Has the drive for ancillary revenues gone too far?
On a two-hour easyJet flight I was on four days ago, I was offered for sale not only snacks and beverages but gaming cards, train tickets, take-away small champagne bottles and a teddy bear the flight attendant promised can be sold for a profit on eBay.
I’m all for low-cost carriers keeping air fares low by selling goods on their website and on board aircraft. But the non-stop peddling of items can become annoying, especially on a flight where you can’t drown out all the hawking with in-flight entertainment.
The Airbus A319′s public address system was on almost for my entire flight as the lead flight attendant tried repeatedly to persuade passengers to buy certain items. Gaming cards were sold not once but twice on the short flight and we got a full recount of recent winners that had travelled on earlier flights. Small champagne bottles were offered not only for in-flight consumption but it was suggested passengers should buy extra bottles and take them to New Years Eve celebrations.
EasyJet has been at the forefront of industry efforts to drum up new ancillary revenues. In the 12 months ending 30 September 2006, the carrier generated EURO131 million ($255 million) in ancillary revenues, an increase of 34% compared with the previous year. That equates to 86 pence per passenger and clearly, if sales pitches on their flights are any indication, there is room for more revenue expansion.
As part of its drive to further increase ancillary revenues in its current fiscal year, easyJet recently began charging for early boarding. But on the flight I took easyJet’s “Speedy Boarding” product only guarantees you a choice seat on the bus that takes you to the aircraft. In the end it didn’t matter if you checked in early or bought the “speedy boarding” privilege – there was a mad dash to the front and rear staircases when the bus arrived at the aircraft. In fact, the people who checked in last ended up boarding the bus last, giving them the best position when the doors of the bus again opened when it arrived at the aircraft.
Onboard gambling represents another potential new source of ancillary revenues. Ryanair, which generated EURO259 million ($339 million) in ancillary revenues for the year ending 30 September 2006, will introduce onboard gambling later this year. EasyJet has so far elected not to follow its rival and introduce onboard gambling. But at least onboard gambling is a quiet activity, with passengers gambling using their mobile phones and other GPRS-enabled devices such as Blackberries.