Republic Airways has signed a deal with GuestLogix to implement a sweeping onboard retailing programme on aircraft flown by its subsidiaries, Frontier Airlines and Midwest Airlines, in a bid to increase ancillary revenue while enhancing the passenger experience.
The multi-year agreement will see Frontier and Midwest replace their current onboard credit card readers with GuestLogix point-of-sale (POS) handheld devices. It also calls for GuestLogix to provide backend inventory controls "to effectively manage the movement of physical products onboard", says the firm.
Significantly, GuestLogix will also deploy its 'OnTouch' branded onboard store solution to sell destination-based travel relevant products and services to passengers aboard Frontier and Midwest. These items include transportation services for ground connections, event tickets, and various recreational offers, such as ski packages, says GuestLogix vice-president of marketing and communications Josef Zankowicz.
"There may be material on board the plane that would describe these offers, such as in a magazine, or there may be announcements [by the flight attendants]. Our POS handheld devices will print out the vouchers or tickets," he says.
Republic Airways executive vice-president and COO Wayne Heller says OnTouch will give Frontier and Midwest customers the added benefit of products "uniquely tailored by destination" while the company will realize "improved operational efficiencies resulting from a consolidated platform that provides the shortest path to new revenue creation".
American Airlines is already trialing the sale of ground connections "so this is something that we have been working on with the airlines for the last six months and it's now starting to come into the market", says Zankowicz.
At present, POS devices do not provide real-time credit card transactions, but that is expected to change. Noting that there is already connectivity present on aircraft to support avionics, Zankowicz reveals GuestLogix is "working with suppliers of those systems to harness that connectivity so we can do real-time credit card transactions".
But airlines are also increasingly equipping their aircraft with larger pipes to support passenger connectivity. And, with that, comes the ability for passengers to simply transact online via their own personal electronic devices. Nonetheless, GuestLogix sees a strong future for its onboard retailing programmes.
"I think the media is getting ahead of itself on where [the industry is at] with connectivity deployments. About 3% of the worldwide fleet is Internet-enabled, and with [equipage] costs ranging anywhere from $150,000 to $300,000 per plane, the economic model needs to be worked out a bit before this can be offered full-blown across all aircraft. So it will definitely get there, it is just a question of when," says Zankowicz.
"Unfettered access to the Internet is something we speak about quite a bit [with] our airline partners and our approach is we believe the best way that airlines can take advantage of connectivity is to control the [Internet] access and wall it in, and provide services that are meaningful for customers. The purchasing or buying and selling has to be holistic, so it needs to take advantage of everything that's available - that's the IFE on board, devices people bring on board and through onboard retail systems."