Airlines expected to increase onboard offerings

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Besides charging passengers to check luggage, the nation’s airlines have collected billions of dollars in extra revenue by turning their cabins into flying department stores.

And experts foresee big growth in such sales in the coming years.

The nation’s top airlines take in an average of nearly 12% of their revenue from onboard sales of food, drinks, online entertainment and blankets, among other items and services, according to industry studies.

In the future, airlines are likely to expand such offerings to include “destination-based attractions,” such as car rentals and hotel reservations and more entertainment options, according to a study released last week by Toronto-based GuestLogix, a provider of onboard sales technology to the world’s airlines.


The report predicts that most of the sales will be made from the entertainment system installed in the seat backs instead of from the carts that flight attendants roll down the cabin aisle.

“I think airlines are thinking about the passenger and trying to get them what they want,” said Chris Gardner, a managing director at GuestLogix.

GuestLogix found that revenue from so-called “comfort items” such as headphones, blankets, pillows and in-flight entertainment jumped 70% in the first half of 2010 compared with the same period in 2009.

Prepared meals and other fresh food generated nearly three times as much as revenue as pre-packaged snacks in the first six months of 2010 compared with the same period in 2009.

Finally, the report confirmed what many in the airline industry had long assumed: The longer the flight, the more the airline sells in on-board products and services, particularly alcoholic drinks.

On flights under 500 miles, the average sale of alcoholic drinks was about $22, compared with $71 on flights over 1,500 miles, the report found.

“The longer the flight, passengers are less likely to wait until they are on the ground to buy food or have a drink,” the report said.


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-- Hugo Martin