ANCILLARY SERVICES DISTRIBUTED ON AIRLINE APPS 4Q19
Low-Cost Carriers vs. Full Service Carriers

Ancillaries are the fastest-growing revenue stream for airlines. There’s no end to what they can up-sell or cross-sell after seats. Moreover, IATA’s New Distribution Capabilities (NDC) is ushering in an era of how airlines will sell them. videc’s App in the Sky examines Android apps of 33 low-cost carriers (LCCs) and 77 full-service carriers (FSCs) globally to see how many offered the below unbundled products in 4Q19.

PRIORITY CHECK-IN

It is evident straight-away that LCCs are adding features on their apps faster than the FSCs are. At 79%, LCCs lead the way in terms of offering priority check-in in 4Q19. Meanwhile, 65% of the FSCs have incorporated priority check-in in their apps. Either way, both types of airlines are rolling out the red carpet to deliver this option at a fee. Offering this via their app allows users who are not part of their high-value frequent flier program to buy this.

Low-Cost Carriers

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Full Service Carriers

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Base: 77 Full Service Carriers & 33 Low-Cost Carriers | View Methodology

PREPAID SEAT SELECTION

There is a wide gap between the number of LCCs and FSCs that offer paid seat selection in their Android apps. While 81% of LCC apps in 4Q19 offered paid seat selection, the percentage for FSCs was at 62%. This compared to 68% for LCCs and 65% for FSCs in 3Q19.

Low-Cost Carriers

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Full Service Carriers

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Base: 77 Full Service Carriers & 33 Low-Cost Carriers | View Methodology

ADVANCED MEALS PURCHASE

There is disparity between the number of LCCs that offer the option of meals purchase on their Android app as against the number of FSCs that do. While 42% of LCCs offered this feature in 4Q19, this stood at 35% for FSCs. But again, this could be because FSCs typically include meals in their bundled fare rather than upselling. In case of LCCs, meals purchase also happens either post-booking or directly on the flight. Both types of airlines have done rather little to upsell meals via this channel.

Low-Cost Carriers

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Full Service Carriers

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Base: 77 Full Service Carriers & 33 Low-Cost Carriers | View Methodology

ADVANCED BAGGAGE PURCHASE

The option to pre-purchase additional baggage ranks third in the overall scheme of ancillary products that airlines sell via their mobile apps. The 4Q19 analysis shows that more LCCs are taking this feature seriously with 48% of them incorporating it into their apps as against 30% for the FSCs. Also, some FSCs already offer higher baggage allowance. Either way, if airlines want users to utilize this app option more frequently, they will need to cross-sell the advantages of pre-buying this – on the app itself.

Low-Cost Carriers

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Full Service Carriers

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Base: 77 Full Service Carriers & 33 Low-Cost Carriers | View Methodology

ADVANCED INSURANCE PURCHASE

Even though flight disruption poses a significant threat to airline operations and expense line – particularly in Europe, which has stringent Air Passenger Rights – not many airlines offer this. Overall, airlines have some more ways to go in integrating travel insurance in their mobile shopping path. The analysis revealed that 27% of LCC apps offered insurance purchase in 4Q19 while the figure for FSCs rested at 22%.

Low-Cost Carriers

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Full Service Carriers

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Base: 77 Full Service Carriers & 33 Low-Cost Carriers | View Methodology

PRIORITY BAGGAGE

Of the total number of airlines analyzed in 4Q19, 15% of LCC apps feature priority baggage purchase, as compared to 8% for the FSCs.

Low-Cost Carriers

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Full Service Carriers

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Base: 77 Full Service Carriers & 33 Low-Cost Carriers | View Methodology

WI-FI PURCHASE

Wi-Fi passes haven’t reached mainstream due to a combination of factors. Chief among them are massive capital expenditure on part the airline, and varying telecom regulations by country in case of overseas flights. Just 9% of the LCCs offered Wi-Fi purchase in 4Q19 as against 8% of FSCs. This compared to 8% for LCCs and 6% for FSCs in 3Q19. The quarter-on-quarter reduction indicates the broader challenge in rolling out Wi-Fi on board.

Low-Cost Carriers

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Full Service Carriers

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Base: 77 Full Service Carriers & 33 Low-Cost Carriers | View Methodology

DUTY FREE/ RETAIL SHOPPING

Airlines are either retailing onboard or tying up with partners on the ground, especially at airports. But a few are taking e-retail a step further and are incorporating shopping within their apps. While 8% of the LCC apps analyzed in 4Q19 offered duty-free shopping option to their users, the share was lower at 6% for the FSCs. The incidence of duty-free shopping in airline apps has decreased quarter-over-quarter, where it stood at 15% for LCCs and 14% for FSCs in 3Q19. The retail opportunity is vast and those doing it right stand a chance to gain further insight into their travelers’ lifestyle.

Low-Cost Carriers

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Full Service Carriers

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Base: 77 Full Service Carriers & 33 Low-Cost Carriers | View Methodology


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