June 17, 2020
Social distancing could provide new upgrade opportunities, inspire new markets and be the spur for airlines and airports to work more closely together to enhance the end-to-end shopping experience by leveraging digital technologies.
Those were just some of the conclusions of airline and airport speakers participating in the recent FTE APEX Ancillary Virtual Event as they shared insights into how they are evolving their commercial approaches post COVID-19.
Speakers included Juha Jarvinen, CCO, Virgin Atlantic & President of the APEX Board; Andrew Middleton, Commercial Director, easyJet; Apple Ignacio, Director, Ancillaries, Cebu Pacific Air, Mariana Fonseca Medina, Managing Director, Digital, American Airlines; and Nigel Fanning, Head of Product & Ancillary Revenue, Jetstar Group, and Chris Annetts Strategy, Regulation and Customer Director, Heathrow.
Low-cost carrier, easyJet, resumed some flights on Monday and Middleton predicted a likely shift in demand. “We anticipate a shift to a younger demographic. In terms of the traditional ancillaries, historically there is a lower propensity from younger travellers, so we have to think differently about what our core product is. We also see a shift towards later booking profiles. That would put more emphasis on point-of-sale and how we are retailing our ancillaries at point-of-sale versus post-booking.”
Chris Annetts, Strategy, Regulation and Customer Director, Heathrow, said: “I think the COVID-19 crisis has really changed consumer behaviour. We have seen in the press how much online has grown, even in sectors that traditionally didn’t have a strong presence. We expect that to continue so we are already developing our capability, building it out and looking to start developing partnerships with airlines.”
While long-term flying with empty middle seats and social distancing inflight are seen as commercially unsustainable, Juha Jarvinen, CCO, Virgin Atlantic, said: “People want to do social distancing and there are ways to do this on the aircraft and we are happy to upgrade our passengers in premium classes. We do believe that there is more willingness to pay for such services. We hope we will get more business class bookings but if not, then at least ancillary revenue streams will be increasing through upgrades.” Noting the fact that load factors are initially expected to be low, Jarvinen said this will enable the airline to make these offers.
Apple Ignacio, Director, Ancillaries, Cebu Pacific Air, supported this view saying that she sees potential in monetising the middle seat as a premium product for passengers who want to distance from others.
Read full coverage of the virtual event here.