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Airline industry's first ever analysis of onboard retailing to be released

GuestLogix and Airline Weekly publish first-ever onboard retail benchmark

As the airline business model undergoes a radical change, two industry leaders, Airline Weekly and GuestLogix, Inc. have created the airline industry’s first and only comprehensive metric to detail the effects of those changes on airlines around the world, and measure the performance of onboard retail initiatives – increasingly critical to the success of airline revenues.The Airline Weekly GXI Onboard Retail Benchmark 2009 provides the industry with a much-needed…

As the airline business model undergoes a radical change, two industry leaders, Airline Weekly and GuestLogix, Inc. have created the airline industry’s first and only comprehensive metric to detail the effects of those changes on airlines around the world, and measure the performance of onboard retail initiatives – increasingly critical to the success of airline revenues. 

The Airline Weekly GXI Onboard Retail Benchmark 2009 provides the industry with a much-needed analysis of trends in onboard retailing, one of the most important segments of airline ancillary revenues. The Benchmark analyzes global, regional and service model perspectives on onboard retailing on an industry-wide scale, covering onboard retail operations encompassing nearly 800 million passenger trips annually. 

GuestLogix, the leading provider of onboard store technology to the airline industry and Airline Weekly, the leading news weekly covering the global airline industry business, teamed up to prepare and distribute the first-of-its-kind report, which has taken 15 months to collect, analyze and report on their findings.

For airlines, the report offers an opportunity to measure their ancillary revenue performance against the rest of the industry, and to further develop their onboard retail strategies with an eye toward creating a competitive advantage. With statistics segmented in terms of routes, retail models and product performance, among other breakdowns, the GuestLogix report provides specific information valuable to any airline operating in any market. 

As ancillary revenues have become crucially important to airlines, many carriers are turning toward in-cabin offerings for sustainable ancillary revenue growth. With the advent of in-flight credit card payment capability and the popularity of the ‘cashless’ cabin, airlines now have all the tools necessary to create comprehensive, robust revenue development programs within the passenger cabin. How airlines are developing these streams, and the strategies they are employing to ensure their continued development are the subject of the GXI Benchmark.

"In a business as competitive as the airline industry, even a small edge can be invaluable. And now we have this new, critical data in the industry’s most dynamic space – onboard retail. Airlines with the fastest growing non-ticket revenues are commanding attention, as this could -at last- be a step toward sustainable profit generation. The race is on to find onboard models that work better than that of your competitors. And, in a race like this, knowledge is power,” said Mr. Seth Kaplan, Managing Partner of Airline Weekly.

The report indicates that in the Asia-pacific market, airlines rely overwhelmingly on duty free sales to support their onboard retail programs, as only 10% of passengers in this region are exposed to ‘buy-onboard’ programs. By comparison, 68% of passengers in the Americas and 32% in the Europe/Middle East/Africa region are exposed to food and beverage and passenger comfort offerings in-cabin. The report also looks at monthly trends within industry benchmarks for various product categories and service models onboard.  Food, beverage and passenger comfort items, for instance, yield on average $0.72 per passenger (with top performing airlines yielding nearly $2 per passenger), and duty free programs average a $2.77 per passenger yield. 

“These trends indicate that onboard retail has already become a game-changing strategic play for the airline industry,” said Mr. Tom Douramakos, President and CEO of GuestLogix. “This benchmark will be indispensible, benefiting a wide group of industry stakeholders including the airlines, flight attendants, travelers, content providers and investors.”

The Airline Weekly GXI Onboard Retail Benchmark provides detailed information about onboard retailing unavailable anywhere else, and is the industry’s first holistic snapshot of the status of onboard retailing today. It serves as an effective guideline for strategic planning for the onboard retailing of tomorrow and as such, its value to airlines is without measure.

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