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The Untapped
Goldmine:
Transforming Passenger Data into
Personalised Airline Commerce
Sizing & Seizing the
Opportunity
• 3.8 billion flyers annually1
• $57 billion annual ancillary2
revenue
• $15–$17 per customer
So how do we double, triple, or
quadruple that?
The Idea: Hearts, Minds, Wallets
• Behavioral economics
married to digital commerce
• Change consumer mindsets
• Upend airline operating
models
• Drive net new revenue growth
and profitability
The race you want to be
in: $15+++
What’s Currently
Happening in Airline Tech
What was once physical is now
digital…
What’s Currently
Happening in Airline Tech
…and now material goods are being
shaped by the digital world.
Losses vs. Gains for Airlines & Travelers
Competitive
ticket offers
Convenient
ticketing
Inflight
entertainment
Line ups
Baggage fees
Meal offers
Baggage wait
Retail offers
Empathy Pays
How steep is this hill?
With a heavy backpack
With others who care
Loss Aversion
Pitch #1
Switch because current option
is less convenient, less secure.
Pitch #2
Switch because new option is
more convenient, more secure.
Consider this change experiment:
Loss Aversion
Pitch #1
Switch because current option
is less convenient, less secure.
Pitch #2
Switch because new option is
more convenient, more secure.
Consider this change experiment:
2x
Deliberated vs. Impulse Decisions
Savings Income Windfall Pocket
Money
Distractions
Middle Options
Locus of Control
• Overcoming learned helplessness
• Tracking restores a degree of
control
Nudging
• Less shoving, more nudging
To Get More Ancillary Revenue
Line ups
Bags
Food
Meal
preferences
Drink
preferences
Personalization
Duty free
PlanningSeat swaps
Bag order
Entertainment
preferences
Retail therapy
For PassengersRemind me of
my choices
Break Down the Journey & Rebuild It
Making Air Travel
Wonderful Again
What new habits & expectations
could we build?
Read: The Empowered Passenger
THANKS!
Sources
1. IATA
http://www.telegraph.co.uk/travel/travel
-truths/how-many-planes-are-there-in-
the-world/, August 2017
2. http://www.ideaworkscompany.com/wp
-content/uploads/2018/02/Press-
Release-125-More-Global-
Estimate.pdf, February 2018

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The Untapped Goldmine: Transforming Passenger Data into Personalised Airline Commerce

Editor's Notes

  1. - inflight broadband will increase ancillaries by $30B by 2035: https://www.inmarsat.com/news/34067/
  2. Book online Download tickets Track flight changes optimized, new offers = revenue recovery and parity with the past small net changes in consumption habits little to no change in passenger satisfaction how to change the behaviors (passenger data)
  3. Book online Download tickets Track flight changes optimized, new offers = revenue recovery and parity with the past small net changes in consumption habits little to no change in passenger satisfaction how to change the behaviors (passenger data)
  4. Are you better off now then you were before? “people do not think of small outcomes in terms of changes in overall wealth, but rather in terms of losses or gains.” Daniel Khaneman and Amos Tversky
  5. A highly regulated industry with a compliance and reliability focus doesn’t always transfer well to thinking about the passenger experience “the attractiveness of a possible gain is not nearly sufficient to compensate for the aversiveness of a possible loss.” Are there lessons for the airline industry? Putting this lens on ancillary revenue opportunities and the customer journey, consider the “risks” involved in unpredictable lineups, baggage waiting, and meal options (that often run out). Digital offers made available throughout the journey can be framed as much by reducing the possible losses of time and security as by enticements.
  6. Different mental accounts for money from different sources: We spend windfall & pocket money easily; Income is less easy to relinquish, and savings the most difficult of all. For most flight bookings are highly deliberated purchases through hard-earned savings. Wrong time to ask them to part with more hard earned money! Incenting passengers closer to their flight time to spend a bit of pocket money to treat themselves to a quality meal may have more uptake – the impulse purchase
  7. Thales seatback IFE
  8. Choice architecture  There is a reason coffee shops offer their core product in three sizes - not two and not four. In experiments when the actual volume is adjusted by 2 ounces either up or down, 70% of consumers will choose the middle option and claim the size was “just right” for them. Why not try with baggage tagging? Option 1 for customers who are business class, high loyalty, or willing to pay a high fee. Option 3 could be the no additional pay option. Right in the middle could be the very tempting Option 2: a moderate fee to see your luggage come out before those opting for the no-fee option.
  9.  Many instances where passengers feel no sense of control over their experience and airlines are hamstrung to change those circumstances, leaving all parties frustrated. Digital applications that give customers a feeling of control can mitigate some of these issues. Consider an app that allows tracking of various aspects of journey – bonus: extra marketing opportunities through the app
  10.  The win-win is more consumers using an airline’s app, with a broader, more enticing set of offers available. If passengers were nudged at various touch points to download the app with the promise of an immediate and highly relevant “reward” (not necessarily financial), more uptake should be expected.
  11.       -Behind every negative (line ups, waiting, crappy meals, limited retail, limited entertainment) lies a positive revenue opportunity in the waiting Not one single thing but a set of tailored offerings, culminating in great passenger experiences