ATPCO partnering with UNEX Airlines have substantially increased their shares of ancillary revenues in recent years. While pure income from ticket revenue is likely to decline further, the importance of ancillary services in the overall product offerings of airlines will grow in the future. It is possible that the current COVID-19 crisis may even accelerate [...]
Most companies around the globe strive for future readiness and invest a lot of energy and resources in having a crystal clear picture of the future. Just envision the countless outlooks and forecasts produced within organizations or other institutions. All of them appear in fancy graphs with percentage-based accuracy and security. Nevertheless, all of them [...]
Three months after IATA released its 2020 forecast, the Covid-19 pandemic decimated the airline industry. IATA had optimistically projected the industry’s eleventh consecutive year in the black. Some governments are still hoping that the Covid-19 lock down is a temporary disruption and that national economies can simply be switched on when the “curve flattens.” The [...]
Customers are telling us that right now they finally find the time to rethink their strategies. They are open to stepping back from daily business and evaluating business models, processes and go to market approaches. Especially airline managers miss a noticeable differentiation in their companies’ product experience. "There is no major difference for a normal passenger [...]
Dynamic ancillary pricing to increase profitability by up to 30% While settling in on Sun Express flight XQ170 from Antalya to Hamburg, prior to take-off, I heard an announcement offering upgrades to XL seats. Paid onboard upgrades? On a leisure airline? This was new to me and a great example of good timing. Ancillary sales [...]
Hybrid forms in aviation – a doomed failure? At the core of strategic management, a firm’s goal is about gaining and sustaining a competitive advantage. At a corporate level, the two main strategic orientations of companies were defined as cost leadership or differentiation by Michael Porter back in the 1980s. Yet, competitive analysis has become [...]
“Airline alliances are useless.” A very common statement. Let’s check it out! Nearly 100 airlines are members of a branded airline alliance today, both legacy and LCC. Many of these joined their respective alliance 20 years and several CEO generations ago. Arguably, a re-evaluation is overdue. Prudent airline leaders, even if they believe in the merits of partnering, are looking for answers to these questions: Is my strategic alliance still working in my favor? Should I [...]
Who should stay and who should go The recent developments around German holiday airline Condor shed some light on one of the most difficult questions in crisis management, its aftermath, and organisational transformation in general: Which employees are critical to keep and which employees are easy to replace. Although scientists proclaim human resources are the most important resource for any business activity, a crisis or [...]
Artificial Intelligence Applications in the Travel Industry The travel industry, particularly its leisure segment, is ever changing, with new disruptive business models and products entering the market. Matured practices and processes become obsolete in extremely short periods, and the world we live in is becoming a wonderland of innovations, such as smart speakers and self-driving cars. In the coming years, such progress will continue and even accelerate. We will see a significant number of products and business models exiting the market, and consumer behaviors and [...]
Is Onboard Duty-free outdated? SAS has just decided to stop onboard duty-free sales as reported on ATW Online. SAS argues that changing customer behavior and sustainability considerations from fuel savings led to this decision. This is a rather surprising move at a time where airlines are extending their ancillaries portfolio. On the other hand, onboard [...]