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Rohit Talwar The Future for Airline Retail - ARC London 30 June 2011 handout


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Presentation on trends, innovation strategies, nw business models and concepts for airlines, airports and travel retail

Presentation on trends, innovation strategies, nw business models and concepts for airlines, airports and travel retail

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  • 1. The Future for Airline Retail in a Decade of ChangeAirline Retail Conference London June 30th 2011 Rohit Talwar CEO - Fast Future
  • 2. ContentsPresentation p3Background Notes p 46About Fast Future p 80Image Sources p 89
  • 3. Where’s the Growth? Passenger Share of ExtendingConversion? Wallet? Relationships?
  • 4. Growth is not Guaranteed…
  • 5. …Thinking is Back in Fashion
  • 6. Transformational Change? It’s Only Just Begun
  • 7. Demographic Destinies 2 billion more people in 40 years –Demographics is Driving Economics 448 739 691 5231 344 1998 4157 729 1030 585 2010 2050 Source : United Nations
  • 8. Life Redefined – Lifespans are IncreasingUnder 50’s have 90%chance of living to 100.Aubrey de Grey suggestswe could live to 500 or 1000What are the health,consumption and resourceimplications?What kind of opportunitieswill be created?
  • 9. Size of Global Middle Class
  • 10. Millions of Asians with $3,000 Disposable Income1000 945 900 800 700 600 570 500 400 300 200 100 0 2010 2015
  • 11. Asian Consumer Spending - $32 Trillion by 2030?
  • 12. TMT – Convergence and ImmersionTelephony Connectivity• Voice • Cellular• Messaging • Up to 14 bands• SIM card • WLAN/BT• Phonebook • GPS• Ring Tones • NFC• Security • FMData/ MultimediaEnterprise • Camera 8-16M • Camcorder• 100Mbps • 24M Color Display• Email • Memory (160GB)• IMS • Multiformat A/V• Browsing • HD Video/TV out• VPN • Games• PIM• Ecommerce Software (50-100M Tps) • Protocols • DRM• Payments • Middleware • Applications • User Interface • Minimize fragmentation
  • 13. What I Want – When I Want
  • 14. Next Generation Smart Phones
  • 15. Holographic Laptops
  • 16. Gesture Interfaces
  • 17. Personalization
  • 18. Intensified Global Competition Today - US – 3 Seats per head / China 0.3 / India 0.1 Asia – a third of all flyers (2013) and travel spend (2020)
  • 19. Redistribution of Aviation Profit Pools
  • 20. Duty Free Market Innovation
  • 21. Catalog Extension Kurt Geiger
  • 22. Duty Free Innovation: Entertainment
  • 23. The Future –From Cabin to Cash Register
  • 24. Leveraging Wi-Fi
  • 25. Integrating Physical and Virtual
  • 26. Leveraging Customer Insight
  • 27. Daily Social Media Offers e.g. Twitter
  • 28. Passenger Centric Retail
  • 29. Passenger Centric The Virgin Red StoreSingle swipe ‘open tab’
  • 30. Context Related Services
  • 31. Personalised Advertising
  • 32. Partner Tie-insPullman Bangkok King Power Hotel
  • 33. Rethinking the Experience e.g. Korean Air
  • 34. Tie-ins with Airport Retaile.g. Booking / Boarding Pass Offers
  • 35. Pop Up Stores
  • 36. Mixed Format
  • 37. In-flight Travel Agency
  • 38. Auctions - The $17,739 iPad
  • 39. Air Sahara/Jetlite
  • 40. Leveraging Apps
  • 41. Attracting Brandse.g. Virgin / Courvoisier
  • 42. In-flight Partnership
  • 43. Brand Marketing Partnerships
  • 44. Outsourcing In-flight Duty Free e.g. BA / Tourvest
  • 45. Conclusions• Huge untapped potential• Technology is a key enabler• Encourage innovation• Experiment• Work with the value chain
  • 46. Background Notes
  • 47. The Future – From Cabin to Cash Register• The Airline Weekly GXI Onboard Retail Benchmark 2009, the world‘s largest collection of aggregated data for onboard retail sales, has been released.• Onboard retail service can mean very different things depending on where a carrier is based. According to the benchmark analysis, while North American carriers have shifted their models to selling food, drinks and so-called comfort items—blankets, pillows, headsets etc.—the Asian market remains resistant.• Only 10% of passengers boarding Asian carriers can purchase food or beverage on board. That figure compares with 68% in the Americas. In Europe, the Mideast and Africa (EMEA), 32% of carrier traffic has made the leap.• The numbers are almost opposite when it comes to duty free sales. In Asia, 74% of carriers have a duty free onboard retail component on their international flights. In EMEA, it‘s 79%. In North America it‘s only 54%. Note that these numbers are weighted on total passengers and duty free offerings only apply to international flights. Source: Airline Weekly, February 2010
  • 48. The Future – From Cabin to Cash Register• Apparently it‘s tough to squeeze an extra dollar out of a passenger. Across the industry, the average carrier with an onboard retail component (that is, selling any combination of food, beverage, IFE, and comfort items) earned $.72 per passenger in 2009.• However, when looking at carriers in the top 10 percentile, that average climbs to nearly $2. What are the top performers doing differently?• Industry wide, 6% of buy-on-board sales are from soft drinks and other non- alcoholic beverages such as juice, water and coffee. Among top performers, the number rises to 31%. When looking at beverage sales only, top performers earn more than three times the industry average of $.29. The key factor, according to the report, is that top performers are charging for non-alcoholic beverages. Source: Airline Weekly, February 2010
  • 49. Leveraging Wi-Fi• Row 44 provides inflight broadband connectivity for the passengers, cockpit and crew of commercial aircraft.• Howard Lefkowitz, Row 44‘s chief commercial officer says he thinks that airlines, eager for new revenue, will sign onto a new ‗private labeled portal,‘ the details of which Row 44 will announce sometime in 2011.• It‘s a ‗walled garden,‘ branded and designed by Row 44 for a particular airline.• It will offer live interactive concierge and retail services, including destination-specific reservations for hotels, restaurants and shows says Mr. Lefkowitz. Source: New York Times, May 2011
  • 50. What Will the Future of Onboard Retail Look Like? • In surveying travellers globally, GuestLogix found that more than half would take advantage of destination-related offers onboard a flight. The company expect items such as tickets to entertainment, ground transportation, attractions, tours and other offers that add immediate value to a trip to be in demand, not just in Asia, but around the world. • ‗In response, leading onboard duty-free concessionaires will evolve their business models to include broader shopping categories with the convenience of home delivery. This will represent the next wave in onboard innovation that will usher in other important changes in the onboard experience.‘ • ‗Airlines will need to upgrade their existing POS systems to meet more stringent global payment standards. As connectivity slowly takes its place onboard aircraft, payments will incorporate real-time credit card authorisations to support higher-value transactions.‘Source: Retail in Asia, April 2011
  • 51. Future of In-flight Retail• By Brett Proud, GuestLogix• ‗The new in-flight retail environment will be distinguished not by the reselling of once-included products and services, but rather by embracing and extending the relationship between airline and passenger. It will be marked by accurate assessments of consumer needs and wants and by the fulfillment of these at any (and every) touch point of the journey. It will be defined by customer experience and framed by retail-informed strategies of merchandising and product mix.‘• ‗Creating and promoting a successful customer relationship may be second nature for ground-bound retailers but for airlines it means re-conceptualising the passenger.‘• ‗While the unbundled airfare relies on presenting fee-or-no-fee options to passengers for basic, almost compulsory, products and services – a checked bag, a seat assignment – the new approach to in-flight retail puts the emphasis on the passenger.‘ Source: Travel Tourism Middle East, June 2011
  • 52. Future of In-flight Retail• ‗While the customisation of a flight experience during the booking process certainly leverages the power of choice to deliver ancillary revenue, it does not extend through the duration of the flight, much less after disembarkation‘.• ‗The onboard store attempts to answer the questions: ‗Beyond the basics, what does a customer on an airplane want? And what will they want or need before and after their flight?‘ That answer is found in research and data mining but ultimately it is found in a relationship with a passenger.‘• ‗This is not to say that airlines have no relationships with their passengers; on the contrary, much effort has been spent over the years in promoting loyalty and extending the airline brand beyond the flight (with cobranded credit cards etc). What the new in-flight retail approach does, however, is apply different principles to the business of onboard retailing to extend that relationship with the customer beyond the core product offered by the airline (a ticket) – which is precisely why this approach is the future of the industry.‘ Source: Travel Tourism Middle East, June 2011
  • 53. Future of In-flight Retail• ‗Within the onboard store, virtual shelves replace physical shelves with great effect. Products are offered based on predetermined tastes and preferences, flight duration and destination. A brand can be established and extended through interaction with this onboard store – much as it has for most of the retail success stories in the past decade. But in a controlled Wi Fi-enabled environment or through the use of smart wireless point-of-sale devices, passengers can explore the onboard store from the comfort of their seat as well as interact with in-flight entertainment systems through their own personal electronic devices.‘• ‗Airlines also have information on their passengers‘ demographics, itinerary and immediate purpose (i.e. business or leisure) readily available. Traditional retailers would have to spend countless weeks collecting data – and probably paying market analysts to interpret it – to get the sort of valuable information airlines have at their fingertips. Utilising this data to develop a compelling retail experience is central to the onboard store approach and bound to become industry standard very soon.‘ Source: Travel Tourism Middle East, June 2011
  • 54. Passenger Centric Retail• Australia‘s Qantas Airways is set to deploy a touchscreen technology solution for use in its onboard store.• ―Speed and ease are fundamental in enabling us to deliver a new level of customer service to our travellers,‖ said Mr. Eric Jelinek, Head of In-flight Services at Qantas. ―We believe the implementation of an onboard retailing technology and merchandising platform, through Alpha and GuestLogix, will help us to enhance the in-flight experience for our customers.‖• In addition to enhancing its current onboard duty free program, the GuestLogix deployment provides Qantas with tools to create, manage and control a more comprehensive branded onboard store.• Qantas will be able to develop strategic offerings that evolve standard onboard retailing initiatives into much more passenger-driven, travel-relevant, destination based programs. Source: Enterprise Innovation, October 2010
  • 55. Passenger Centric The Virgin Red Store• Virgin America‘s award-winning Red™ entertainment platform, has been updated to allow travelers access to a host of new amenities, including next generation, enhanced terrain view Google Maps, an open tab service for the airline‘s one-of-a-kind on-demand menu and the first ever seatback in-flight digital shopping platform.• With the Red store, Virgin America and SkyMall have teamed up to give flyers the chance to shop from their seatback at 35,000 feet from hundreds of top brands like Sony, Canon, Sharp and Michael Kors.• The debut of the Red Store marks the first time that SkyMall has developed a product line designed specifically for purchase through an airline seat- back entertainment system. In addition to a unique in-flight shopping experience and a range of best-selling products, purchases made in the sky via the Red store will allow guests to earn two points toward the airline‘s Elevate Frequent Flyer Program for every one dollar spent. Source: Virgin America, July 2010
  • 56. Passenger Centric The Virgin Red Store• The system also includes:• Google Maps upgrades: Virgin America‘s previous Google Maps platform led the industry with interactive maps with multiple levels of zoom. The enhanced system will feature terrain view maps with fresher images and eight levels of zoom functionality, so travelers can see the actual topography over which they are flying.• An "open tab": Guests can now swipe their credit card just once per flight and order food, cocktails, movies and more – and keep a tab running during the flight. With one swipe, travelers can peruse and purchase items, including bar hopping (or ordering drinks for the plane), order from the food menu and watch latest release Hollywood movies on demand.• Premium food pairings: Virgin America is now providing suggestions on pairings that come at a discounted price via their Red in-flight menu system. Pairing examples include a Pacific brie and turkey sandwich, paired with PopChips and Peach White Honest Tea available for $13.60. Source: Virgin America, July 2010
  • 57. Building the Infrastructure• Emirates‘ signature ―ICE‖ (information, communication, entertainment) platform, powered by Panasonic Avionics‘ eX2 system, is a Strategy Award Winner from 2010.• In addition to offering near endless entertainment choices, ICE uses Inmarsat L-band satellite-based connectivity and a standard ACARS datalink to provide passengers with news and sports updates in-flight. Passengers also have access to seatback dial-up e-mail and SMS communications, as well as satcom telephony. Source: Airline Strategy Awards, 2010
  • 58. Building the Infrastructure• Emirates vice-president Patrick Brannelly doesn‘t believe that connectivity poses a threat to its IFE system. Instead, the carrier sees huge potential in leveraging ICE to connect on a more personal level with passengers.• ―We don‘t see [ICE] as embedded IFE. These systems aren‘t just [about] entertainment. They‘re so much more. They are the portals through which we communicate with our customer, and through which they communicate with the world. As we go forward in the future, we‘ll be doing more and more with those systems. Some of that really good stuff in the future is about making that person‘s life easier.‖ Source: Airline Strategy Awards, 2010
  • 59. Background Note Rethinking the Experience e.g. Korean Air • Premium passengers on Korean Airs upcoming Airbus A380 superjumbo jets will be able to take advantage of an onboard duty-free shop, reports FlightGlobal. • The Korean carrier will begin operating its first A380 jet on June 10 of this year, with nine other aircraft entering service soon afterward. Korean Air will reportedly become the first airline in the world to feature a flying duty-free shop. • "The shop replaces 13 seats on the aircraft so youre losing a lot of revenue, but the Korean mentality is that they buy all the duty free on every flight," said Chris Wetter, the sales director for AIM Aviation, the company that designed the new duty-free stores. • Each onboard shop will be equipped with five display units, each of which can hold up to 66 pounds of merchandise. Overall, the store has room to display up to 64 different individual items. • Once the jet is off the ground, full-time sales staff will take products out of storage and set up the store. First class passengers are then given access to the shops wares, after which the business class travelers are allowed to peruse the merchandise.Source: Access Fares, April 2011
  • 60. Background Note Tie-ins with Airport Retail e.g. Booking / Boarding Pass Offers• Pullman Bangkok King Power hotel, the first Pullman hotel in the world, is offering more value for travelers to enjoy upscale lifestyle and shopping experiences with the Shopping Spree Special promotion. Commencing today, travelers will enjoy a complementary 1,000 Baht King Power Duty Free Shopping voucher for every night they stay at the hotel. The promotion was first valid from June to September 30, 2010 with a minimum 1-day advance purchase (1).• Valid from 15 February to 30 June 2011 is a variant whereby every 5000 Baht spent at duty free gives 1000 Baht cash-back to use at the hotel (2).• The hotel is attached to the city‘s only duty free shopping mall.Source (1): PR Syndacast, June 2010 (2): PR Web, February 2011
  • 61. Air Sahara/Jetlite• Jetlite, in its previous iteration as Air Sahara, started an onboard auction named ‗bid n win.• One form per passenger was handed out and a booklet displaying various products divided into three categories.• One passenger can bid for one product only.• The bidding started from one - fifth of the market price of the product. The auction involves writing your bid down on a from and handing it to the crew. The highest two bidders won the prize.• The product was then collected at the airport upon payment of the submitted price. The practice has carried over to Jeltlite (2).• JetLite is effectively facilitating a value added service for its guests. Source: MouthShut, June 2005 Source (2): JetLite, retrieved June 2011
  • 62. Attracting Brands e.g. Virgin / Courvoisier• Maxxium Travel Retail has announced a new inflight partnership with Virgin Atlantic which will see Courvoisier served to the carrier‘s Upper Class passengers both onboard and in the airline‘s Clubhouse at London Heathrow Airport.• Courvoisier will become the new pouring Cognac onboard and bottles of Courvoisier VSOP will be available for purchase, with a pre-order service for Courvoisier XO and L‘Essence de Courvoisier. Marketing support includes a 3D film about the heritage of Courvoisier on the inflight entertainment system.• At the Virgin Atlantic Clubhouse bar, passengers can enjoy Courvoisier XO and Courvoisier Exclusif, served neat or in cocktails. Bartenders will undertake training on the Courvoisier brand and specifically Courvoisier Exclusif, the marque designed specifically for cocktails. Source: Moodie Report, January 2011
  • 63. Attracting Brands e.g. Virgin / Courvoisier• A dessert paired with Courvoisier has been specially created for passengers dining in the Clubhouse, which will also feature a competition to win a bottle of L‘Essence de Courvoisier.• Virgin Atlantic Director of Sales and Marketing Paul Dickinson said: ‗We are delighted to be working with Courvoisier. We are always looking for ways in which to enhance the passenger experience and are sure that the addition of this premium brand will be popular in our Clubhouse and onboard.‘• Maxxium Travel Retail Managing Director Glen Williams added: ‗Together with Beam Global, we are delighted to offer its customers a unique travelling experience with Courvoisier from the Clubhouse right through to the flight. Travel retail is a key market for Courvoisier and our aim is to become the number one Cognac by 2013. This alliance will play an important role in achieving that goal.‘ Source: Moodie Report, January 2011
  • 64. In-flight Partnership• Emirates has partnered with Montblanc to offer customers the opportunity to win a luxury trip to Hamburg and an exclusive Montblanc Skeleton A380 limited edition writing instrument worth US$19,640.• Customers on board all Emirates flights who purchase the Montblanc StarWalker A380 fineliner from Emirates‘ Duty Free, can register for a raffle draw to win a trip to Hamburg, Germany, where they will receive the Montblanc Skeleton A380 Limited Edition.• "Once again, we are delighted to team up with Emirates for another prestigious onboard campaign,‖ said Karl-Heinz Handke, President Western Hemisphere, Montblanc. ―With its premium services and exclusive customer base, Emirates is the ideal partner for Montblanc to showcase a precious and unique writing instrument.‖ Source: Travel Trade New Zealand, January 2011
  • 65. Brand Marketing Partnerships • Diageo Global Travel & Middle East Managing Director Phil Humphreys believes that the inflight channel can be a key driver of his vision to double travel retail liquor sales in the next five years. • The DFASS-produced Singapore Airlines inflight shopping guide for September–November features a stunning five-page section on Diageo‘s Johnnie Walker portfolio, complete with an exclusively produced two page insert, culminating in an opportunity to win two flights to Singapore for the F1 race, plus event tickets and a lavish accommodation package. ―We paid for the flights, Diageo paid for the passes,‖ FASS Singapore President John Garner says of the collaborative approach. • Singapore Airlines‘ set-up ensures that carts can be tailored to individual routes – Korean and Indian flights, for example – opening up all sorts of possibilities for the star-studded Diageo portfolio. ―I can work with John to specifically target certain profiles,‖ explains, Mr Humphries, noting that such an approach had led to a six-fold growth in inflight sales of Ketel One vodka.Source: Digital PC, retrieved June 2011
  • 66. Brand Marketing Partnerships • So can a ‗strategic partnership‘ really make such a difference in volume terms? ―Totally,‖ Humphreys replies. ―Already since we commenced our strategic partnership we have seen volumes grow significantly, and value enhanced. This gives me even more confidence that this business is built on stone, and early investments will reap their rewards going forward. • ―We have some amazing ideas to drive purchase, working side by side with John Garner and his team,‖ he says. ―I am very excited about this channel – to me it‘s the hidden jewel of travel retail.‖Source: Digital PC, retrieved June 2011
  • 67. Transport Synergies• GuestLogix, Inc. has been awarded the 2011 ―Innovation of the Year: Implementation‖ at the 2011 Global AirRail Awards.• GuestLogix received the award for OnTouch® Ground Connections; a technology and merchandising platform that allows airlines‘ passengers to purchase Heathrow Express tickets through their network in a secure and highly accessible manner.• As the airline industry continues to battle against price commoditization, operators have looked to find new ways to generate revenues while creating a true value-add to their passengers• GuestLogix generates revenues for both parties andgives increased service to travelers, providing the sale of Heathrow Express tickets to airlines‘ passengers prior to arrival at the gate.• GuestLogix‘ platform also provides access to additional sales channels. Source: GuestLogix, May 25th 2011
  • 68. Outsourcing In-flight Duty Free• The worlds second biggest inflight duty free programme at British Airways is to be outsourced to Tourvest Duty Free in the second half of 2011, following an internal review of the business, according to a circulated communiqué to suppliers from BA Retail Manager Nigel Smith.• According to Generation Research, BAs inflight business was worth an estimated $128.4m in 2009 (-13.5% on 2008 in US dollar terms: +2.5% in £), placing it second among the worlds airlines behind Korean Air at $170m, but ahead of Thomson Airways (UK) at $112m and Thomas Cook Airlines Scandinavia at $103.6m.• BAs programme is acknowledged as one of the best in the world and Tourvest is also a good inflight retailer which currently operates Virgin Atlantics inflight concession out of its bonded warehouse at Gatwick. Tourvest also operates the inflight concessions with South African Airways, Kenya Airways, Interair and South African Express.• Tourvest Duty Free has won various awards in the past, including the Frontier Award for Inflight/Marine Retailer of the year in 2009. Source: Trend, January 2011
  • 69. The Sky Isn’t the Limit…• King Power Traveler President Rakhita Jayawardena issued a rousing call to action for the inflight retail industry in his closing keynote address at the 2011 ARC Asia-Pacific in Macau.• ―Can we not sell a Patek Philippe watch? Can we not sell a pair of Jimmy Choo shoes? Imagine a Patek Philippe watch at US$10,000. With a 20% saving on tax from the domestic price, topped off with a discount of 5% for being a Platinum Gold Card member would mean a whopping 25% or US$2,500 off the high street price. Would not a passenger like to make himself available for this opportunity to buy and save? Similarly, why can‘t we sell a pair of Jimmy Choos offering great savings? This type of transaction would contribute enormously to the overall growth in sales per passenger.‖ Source: The Moodie Report, 2011
  • 70. A Useful Start• Results in the 12th annual SITA/Airline Business IT Trends Survey (2010) show that the airlines which carry the bulk of the worlds air traffic, are on course to sell the majority of airline tickets direct to passengers by 2013.• The record 129 airlines who responded to this years survey carry over one billion passengers and are currently selling 40.8% of tickets directly to the public which breaks down as: over the internet, 25.8%; through call centres, 10.7%; and interlining, 4.3%.• These 129 airlines intend to bring their level of direct sales up to 55.1% by 2013. While sales through airline call centres and interlining will remain largely static, direct channel sales through websites are expected to jump to 37.9%.• In order to increase online sales, airlines are prioritizing the implementation of new functionality on their web sites in the following ways: online shopping tools (61% have already implemented this); change/cancel/rebook (52%); and frequent flyer redemption functionality (51%). Source: SITA, June 2010
  • 71. A Useful Start• This is in line with overall airline strategy to migrate passengers to self- service including a multi-channel check-in environment. The airlines stated ambition is to reduce the number of passengers processed via agent check- in from 50.7% to 28.9% by 2013. Passengers use of kiosk check-in is expected to remain static at just below 20% while web check-in options will grow from 21.6% today to 35.5% in 2013. Airline implementation of mobile check-in will advance from 28% today to 80% by 2013.• Although the proportion of passengers using check-in kiosks remains static, the survey confirms the important role of kiosks in a multi-channel environment. 47% of airlines plan to increase the number of kiosks they deploy as they gradually move towards the next step of adoption by adding new functionality for flight transfers and disruption management.• The survey also found that 80% of the largest airlines plan to use kiosks as sales points. Source: SITA, June 2010
  • 72. A Useful Start• The next wave of implementation will be around booking portals for travel agencies which 41% have already done and a further 43% plan to do by 2013; while 44% have already implemented booking portals for corporate customers and a further 38% plan to do so by 2013. By comparison, just 21% of survey respondents have integrated social networking capabilities while 45% have no plans to do so.• In addition, 70% of airlines have a strategy in place to use the passengers mobile phone as a further distribution channel to sell air tickets. Currently, 18% of airlines sell tickets over mobile phones and the ambition is to reach 70% by 2013. Some 85% of the largest airlines responding to the survey plan to offer such services by 2013. Source: SITA, June 2010
  • 73. A Useful Start• The mobile phone will become an essential tool for airline travel by 2013 with 86% of airlines planning to offer flight notifications; 80%, online check- in; 76%, send electronic boarding passes to mobiles; and 68% using the mobile phone to target passengers with travel offers.• Airlines are becoming increasingly adept at upselling, using fare families and marketing types; unbundling fares, by charging for services such as meals and baggage management; and selling non-air services such as hotels, car hire and insurance. Most of this revenue generation takes place direct on line: 63%, upsell; 41% unbundle; and 51% sell non-air services. In 2013, 91% of survey respondents will have implemented at least one of these ancillary revenue strategies via their own direct web channels. Source: SITA, June 2010
  • 74. What Lies Ahead…• Passengers in the future can expect much-maligned airline fees to be replaced by a wide variety of in-flight retail choices and in what is perhaps a surprise, travelers will have more choices to book low-cost airlines.• Those were among predictions of three air travel experts asked by TravelMole to peer• ―We expect to see much more revenue-generating activity through in-flight retail (enabled by in-cabin Wi-Fi and controlled web portals),‖ said Brett Proud of GuestLogix. He envisions en evolution away from fees towards more innovative airline marketing such as catalogue sales. Airlines are moving towards ―virtual onboard stores‖ with products and services that might include an Orlando family able to buy theme park tickets on a plane or business travelers enroute to London‘s Heathrow able to buy a rail ticket while in the air. Source: Travel Mole, December 2010
  • 75. What Lies Ahead…• The future of the airline industry is not more fees because travelers will not spend hundreds of dollars for new ones but instead passengers can expect new retail moves, says Raphael Bejar of Airsavings.―Airlines are looking for value-add services that will not only increase their profits but which improve the customer in-flight experience,‖ he said. He predicts airlines acting as retailers is an evolving trend that will ―become a normal part of the customer in-flight experience.‖• As for the prediction that the end is near for low-cost airlines, Roger Williams of Airline Information says that is not the case.―In fact, I would say this is only the beginning of low cost airlines,‖ he said. He makes the point that a distinction has to be made between a low cost airline that keeps operating costs low and budget airlines that offer low fares ―thanks to a low cost structure.‖That‘s the case in part because traditional old-time airlines with higher cost levels ―have learnt valuable accounting lessons from low- cost airlines.‖ Source: Travel Mole, December 2010
  • 76. What Lies Ahead…• Passengers might expect airlines to continue to find new avenues for fees, but their ―future lies in redefining (and in some cases, reimagining) the customers experience, with an emphasis on promoting sales and value, not extracting fees,‖ said Proud.• The expected move towards selling various products should be successful for the airlines because they already have such metrics as destination and demographic information that ―traditional retailers would kill for,‖ Proud said. ―As with any product and service offerings, customers‘ adoption is important, but with the detailed information and captive audience an airline already has, high adoption and purchase rates are very likely, "he said.• A good news item for passengers in the future is that they will increasingly have choices of products they wish to buy or can reject and not have to pay more. If a passenger is not hungry, he or she skip food offerings, for example. Source: Travel Mole, December 2010
  • 77. Travel Sales Trends Source: Generation Research, SwedenSource: Airline Retail Conference 2010
  • 78. Travel Sales Trends Source: Generation Research, SwedenSource: Airline Retail Conference 2010
  • 79. Travel Sales Trends Source: Generation Research, SwedenSource: Airline Retail Conference 2010
  • 80. Fast Future – Travel and Meetings Industry Services• Briefings and workshops for executive management and boards of hotels, venues, CVB‘s and associations• Customised research on trends, technologies and new markets• Development of strategies and business plans• ‗Deep dives‘ on key trends and technology developments• Consultancy and workshop facilitation on innovation and new business models 80
  • 81. Fast Future• Research, consulting, speaking, leadership• 5-20 year horizon - focus on ideas, developments, people, trends and forces shaping the future• Clients – Industry Associations – ICCA, ASAE, PCMA, MPI – Corporates - GE, Nokia, Pepsi, IBM, Intel, Samsung, GSK, SAP, Orange, O2, E&Y, KPMG, Amadeus, Sabre, Travelport, Travelex, ING, Santander, Barclays, Citibank, DeutscheBank – Governments - Dubai, Finland, Nigeria, Singapore, UK, US – Convention Bureaus – Seoul, Sydney, London, San Francisco, Toronto, Abu Dhabi, Durban, Athens, Slovenia, Copenhagen – Convention Centres – Melbourne, Adelaide, Qatar, QEIICC – Hotels - Accor Group, Preferred, – Intercontinental – Congrex, Kenes – Aeroports de Paris / Schiphol Group
  • 82. Convention 2020• Global strategic foresight study to help the meetings industry prepare for the decade ahead - Industry-wide sponsors• Multiple outputs Nov 2009 – December 2011• Current studies on future strategies for venues and destinations
  • 83. Future Convention Cities Initiative• Cities that want to be at the leading edge of delivering business events• Focus on maximising long term economic benefit of events• Research, sharing of expertise and best practices• Meet four time a year• Initiated and co-ordinated by Fast Future
  • 84. Rohit Talwar• Global futurist and founder of Fast Future Research.• Award winning speaker on future insights and strategic innovation – addressing leadership audiences in 40 countries on 5 continents• Author of Designing Your Future – Published 08/2008• Profiled by UK‘s Independent Newspaper as one of the Top 10 Global Future Thinkers• Led futures research, scenario planning and strategic consultancy projects for clients in telecommunications, technology, pharmaceuticals, banking, travel and tourism, environment, food and government sectors• Clients include 3M, BBC, BT, BAe, Bayer, Chloride, DTC De Beers, DHL, EADS, Electrolux, E&Y, GE, Hoover, Hyundai, IBM, ING, Intel, KPMG, M&S, Nakheel, Nokia, Nomura, Novartis, OECD, Orange, Panasonic, Pfizer, PwC, Samsung, Shell, Siemens, Symbian, Yell , numerous international associations and governments agencies in the US, UK, Finland, Dubai, Nigeria, Saudi Arabia and Singapore.• To receive Fast Future‘s newsletters please email
  • 85. Designing Your Future Key Trends, Challenges and Choices Facing Association and Nonprofit Leaders• 50 key trends• 100 emerging trends• 10 major patterns of change• Key challenges and choices for leaders• Strategic decision making framework• Scenarios for 2012• Key futures tools and techniques• Published August 2008• Price £49.95 / €54.95/ $69.95• Email invoice request to
  • 86. Our Services Bespoke research; Identification & Analysis of Future Trends, Drivers & Shocks Public Speaking, In- Company Briefings, Accelerated Scenario Seminars and Planning, Timelining & Workshops Future MappingPersonal Futuring forLeaders and Leadership Expert Consultations &Teams Futures Think Tanks Identification of Design & Facilitation of Opportunities for Innovation, Incubation Innovation and Strategic & Venturing Programmes Strategy Creation & Investment Development of Implementation Roadmaps
  • 87. Example Projects• Public and private client research e.g. : – Convention 2020 – the Future of Business Events – Future Convention Cities Initiative – Maximising Long-term Economic Impact of Events – One Step Beyond – Future trends and challenges for the events industry – Hotels 2020: Beyond Segmentation – Future Hotel Strategies – The Future of Travel and Tourism in the Middle East – a Vision to 2020 – Future of Travel and Tourism Investment in Saudi Arabia – Aviation and Airports e.g. Aviation 2030 – Scenario Projects – Migration 2030, Future of Narcotics, Chemical Sector, Family 2030 – Scenarios for the global economy for 2030 and the implications for migration – Designing Your Future (Published August 2008) – book written for the American Society of Association Executives & The Center for Association Leadership – Global Economies – e.g. The Future of China – the Path to 2020 – The Shape of Jobs to Come – Emerging Science and Technology Sectors and Careers – Winning in India and China• Strategic advice to industry players• Confidential advisory and coaching services to CEOs and top teams• Public speaking at public conferences and in-company events• Future thinking workshops and retreats
  • 88. Example Clients
  • 89. Image Sources p 1Page1. United Nations Standard Chartered, reprinted in Business Insider, January 2011 Source: RR Finance, November 2010 . Left to right , iPhone.jpg15. Top to bottom , demand-3d-printing-cut-waste-increase-efficiency.php18. Outside to inside, , uRw36rGI/AAAAAAAABjU/R1fbbAOnWVM/s1600/photo4.JPG22. Left to right - ,
  • 90. Image Sources p 230.,260/4d9b0ccb2ed843899e7d650b767f1341-koreanair-dutyfree.jpg34.