Commercial flight passengers are a captive audience that airlines can tap into to generate extra revenue. Vacation marketing expert Kaloyan Valentinov Danchev explains how to do it.
In just over a century, the commercial aviation industry evolved from the first simple wooden-seat aircraft to a thriving industry with many airlines that, according to the International Civil Aviation Organization, facilitate up to 100,000 commercial flights worldwide. every day. Yet perhaps due to financial and stakeholder pressures, the golden age of aviation - with its spacious seats and flight attendants serving food on silver trays - is long gone. This is explained by Kaloyan Valentinov Danchev, CEO of Fidelis Marketing Group, a company specialized in vacation marketing.
“To increase profits, more seats are packed on airplanes. I´ve also noticed that the cushions seem thinner and less comfortable, and on many airlines, the seats just don´t recline. Food, once considered a point of sale, is simpler (if at all served) with less focus on quality or taste, and we are seeing the introduction of new services, for example, the premium economy class, as a strategy to generate income. Nor should the large number of extra charges be ignored, such as additional charges for sitting in an exit row, for checked baggage and for seat selection, which are becoming the norm, ”says the specialist.
As a frequent flyer and professional on the subject, Kaloyan Valentinov Danchev questions the way airlines are trying to increase their profits today.
Monetize passengers: a new proposal
In the expert´s view, airlines are largely ignoring a key trend currently dominating the social and business landscape: monetization.
“People do it every day: they monetize their homes through Airbnb, their social media through sponsored posts, and their data through investment platforms like Datavest. Businesses are doing it too - I´ve seen them sell empty walls as ad space, rent office cubicles as shared desks, and partner with third-party companies to increase sales. The airlines could also join this trend, although it is not the passenger data that they could monetize, but the passengers themselves, ”he reflects.
An airplane used for international travel can carry 350 passengers, while a domestic flight can carry between 150 and 180. If we multiply the lowest average number of people, which is 150, by the number of daily flights (100 thousand, according to the previous figures ) in total we have 15 million passengers flying per day. “These travelers are often sitting idly, especially on domestic flights. Some are reading, chatting, or just sitting, staring into space. In short, they are a captive audience. This offers an excellent opportunity for select monetization ”, analyzes the entrepreneur.
For Kaloyan Valentinov Danchev, the equation is quite simple: Airlines can monetize this captive audience by partnering with companies to sell products on board during flights. Any type of product or service, from insurance to spa treatments.
“These services can be offered to register future clients, to pick them up at the airport or to be delivered to the passengers residence once they return from the trip. Flight attendants, whose duties revolve primarily around safety training and customer service, could be specifically trained to sell partners products. Or, better yet, partner companies could train their own flight attendants in basic safety and service, and airlines could choose to outsource to these companies to save on labor costs - or train their own, ”he says.
This could allow airlines to add additional revenue streams, while partner brands would tap into the airlines captive audience to make sales. Although, in theory, this seems like a simple exercise to generate money, the question posed by the expert is what advantages does this have for the passenger?
Why the passengers won´t refuse
Nobody likes to be stuck in a narrow seat for hours. And that experience could be significantly less enjoyable if a salesperson recites a sales pitch during an already uncomfortable flight, however inexpensive it may be. What exactly could persuade a passenger to participate in this air sales floor? An obvious option would be the reduction of airfares, which is something that already happens - albeit on a smaller scale - with the Dublin-based airline, RyanAir, according to Valentinov Danchev.
“RyanAir offers some of the cheapest flights in Europe. The company learned how to do this through the Southwest model, which takes advantage of connections to smaller airports. But that´s not all they do to cut airfares and increase profits; they also take advantage of their passengers to make sales through something they affectionately call Runway Retail, an on-board catalog ”, explains the expert.
Through this controversial scheme, RyanAir makes flight attendants sell products to passengers. This allows them to reduce the average price of their tickets to less than € 50.00, and include in their offer some others of up to € 5.00. The strategy is also of great help for flight attendants, as they receive bonuses for the products they sell during the flight, explains Valentinov Danchev himself.
As for whether passenger monetization would be successful if widely adopted, RyanAir is a prime example of that. "From the threat of closing down to becoming an airline known for its risky strategies, it is clear that something can be gained by turning the fuselage into a sales floor," asserts the businessman.
A return to luxury?
Beyond valid doubt about what will happen to passengers who firmly do not want anything to be sold to them during their flights, Kaloyan Valentinov Danchev reflects on what will happen in practical terms, should this monetization strategy be widely adopted:
“The ideal would be to see an improvement in standards for scheduled flights. Why? It is undeniable that some passengers would value the option of choosing between a cheaper flight in which they are sold things or a flight in which they can pay more - perhaps the equivalent of a standard ticket today - to travel in peace. In addition, airlines may want passengers to buy these tickets and ideally they would strengthen their offer to compete in terms of quality and extra luxury, ”he says.
According to what was stated by the specialist, the implementation of this strategy could yield tangible results for the user, such as: less tight economy class flights, with more space between the seats and a greater range to recline them. Airlines could invest more in the quality of food and entertainment, and having fewer seats will result in fewer passengers on board, so flight attendants could provide better service.
"In summary: we could see a return to luxury and the advantages of the golden age of aviation, although without the option of smoking on board," says the specialist.
"Is this just a desirable thought? Not necessarily. If more companies partner with airlines in the spirit of monetization, and customers see the benefits of reduced airfares and higher quality, passenger monetization and airline sales opportunities could be the future of the airline industry. aviation ”, concludes.