Austrian Air is offering an interesting way for its fliers to purchase business class upgrades via auction. By naming their price, Austrian’s customers are bidding on the chance to enjoy business class amenities for economy class prices. The catch is that fliers must submit their
bids when booking their flights – then 72 hours before takeoff, Austrian will accept or deny their offers. This is an innovative strategy, but the timing of the airline's upgrade offer doesn’t coincide with the natural buying behavior of fliers. In our business traveler survey, we found that airlines are missing a major opportunity to earn more ancillary revenue by pushing upgrade offers to fliers at the right time – on the day they fly, and in the right place – via their mobile phones.
Top day-of-travel ancillary purchases
The top ancillary fees business travelers we surveyed would pay for on the day-of-travel include:
Business traveler purchasing behavior
Business travelers are opportunistic purchasers – think about it, are you more likely to lay out even more cash when you’re booking tickets from the comfort of your home or office, or is the opportunity to buy access to business class lounges and fast-lane service more appealing during unforeseen delays when you’re stuck at the airport?
When fliers are more likely to pay ancillary fees
By pushing business-class upgrade opportunities to economy travelers a few hours before their flight, Austrian avoids the disappointment and possible resentment fliers will feel if their bids aren’t accepted. Although Austrian’s business-class amenities aren’t offered a-la-carte, the full-flat bed or guaranteed empty adjacent seat, priority boarding and fast-lane service hit right in the sweet spot of upgrades fliers are willing to pay the ancillary fee on their way to the airport or as they wait at the gate.
What’s your take – would you rather gamble in advance on the possibility of an upgrade at a price you think is fair, or buy a guaranteed one in real-time for a price the airline sets?
Airlines vary as to which amenities they include in the price of their plane tickets and which ones they sell separately – with the primary goal of optimizing revenue, and for some, wanting to position themselves as a premium vs. low cost carrier. But it is an interesting optimization problem to determine which amenities to include in the price of the ticket and which to offer as an add-on for an extra cost.
What amenties will travelers pay extra for?
In just a short time, “Big Data” went from a marketing buzzword to headline news (and not always for the better, if you’ve been paying attention to the media lately!) It can definitely seem invasive or disturbing for consumers to know that a someone’s collecting information on you, but travel and hospitality companies are doing so in hopes of creating a better travel experience.
Why travel companies collect customer data
O Mon dieu! Just as summer season kicks in to high gear (and timed to protest a speech by the EU’s transportation commissioner promoting cost-saving efficiencies in the European air traffic control system) the French air traffic controllers have announced three days of strikes beginning Tuesday. France’s civil aviation authority has asked airlines serving airports in Paris, Lyon, Nice, Marseilles, Toulouse and Bordeaux to halve their flight schedules through late Thursday.
If you are planning on traveling to, from or through France this week, you’ll want to check to see if your scheduled flight is among those cancelled.
If you’re like me, you avoid purchasing ancillary services like the plague when you book your airline ticket. After feeling as though I’ve finally succeeded at finding the lowest fare to my destination, at least for the moment, I have no interest in spending more money on in-flight Wi-Fi, extra bags, early boarding privileges, or a lounge day pass (I’m 5’ 1” so extra legroom is a bit unnecessary for me). In fact, with so many extra fees associated with booking airline tickets today, I feel great about getting away with 1 fee plus tax!
But how about the day I fly? I may have gotten up at 4am to make an outbound flight and now it is 7pm and I’m arriving at the airport to catch a 9:30pm flight home. I’m exhausted and that airline lounge sounds mighty appealing for the next 2 hours. Or I may have arrived at the gate only to find out the plane is completely full; meanwhile I know I need to bring my bag on the flight so I can quickly deplane and grab a cab to a business meeting. Paying for early boarding privileges is ideal.