Sponsored Feature: Plusgrade
THE POWERFUL INTERSECTION OF LOYALTY AND ANCILLARY REVENUE How to make the most of an airline’s customer loyalty to increase its ancillary revenue.
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n average, ancillary revenue is growing twice as fast as an airline’s core revenue. At the same time, an airline’s loyalty program members are known to spend more, fly more, and stay active longer. It is little wonder, therefore, that Ken Harris (pictured, opposite), Plusgrade’s founder and CEO, describes the conjunction of these two sectors as “the most exciting and fun part of the industry.” He continues: “We are working in the bullseye of the Venn diagram where loyalty and ancillary revenue meet. Our aim is to take a holistic view and use loyalty to increase ancillary revenue and ancillary revenue to drive loyalty. We want to maximize value for our partners.”
Creating an experience
The goal, always, is to ensure that in the end, the customer benefits the most. Most ancillary revenue is spent on improving the travel experience, such as faster processing at the airport, lounge use, or a better inflight service. Accordingly, Harris says that airlines must view ancillary revenue in the light of the end-to-end
70 Airlines 2024 – 02
Plusgrade by numbers
200+
60
travel partners
countries
About
25m
$7bn
in new revenue opportunities in 2024
incredible customer experiences in 2023
journey and gaining loyalty rather than as a purely money-spinning exercise. “Ancillary revenue must have a positive impact for customers,” he says. Plusgrade products such as Seat Blocker and SpeedPass—a bundled product that aims to help passengers move through the airport with ease—are designed to respond to passenger needs. Other products include: • Premium Upgrade • Loyalty Currency Retailing • Hospitality solutions StayExtend and StayPlus “Airlines need to offer their best ancillary opportunities to their best customers or
make a customer loyal through great ancillary services,” says Harris.
Understanding loyalty
Airlines are beginning to understand the value at their fingertips. But this is a new frontier, and the opportunities are still being defined. Data is the key, and, in airlines, legacy systems have kept this siloed. But the move to modern airline retailing based on IATA’s New Distribution Capability (NDC) and One Order standards is resolving the problem specifically related to ticketing. Ancillaries are more advanced, and airlines are already starting to obtain airlines.iata.org