Increasing ancillary revenues and average transaction value

Information supplied by Incentive Parking

For many years the approach taken by airlines and travel agents to selling airport parking & lounges has been the traditional consolidator model. This model involves a contractual middle man (the consolidator) managing contracts with inventory providers at all airports and then contracting directly with the airline or travel agent for distribution.

The airline then integrates inventory provided by the consolidator at various key customer interaction points between booking a flight and departure. Typically a customer may receive a parking, travel insurance or lounge offer at the last step of the flight booking process, attached to their flight booking confirmation; or an email sent at any time between booking the flight and departure.

In the UK the traditional consolidator model has grown in strength over the course of the last decade. The growth of this model has presented many challenges to airports including…

Direct relationships

The inability for airports and airlines to build direct relationships prevents them from working more closely. This hinders the ability to build in parking to aviation deals and to offer coordinated airport promotions via key distributors.

Distribution risk and commission exposure

The contractual middle men often take a high % in commission and control a significant % of the airports distribution (in some cases this is as high as 80%). For an airport this represents a significant risk and distribution cost as the consolidator controls the vast majority of their pre book sales.

Product mix

Many airports withhold premium products from consolidator channels to sell direct. This means that the airlines and tour operators don’t have access to the full range of products at many of the UK’s airports.

Customer data

Customer data is often owned by the consolidator. For future bookings this often means that the customer is lost to both the airline and airport as the customer books directly with the consolidator. 

To address these challenges a new solution, powered by Inventive’s Altitude Connect solution, has been launched in this sector. Over the past 12 months airlines have started to switch over from the traditional consolidator model, taking control of their ancillary revenues and building more direct relationships with key airports.

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