As airline passengers grow wary, and perhaps weary, of more fees and higher ticket prices, Global carriers may look to onboard advertisements as a way to raise revenue without further tapping customers’ wallets and patience.
International experience has shown the effectiveness of placing advertisements onboard aircraft. Advertisements provide stable long-term contact with the audience. During a flight, when passengers spend 90% of their time in their seats, they easily digest all sorts of information, be it related to business or entertainment.
Some airlines outside of the U.S. have already offered much of their fleet for ad space. Blue Air was the first flying company in Romania that allows products advertisement on board. Dublin-based low-cost carrier Ryanair, for example, solicits ads for its overhead bins, tray tables and aircraft exterior. Tempe, Ariz.-based US Airways Group Inc. is probably the most assertive in soliciting onboard ads — it was the first major U.S. carrier to put ads on tray tables.
Of course what is considered “fair game” for advertising is up to the airline, but a growing number of carriers will look to advertising as a relatively untapped method to raise cash without nickel and diming customers.
Co-branding initiatives can also be an economical way to provide a
service or even additional sources of income for airlines. Faced with ever more experienced consumers, who routinely ignore the mass marketing commercials and ads thrown at them, consumer brands are increasingly will to pay airlines to let passengers experience their product in a relevant setting, since airline passengers are an interesting audience.
As an example, when Samsung launched its new Galaxy tablet in late 2010, it teamed up with Virgin Atlantic to let the airline’s premium passengers try out the devices at the Virgin Atlantic Clubhouse lounge in Heathrow. Virgin America in July 2011 teamed up with Google to allow passengers to “test-fly” the tech giant’s new Chrome book laptop computers for free. From 1 July 2011 through mid-January 2012, Virgin America passengers could pick up a Chrome book on select airports and use the computers onboard their flight.
It is not unusual for airlines abroad to have advertisements on their planes. Low cost carriers, for instance, depend a great deal on ancillary revenue from advertisements on their planes. In these times of high losses, more airlines are looking at multiple options to earn cash. To begin with, one Jet Airways Boeing 737 will carry an advertisement of Nokia Lumia, the Finnish company’s new Smartphone. Motorola used the interior of seven Volaris aircraft as a canvas to create an immersive experience to introduce the new Motorola Xoom tablet computer to the Mexican market. Suzlon, a leading wind power company, is one of many advertisers finding great success with large, highly visible graphics on bulkhead walls throughout Jet Airways aircraft. U.S.-based Spirit Airlines provided the perfect venue for the Las Vegas Convention and Visitors Authority to extend its “What happens in Vegas stays in Vegas” campaign. Atlantic City is a popular Spirit Airlines destination, and therefore, the perfect choice for Harrah’s and Caesars Atlantic City Casino Hotel to advertise.
Exactly how much money could be raised by these sorts of advertisements varies greatly by a carrier’s fleet size and demographics, but according to a survey by technology solution provider Amadeus, airlines of the world over had earned $32.5 billion from ancillary revenue, a rise of 43.8 per cent over last year. A few low-cost airlines, including Ryanair, Air Asia and easyJet, earn nearly 20 per cent of their revenue from such ancillary sales, while the global average for low-cost carriers is 6.5 per cent. US airlines contributed 38 per cent of the ancillary revenue, the report said. For US carriers, the sale of frequent flier miles, baggage fees, commissions, on-board sales, hotel bookings and priority check-in and seating were the main contributors to revenue.