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Third party ancillary revenues in the airline sector: An exploratory study

Shaw, Mark, Tiernan, Siobhan, O'Connell, John F., Warnock-Smith, David orcid logoORCID: 0000-0002-1887-3278 and Efthymiou, Marina orcid logoORCID: 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

Abstract
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
Subjects:UNSPECIFIED
DCU Faculties and Centres:DCU Faculties and Schools > DCU Business School
Publisher:Elsevier
Official URL:https://dx.doi.org/10.1016/j.jairtraman.2020.10193...
Copyright Information:© 2020 Elsevier
Use License:This item is licensed under a Creative Commons Attribution-NonCommercial-Share Alike 3.0 License. View License
ID Code:25616
Deposited On:16 Mar 2021 14:25 by Marina Efthymiou . Last Modified 16 Mar 2021 14:25
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