By Jessica Pook
The luxury amenity kit has become a premium cabin privilege but what if Economy passengers could ‘buy’ into that elite experience while sitting down the back? Jessica Pook considers the implications
In December last year Etihad decided to make its Business amenity kits available to passengers in Economy by offering them for purchase onboard at attractive prices. The retailed items included high end brands that were previously exclusive to Business passengers, such as Christian Lacroix bags and designer cotton sleepwear, skincare products by Hungarian luxury brand Omorovicza, and Piper-Heidsieck Curvee Brut NV champagne.
No doubt those Etihad passengers who bought into the brands enjoyed an enhanced experience in their Economy seat. They could also have upgraded their experience with paid-for lounge access and chauffeur transfers, neighbour-free seats and extra-legroom seats. But if this is the start of a trend, could offering these exclusive items ultimately devalue the premium offering and undermine the status of amenity kits as a collectable item? And is there really a demand for such products in Economy.
Linda Celestino, vp guest experience and delivery at Etihad Airways, explains the thinking behind the move thus: “We wanted to personalise and enhance the inflight experience for guests, regardless of what cabin they might be travelling in. For us, it’s no longer about creating an experience for each cabin; it is all about creating an experience for each individual guest.
Today’s consumer is far more hybrid – they may be happy to travel in Economy, but want to upgrade their experience with premium products, so the comfort kits are one way for us to allow for changing customer demands. We wanted to empower our guests by giving them more choice – options that they can then use to design their journey, and pay for the exact experience that they want.
Our new personalised offering allows them to customise their experience. Our comfort kits help guests to feel more refreshed and comfortable during their journey, at an affordable price point. They also have the opportunity to take home these luxury items as keepsakes from their trip. This is all part of Etihad’s approach to enhance the service for Economy passengers, which also recently saw us introduce pay-for lounge access and chauffeur transfers at a number of airports on the airline’s global network, neighbour-free seats and extra-legroom seats.”
So is Etihad onto something. Research from Galileo Watermark (GW)suggests Economy passengers are the most financially savvy when travelling. They appreciate added value and service offerings, particularly on ultra long haul flights, but, says Ian Linaker, ceo of GW: “Further work needs to be done to understand the impact on premium cabins of selling amenities in the Economy cabin. No doubt airlines are asking questions internally about the trade-off between incremental sales of such kits and the subsequent cost savings from lower volumes, versus the potential erosion of brand equity, value and customer perception in the premium cabin. All of which ultimately affects the long term value/revenue per kilometres flown of their most valuable, trusted, premium passenger.
He also questions how airlines would decide the buy-on-board prices for kits. “What will any retail price say about the kit itself, both for the Economy cabin, and to those in the premium cabins? In instances where a branded bag is used, the airline would be quantifying the value of that brand, which does add a layer of complexity.”
Wolfgang Bücherl, managing director of SkySupply, also sees some challenges: “Airlines need to determine which brands are most likely to be identified as high end by the majority of their passengers and what price point reflects ‘luxury’. Trying to sell passengers something at a perceived competitive price could well be the wrong strategy. It is also questionable as to whether such an add-on will really appeal in less brand-conscious markets. We have to recognise that passengers seated in Economy cover a very broad demographic and not all who fly are as brand aware or fixated in the same way.”
Increasingly premium amenity kits are becoming more of a ‘gift’ than a functional kit purely for onboard use, and now the focus is often on their use and enjoyment beyond the flight. Pampering products flaunting designer labels, lush toiletries, perfumes and even scented candles are included, and it’s becoming increasingly standard for the bags to double as an iPad case, luxury cosmetics bag or on-trend clutch. Where once amenity kit refreshes were infrequent, now change and enhancement has become more commonplace.
While most suppliers accept there could be a place for retailed amenities in Economy and that it may be operationally and commercially attractive, they warn homogenisation of cabins, on any level, needs to be handled carefully. Bücherl adds: “If an airline has invested in a strong and appealing premium offer there is always a risk that any distractions, or actions taking away from the specialty of that option will be a mistake.
“Premium must mean exclusive and reflect something more than is offered in other classes, be it in amenities or service. If kits sold in the back are more high-end than those provided in the premium cabins, the paying premium passenger may well be upset; and if the kits are the same as those in the premium cabins there is also an erosion of the class distinction the airline promotes. Airlines have had success promoting collectables, they’ve proved popular with those premium passengers with access to them, so broadening their availability needs some very considered thinking.”
Lisa Benzaoui, ceo of Global Inflight Products (GIP) also believes it is crucial that airlines continue to differentiate between the offering in Business and Economy, saying: “It is important to offer similar, but slightly different products and kits to ensure that the premium cabin passengers continue to enjoy an elevated inflight experience, for example, smaller sized cosmetics or a different bag style. Premium passengers expect exceptional amenities and airlines must exceed their passengers’ expectations to ensure repeat customers.”
Commenting on the placement of premium amenities in Economy Petros Sakkis, chief marketing officer of WESSCO, said: “From the passengers’ perspective, luxury amenities for sale could be a much-welcomed offering. On the other hand, airlines must be very careful with potential dilution of the value proposition for their premium cabins. When possible, we think creating distinct offerings (whether buy-on-board or gifted) for specific passenger segments is the best way to go. This also delivers the most value for airline brand partners.” GW’s research indicated that the removal of the amenity kit completely in Economy had a negative impact on passenger perceptions of an airline.
“Passengers translate its removal as a step-too-far in squeezing costs – with many passengers expecting at least some comfort items on these routes,” says Linaker.
He adds: “Etihad appears to be creating experiences for smaller customer segments, and going beyond the existing restrictive categories of full-service versus low-cost carrier. This is something I see as becoming more and more prevalent in the low-cost arena. The challenge will be for full service airlines to execute this strategy without damaging consumer perception, or taking away from the intrinsic value in other cabins. One day, it could be feasible that we have five variants of an Economy seat on the same aircraft, from minimal legroom to something exceeding a Premium Economy product.”
Celestino recognises the risks but added: “Whenever we evolve our product and service, there is a roadmap of due diligence where we measure guest perception, guest values, brand risk, industry trends and overall commercial viability. We also need to ensure that with every new product or service change introduced to the cabin, our cabin crew are thoroughly briefed in order to maintain a consistent experience for the guest. There is always an element of risk to being a ‘first mover’ or ‘disrupter,’ but this is in our DNA here at Etihad Airways, and we are excited to be on this journey.”
She believes that so long as the product in other cabins is constantly evolving too, all passengers will be content. “Guests in Etihad’s luxury cabins including First, Business and The Residence will continue to receive a complimentary array of collectable luxury amenities including the Christian Lacroix kit and sleepwear. Even when we unveil new products or changes to our product offering, we are always thinking about the next innovation that will follow. We never stand still and look forward to continuing to enhance the travel experience for all passengers travelling with Etihad.
“While we can’t comment on the strategies of other airlines, at Etihad we believe the ‘airline of choices’ model is the way of the future, as we move away from limiting customer experience to the cabin they are sitting in, and head towards a more personalised experience wherever the passenger is sitting,” Celestino said. In January the airline also launched buy-on-board snack boxes which include a carefully selected variety of snacks to suit different tastes, from movie treats such as crisps and sweets, to healthier organic options such as mixed nuts and fruit bites, which are also vegan and gluten free. Passengers still peckish after the meal service can opt into these to salve any mid-flight cravings they may be feeling or to help pass the time.
It’s early days for this programme but the success of Champagne sales in Economy bodes well. Celestino added: “Turns out, guests who are travelling are keen on celebrating, whether they’re just happy to be going on holiday, or toasting a special occasion.”
From the suppliers perspective Bücherl concludes: “As a supplier we value inclusion in the discussions and certainly if it takes off it’s ‘good for business’ but it is a question which will receive different reactions, not just from all the stakeholders in the industry,
but finally from the passenger groups who mostly want punctuality, good service, and value for money. The question is will this gesture of luxury flatter to deceive? It is an interesting debate to be aired.” •