Category: Travel

https://www.forbes.com/sites/forbesbusinessdevelopmentcouncil/2020/03/13/the-future-of-aviation-and-sales-how-airlines-can-monetize-passengers-and-why-they-should/#1f49ec185802

Forbs

Valentino Danchev
Forbes Councils Member

Frobes Business Development Council

POST WRITTEN BY

Valentino Danchev

Founder, President and CEO of Fidelis Marketing Group,
overseeing the promotion of memberships and tours at luxury resorts in Latin America.

The Future Of Aviation And Sales: How Airlines Can Monetize Passengers, And Why They Should

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In a little over a century, the commercial aviation industry has evolved from the first simple planes with wooden
seats
into a thriving industry with many airlines that the International Civil Aviation Organization claims facilitate up to
100,000
commercial flights worldwide each day. However, perhaps due to economic and stakeholder pressures, the
golden
age of aviation — with its spacious seating and flight attendants serving food on silver platters — is far behind
us.

To increase profits, more seats are crammed
into planes
. I’ve also noticed that cushions seem thinner and less
comfortable, and on many airlines, seats simply don’t recline. Food, which was once seen as a selling point, is
simpler
(if it’s even served) with less focus on quality or flavor, and we’re seeing the introduction of new classes,
such as premium
economy
, as ways to drive revenue. The plethora of extra charges also shouldn’t be ignored, such as
additional fees to be seated in an exit row, checked baggage fees and seat selection charges, which are becoming the
norm.

But what if I told you that, as a frequent traveler and CEO of a vacation marketing company, I thought airlines were
going about increasing their profits in the wrong way?

Monetizing Passengers — A New Proposal

Airlines are largely ignoring one key trend currently dominating the social and business landscape: monetization.
Every day, people do it: They monetize their homes through Airbnb, their social media feeds through sponsored posts
and their data through data-investment platforms like Datavest. Businesses are doing it too; I’ve seen them sell blank
walls as ad space, rent out unused office cubicles as “hot desks” and partner with third-party companies to increase
sales. Airlines could also be doing this, though it’s not passenger data they could monetize; it’s the passengers
themselves.

Think about it: A plane used for international travel might hold 350
passengers, while a domestic flight might carry
around 150–180 passengers. Multiply this 150-person capacity by the number of daily flights (100,000, according to the
figures above), and you have 15 million passengers flying per day. These travelers are usually sitting idly —
particularly on domestic flights. Some are reading; some are chatting, and some sitting and staring into space. In
short, they’re a captive audience. This offers a prime opportunity for select monetization.

How? It’s fairly simple. Airlines can monetize this captive audience by partnering with companies to sell products
onboard during flights. Any type of product or service, from insurance to spa treatments, could be offered for sign-up
or sold for pick-up at the airport or for delivery to the passengers’ residence. Flight attendants, whose roles
revolve largely around safety instruction and customer service, could be trained specifically to sell partner
products. Or, better yet, partner companies could train their own flight attendants in safety and service basics, and
airlines could choose to outsource from these companies to save on labor costs — or train their own.

This could enable airlines to add additional revenue streams while enabling partner-brands to leverage the airlines’
captive audience to make sales. While this seems like a simple money-making exercise in theory, it also begs the
question: What’s in it for the passenger?

Why Passengers Won’t Balk

No one enjoys being stuffed in a cramped economy seat for hours on end, and that experience could be made
significantly less enjoyable by a salesperson reciting a pitch during an already uncomfortable flight. What exactly
could persuade a passenger to participate in this midair sales floor? An obvious consideration would be a reduction in
airfares, which is something we can already see in action — albeit on a smaller scale — with Dublin-based airline
RyanAir.

RyanAir offers some of the cheapest flights throughout Europe. It reportedly learned to do so in part from
Southwest’s model of leveraging connections with smaller airports. But that’s not all they’re doing to reduce airfares
and increase profits; they’re also leveraging their passengers to make sales in what they’ve affectionately dubbed
Runway Retail, an in-flight catalog.

Through this controversial
scheme
, RyanAir has attendants sell products to passengers throughout flights. It’s likely
because of this that RyanAir has managed to reduce their average ticket price to under €50.00,
with some as low as €5.
Arrangements like these could also be a boon for flight attendants if they receive bonuses based on products they sell
throughout the flight.

As to whether the monetization of passengers would be successful if it were widely adopted, RyanAir is a shining
example. From the threat of closing
down
to becoming a well-known airline, it’s clear there is something to be gained
in turning the fuselage into a sales floor.

A Return To Luxury?

But what about the passengers who firmly don’t want people selling to them during their flights? If this monetization
strategy is widely adopted, we would ideally see an increase in standards for regular flights. Why? It’s undeniable
that some passengers would want a choice between a cheaper flight where they’re being sold to or a flight where they
can pay extra — perhaps the equivalent of a standard airfare today — to be left in peace. Furthermore, airlines
might want passengers to buy these tickets and would ideally beef up their offering to compete in terms of quality and
luxurious extras.

What would this look like? Ideally, an economy class would be less cramped, with more space between seats and a
greater range for reclining seats. Airlines could invest more in food quality and entertainment, and because having
fewer seats would result in fewer passengers on board, flight attendants could provide better service. In short: we
could see a return to the luxury and perks of the golden age of aviation, minus the onboard smoking.

Is this a little too much “blue-sky thinking”? Not necessarily. If more businesses become intertwined with airlines
in the spirit of monetization, and customers see the benefits of reduced airfares and increased quality, monetizing
passengers and in-air sales opportunities could very well be the future of the aviation industry.

Forbes Business Development Council is
an invitation-only community for sales and biz dev executives. Do I qualify?

valentino
Valentino Danchev

Founder, President and CEO of Fidelis Marketing Group,
overseeing the promotion of memberships and tours at luxury resorts in Latin America.

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