Secondary News Article Categories: Entertainment & Connectivity

It Takes Two (or More): Ancillary Alliances

With Gategroup’s digital retail solutions easyJet passengers can buy in-flight services from their phones. Image via easyJet

How can airlines recover from the largest business model shift in the history of commercial aviation? When it comes to important ancillary revenue streams, industry leaders agree that digital platforms are key. But no company can deliver the promised land alone. Savvy partnerships, on the other hand, just might. This article originally appeared in the Expo Daily Experience: Preview. Read the full issue and register for FTE APEX Virtual Expo.

With the ongoing need to reduce onboard interactions and a shift in consumer demand for ancillary products due to COVID-19, airlines and service providers have had to reevaluate the in-flight retail experience to meet current and future challenges. That means tapping into the power of digital platforms, industry leaders say.

But thus far, digital has largely been absent from the in-flight retail landscape. Several partnerships, inspired or accelerated by the pandemic, are changing that.

Portable in-flight entertainment (IFE) company AirFi recently entered into a sales partnership with IFE content provider Spafax that will combine the platform’s passenger and behavioral data with Spafax’s expertise in advertising and media. It’s the key that “will finally unlock the huge growth potential in onboard digital revenues,” says AirFi CEO Job Heimerikx. Together, they’ll be able to deliver targeted and more personalized digital opportunities that will result in better and higher-yielding conversions, he adds.

In October, streaming IFE supplier Bluebox Aviation Systems announced an agreement with the catering arm of dnata to integrate its food and beverage services into the Bluebox system.

Providing passengers with a seamless experience and embedding catering logistics into an IFE platform can be quite technically complex, says Duncan Greeney, dnata’s general manager for Retail. “In the present climate our customers need solutions that are simple and quick to deploy. This is an opportunity for airlines to minimize contact and dialogue between passengers and cabin crew but still deliver an excellent service and a full range of food, drinks and retail goods that are such an essential part of the ancillary revenue income.”

Bluebox had been eyeing this type of partnership for some time. “We’d begun discussions on the integration with several onboard retail providers prior to COVID, but the rapid change of circumstances with the restrictions and safety protocols required by COVID accelerated these conversations. Everyone concerned recognized the significance very quickly. The practicalities and the commercial opportunity expedited the partnerships,” says the company’s marketing director, Catherine Brown.

The catering arm of dnata will integrate its food and beverage services into the Bluebox system. Image via Bluebox Aviation Systems.

Direct to Consumer
Ancillary sales are a key component of easyJet’s business model, contributing just over 20 percent of total revenue for fiscal year 2019. A data-driven approach has allowed it to continually improve that share.

In the coming months the airline will take this approach even further by launching a trial of Gategroup’s digital retail solution, ePax, which will allow passengers to order and buy in-flight retail services straight from their personal devices.

It’s a significant shift for easyJet, says a Gategroup executive. “We have access to a huge amount of onboard retail data. Combine that with the behavioral and e-commerce data we’re now able to access via ePax, and the data that easyJet is sitting on and we’re able to generate some really interesting insights to make retail offers smarter and more personalized.”

To obtain those insights, Gategroup partnered with Black Swan Data, whose expertise will enable it to go deep on data at levels the airline industry has historically failed to realize. Beyond the straightforward parameters of flight destination, duration and time of day, ePax can identify specific flights and passenger cohorts to deliver more relevant content – a major step forward from the general adverts and in-seat menu cards that the industry has relied on to sell these revenue opportunities until now.

Partnerships aren’t new to aviation. They existed before COVID-19, but companies that were once slowly and incrementally improving their products internally now recognize that in order to capitalize on the profitable promise of digital, they’re going to have to look outward.

Virtual Expo Connection – Event Agenda

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Dec. 8, 10:30 a.m. GMT

Bluebox and dnata Announce In-Flight Retail Partnership

Image via Bluebox Aviation Systems

Bluebox and dnata’s partnership, announced yesterday, means airlines can generate ancillary revenue by selling meals and other products via Bluebox’s virtual trolley.

In-flight entertainment (IFE) provider Bluebox Aviation Systems and dnata’s catering branch are pooling resources to develop and market joint product and service offerings across Australasia and Asia-Pacific territories. The companies will tailor their products and processes in alignment with customer branding, content and ancillary payments requirements.

“In the present climate our customers need solutions that are simple and quick to deploy.” – Duncan Greeney, dnata

The evolving need for touchless solutions in the COVID-19 era was a key driver of the partnership, which will enable touch-free payments for on-board retail. Additionally, the partnership will facilitate the digitization of materials that support onboard sales, including digital menus and magazines, which generate revenue streams via advertising.

“We’re enabling each other to offer more to our airline customers – which in turn enables them to offer enhanced services to their passengers,” Catherine Brown, head of Marketing at Bluebox told APEX Media.

“With COVID-19 precautions, airlines may not provide a trolley service, and without a solution like ours the whole act of ordering could be more complicated and frustrating for passengers.” – Catherine Brown, Bluebox Aviation Systems

Duncan Greeney, general manager of Retail at dnata, explained how the partnership will create solutions that are easy for airlines to use and portray an illusion of seamlessness to customers. “Integrating complex systems – in this case an IFE platform and catering logistics – can actually be quite complex technically, and in the present climate our customers need solutions that are simple and quick to deploy,” he said.

According to Brown, airlines that use dnata catering but don’t yet have IFE would be able to offer meals and shopping via Bluebox’s virtual trolley, and add on IFE. Conversely, Bluebox’s IFE customers would be able to integrate the dnata catering offering into the user interface, making what was an entertainment platform even more engaging.

“But importantly,” Brown said, “with COVID-19 precautions – reduced interaction with cabin crew in particular – airlines may not provide a trolley service through the cabin, and without a solution like ours the whole act of ordering food and drinks, or buying duty-free, could be more complicated and frustrating for passengers. Being able to do so via their own devices will help normalize their in-flight experience for passengers.

In practice, passengers would connect their smartphones or tablets to Bluebox’s wireless platforms and navigate to an airline-branded homepage. From there they can explore a wide range of IFE and other services.

“We initially expect opportunities for our Bluebox Wow portable wireless IFE system – given the demand for simple, rapid deployment in the current environment. This could be for the battery-powered version, but also for our aircraft-powered version, which provides a low-cost alternative to fitted wireless systems,” Brown explained.