ancillary revenue.
And speaking of flight attendants, any efforts to sell more than food and beverage onboard will require their cooperation, which is not guaranteed. “We’ve already had enough job descriptions added over the last 10 years,” said Sara Pinto Keagle, a Houston-based flight attendant and author of theflyingpinto.com blog. “I don’t want to add salesperson to them.”
None of which will likely stop the airlines from trying to expand what they see as a viable opportunity for ancillary sales. At American, those Heathrow Express tickets are now also being sold pre-flight by roaming gate agents, while United recently rolled out a program in which economy passengers on select international flights can pre-order premium meals ($19) online, paying for them onboard.
Ultimately, of course, the outcome of such efforts will be determined by whether passengers respond positively to the enhanced offerings or resent the serial sales pitches. For Proud of GuestLogix, it’s all about giving them choices: “At the end of the day, if a passenger doesn’t want to buy something, they don’t have to buy it. That’s the user-pay model.”