Drumming up new revenue sources

Nok X.jpgCan airlines generate more revenue and improve passenger loyalty by thinking out of the box?

At the World Low-Cost Airlines Congress in London earlier this week, ancillary revenue opportunities were a hot topic. Airlines and consultants talked about how several carriers already generate revenues by offering frequent flyer-credit cards, selling advertising on seatbacks and selling hotel rooms, car rentals and holiday packages on their websites.

Airlines were urged to take it a step further and be more innovative. Recent examples highlighted include Ryanair’s plan to offer in-flight gambling and Nok Air  profiting from flight attendant recruitment by having companies pay to sponsor searches. One attendee suggested airlines sell on their website “surprise tickets” in which passengers do not know where they are going until they get to the airport.

In this era of record high oil prices, airlines clearly need to take advantage of whatever new extra revenue streams are available. But there are not necessarily any easy solutions because every local market is different in terms of what passengers will accept.

Take Nok Air, for example. Nok has games on-board and hawks merchandise, including from its advertising sponsors. “You have a captive audience in the cabin for one hour. You can do a lot of sales pitches,” says Nok vice-president of marketing Pinyor Pibusonggram.

For Thais this may be seen as fun but in other countries this can be seen as loud and annoying.

In typical Thai fashion, Nok also uses scantily clad “girls” who are paid only 」2 ($3.75) per day to help passengers check in using personal digital assistants or PDAs (see picture). Other airlines may also want to consider using PDAs held by staff in the airport lobby or even at the curb outside airport entrances to reduce the queues at check-in counters. But obviously not all airlines can get away with paying staff 」2 per day and in many countries they will not get away with skimpy uniforms.

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