Airline merchandising on the increase

Once upon a time, the only airline merchandising was via the airline magazines and the SkyMall catalogs. But today the airlines with their unbundling are beginning more and more merchandising.

Airports learned the power of merchandising long ago. Duty-free stores have long been a big money-maker for airports. Plus, airports have gotten better at developing shopping malls and dining options for passengers who now spend more time than ever at airports.

In Europe airports have set up health clubs, swimming pools, 24-hour supermarkets and theaters that allow both locals and through-passengers plenty of additional activities besides cooling their heels in uncomfortable seats. In fact, one of Zurich’s most successful supermarkets is at the airport. It is one of the few in the country open on Sundays.

Now airlines are realizing how much money there is in ancillary sales. This has long been a major component of Ryanair’s business model. U.S. airlines are now selling aboard aircraft pillows, blankets, sandwiches, salads, gourmet snacks, liquor, preferred seating, wireless connections, and entertainment.

While connecting in Dallas last weekend, I heard repeated announcements offering tickets on the Heathrow Express for connections between Heathrow airport and downtown London. The gate agent offered those awaiting the London flight advance-purchase tickets that were “three times as fast and three times less expensive than taking a taxi from the airport to downtown.”

It won’t be long before the airlines start selling other train passes, set up dinner reservations, sell museum cards, health insurance, van service to hotels, local transportation cards and maybe visa fees on-board airplanes so passengers are ready to go as soon as they land.

It also helps that the airlines will be generating plenty of commissions that will go directly to their bottom line.

Now that the airlines with their highly-targeted and captured audience are equipped with electronic credit card readers and web access, the sky’s the limit.

Photo: iPhone credit card reader.

Tagged as: airlines, ancillary revenues