Ancillary services and the travel agent

Ancillary services and the travel agent

12 Pages · 2013 · 2.16 MB · English

1 Foreword This paper, aimed at traditional travel agencies, highlights the business benefits that come from the seamless booking of additional flight-related

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Ancillary services and the travel agent: The opportunities ahead 2 Contents Foreword 1 The emergence of ancillary services – industry and economic context 2 What exactly are we talking about? 3 What airlines and travellers are currently thinking 4 Why ancillary services should be of interest to the travel agency 5 So what can travel agencies do now? 6 In summary… 8 1 Foreword This paper, aimed at traditional travel agencies, highlights the business benefits that come from the seamless booking of additional flight-related services (also called ‘ancillary services’). Many airlines have adapted their business model to factor in ancillary services, and travellers’ expectations have changed as a result. Agents need to be specialist retailers, with detailed knowledge of the market and an insight into individual travellers. They also need access to the widest range of content at a competitive price. The emergence of ancillary services – industry and economic context Since the start of the current global economic slowdown in 2008, airline profitability has been impacted by a number of factors. Traditional premium traffic has seen its share of total passenger numbers fall from 9.5% in 2007 to 8% by the end of 2012. Overall, 4.5% more people will fly in 2013 than in 2012, with economy traffic taking an increasingly high proportion 1. Source: IATA - Premium Traffic Monitor January 2013 Airlines are keeping a tight control on costs at the same time as trying to maximise their revenue per passenger. In the US, average fares on domestic and international flights have started to recover over the past few years, but are still 17% lower - in real terms – than 1990 2. Yields remain under pressure however. IATA says that some airlines are increasing volumes at the expense of yields 3. Ancillary revenues are a key part of many airlines’ business models. In established markets such as North America and Europe, some

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