Third party ancillary revenues in the airline sector: an exploratory study.

Shaw, Mark, Tiernan, Siobhan, O'Connell, John F., Warnock-Smith, David and Efthymiou, Marina (2019) Third party ancillary revenues in the airline sector: an exploratory study. In: ATRS 23rd World Conference, Department of Spatial Economics the Netherlands.

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Some airlines, especially the Low Cost Carriers (LCCs), have being earning significant profits from revenues derived from, both a-la-carte and frequent flyer programme related ancillary revenues. To date few have being able to derive a significant quantum of revenue from 3rd party ancillaries, however. The key to increasing these revenues is an understanding of passenger willingness to pay and how to increase both customer awareness and customer conversion. This study assesses the 3rd party ancillary services passengers are more willing to purchase and also what offers might increase this willingness to purchase for specific 3rd party services. A passenger survey, nine expert interviews and a case-study on Ryanair formed the study’s mixed-method approach with the main findings being that car hire, airport parking, and the sale of hotel rooms had the most significant associations with willingness to pay. It was also found that there was a significant association between specific offers and increased willingness to purchase. The 15% discount off a future flight, and to a lesser extent, hotel price guarantees were the most significant. The expert interviewees confirmed that the future sustainability of this revenue stream for airlines is centred on mobile digital devices, customer conversion, and exploiting potential market opportunities.

Item Type: Conference or Workshop Item (Paper)
Keywords: airline revenues, 3rd party ancillary services, commission based ancillary services.
Depositing User: RED Unit Admin
Date Deposited: 22 Jul 2019 12:31
Last Modified: 22 Jul 2019 12:31

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