Development of intelligence-based ancillary revenues and products

Abstract

Recent research has demonstrated that, despite the rising focus on ancillary revenues by airlines worldwide, only a few core secondary products and services have proven to be lucrative. This study investigates the benefits to airlines of using the pareto principle as a way to dedicate time and resources to the specific ancillary products that currently and potentially generate the most revenue. Combining the results of a 2015 survey of industry experts, with an application of the Pareto Priority Index (PPI), the merits of an intelligence based development of ancillary products is determined. It is found that, once the cost of investing and developing competencies in ancillary revenues are taken into account, it is often better to focus on the few core products and services that are most lucrative, although these ‘core’ products and services can vary by flight length (short/long-haul) and thus should be identified on a case-by-case basis