The Future Of Aviation And Sales: How Airlines Can Monetize Passengers, And Why They Should - Forbes.com
POST
WRITTEN BY Valentino
Danchev
Founder,
President and CEO of Fidelis
Marketing Group,
overseeing the promotion of memberships and tours at luxury resorts in Latin
America.
The Future Of Aviation And Sales: How Airlines Can Monetize Passengers, And Why They Should
In a little over a century,
the commercial aviation industry has evolved from the first simple planes with wooden seats into a thriving industry with many airlines that the
International Civil Aviation Organization claims facilitate up
to 100,000 commercial
flights worldwide each day. However, perhaps due to economic and stakeholder
pressures, the golden age of aviation -- with its spacious seating and flight
attendants serving food on silver platters -- is far behind us.
To increase profits, more
seats are crammed into planes. I've also noticed that cushions seem thinner and less comfortable, and
on many airlines, seats simply don’t recline. Food, which was once seen as a
selling point, is simpler (if it’s even served) with less
focus on quality or flavor, and we’re seeing the introduction of new classes,
such as premium
economy, as ways to
drive revenue. The plethora of extra charges also shouldn’t be ignored, such as
additional fees to be seated in an exit row, checked baggage fees and
seat-selection charges, which are becoming the norm.
But what if I told you
that, as a frequent traveler and CEO of a vacation marketing company, I thought
airlines were going about increasing their profits in the wrong way?
Monetizing
Passengers -- A New Proposal
Airlines are largely
ignoring one key trend currently dominating the social and business landscape: monetization.
Every day, people do it: They monetize their homes through Airbnb, their social
media feeds through sponsored posts and their data through data-investment
platforms like Datavest. Businesses are doing it too; I've seen them sell blank
walls as ad space, rent out unused office cubicles as "hot desks" and
partner with third-party companies to increase sales. Airlines could also be
doing this, though it’s not passenger data they could monetize; it’s the
passengers themselves.
Think about it: A plane
used for international travel might
hold 350
passengers, while a domestic flight might carry around 150–180 passengers.
Multiply this 150-person capacity by the number of daily flights (100,000,
according to the figures above), and you have 15 million passengers flying per
day. These travelers are usually sitting idly -- particularly on domestic
flights. Some are reading; some are chatting, and some sitting and staring into
space. In short, they’re a captive audience. This offers a prime
opportunity for select monetization.
How? It’s fairly simple.
Airlines can monetize this captive audience by partnering with companies to
sell products on board during flights. Any type of product or service, from
insurance to spa treatments, could be offered for sign-up or sold for pick-up
at the airport or for delivery to the passengers’ residence. Flight attendants,
whose roles revolve largely around safety instruction and customer service,
could be trained specifically to sell partner products. Or, better yet, partner
companies could train their own flight attendants in safety and service basics,
and airlines could choose to outsource from these companies to save on labor
costs -- or train their own.
This could enable airlines
to add additional revenue streams while enabling partner-brands to leverage the
airlines’ captive audience to make sales. While this seems like a simple
money-making exercise in theory, it also begs the question: What’s in it for
the passenger?
Why Passengers
Won’t Balk
No one enjoys being stuffed
in a cramped economy seat for hours on end, and that experience could be made
significantly less enjoyable by a salesperson reciting a pitch during an
already uncomfortable flight. What exactly could persuade a passenger to
participate in this midair sales floor? An obvious consideration would be a
reduction in airfares, which is something we can already see in action --
albeit on a smaller scale -- with Dublin-based airline RyanAir.
RyanAir offers some of the
cheapest flights throughout Europe. It reportedly learned to do so in part from Southwest's
model of leveraging connections with smaller airports. But that’s not all
they’re doing to reduce airfares and increase profits; they’re also leveraging
their passengers to make sales in what they’ve affectionately dubbed Runway
Retail, an in-flight catalog.
Through this controversial scheme, RyanAir has attendants sell products to passengers throughout
flights. It’s likely because of this that RyanAir has managed to reduce
their average ticket price to under
€50.00, with some
as low as €5. Arrangements like these could also
be a boon for flight attendants if they receive bonuses based on products they
sell throughout the flight.
As to whether the
monetization of passengers would be successful if it were widely adopted,
RyanAir is a shining example. From the threat of closing
down to becoming a
well-known airline, it’s clear there is something to be gained in turning the
fuselage into a sales floor.
A Return To Luxury?
But what about the
passengers who firmly don’t want people selling to them during their flights?
If this monetization strategy is widely adopted, we would ideally see an
increase in standards for regular flights. Why? It’s undeniable that some
passengers would want a choice between a cheaper flight where they’re being
sold to or a flight where they can pay extra -- perhaps the equivalent of a
standard airfare today -- to be left in peace. Furthermore, airlines might want
passengers to buy these tickets and would ideally beef up their offering to
compete in terms of quality and luxurious extras.
What would this look like?
Ideally, economy class would be less cramped, with more space between seats and
a greater range for reclining seats. Airlines could invest more in food quality
and entertainment, and because having fewer seats would result in fewer
passengers on board, flight attendants could provide better service. In short:
we could see a return to the luxury and perks of the golden age of aviation,
minus the onboard
smoking.
Is this a little too much
"blue-sky thinking"? Not necessarily. If more businesses become
intertwined with airlines in the spirit of monetization, and customers see the
benefits of reduced airfares and increased quality, monetizing passengers and
in-air sales opportunities could very well be the future of the aviation
industry.
Forbes
Business Development Council is an invitation-only community for sales and
biz dev executives.
Founder, President and CEO of Fidelis Marketing Group, overseeing the promotion of memberships and
tours at luxury resorts in Latin America. Read
Valentino Danchev's full
Comentarios
Publicar un comentario