Third party ancillary revenues in the airline sector: An exploratory study
Shaw, Mark, Tiernan, Siobhan, O'Connell, John F., Warnock-Smith, DavidORCID: 0000-0002-1887-3278 and Efthymiou, MarinaORCID: 0000-0001-8611-5973
(2021)
Third party ancillary revenues in the airline sector: An exploratory study.
Journal of Air Transport Management, 90
.
pp. 1-12.
ISSN 0969-6997
Some airlines, especially Low Cost Carriers (LCCs), have earned significant profits from revenues derived from
ancillary revenues. However, to date few have been able to derive a meaningful portion of revenues from 3rd
party ancillaries. The key to increasing these revenues comes from an understanding of passenger willingness to
pay for 3rd party products/services, coupled with increasing customer awareness and consequently the allimportant customer conversion. This study assesses the 3rd party ancillary services that passengers are more
willing to purchase, along with the potential offers that might increase their willingness to purchase specific 3rd
party services. A mixed methods approach was used consisting of a passenger survey and nine expert interviews.
The main findings are that car hire, airport parking, and the sale of hotel rooms had the most significant associations with customer 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. 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.
Metadata
Item Type:
Article (Published)
Refereed:
Yes
Additional Information:
Article Number 101936
Uncontrolled Keywords:
Air transport; Airline revenues; 3rd party ancillary services; Commission based ancillary services