Airline loyalty programmes: Access to core flight ancillaries sparks a new approach by Ryanair

Peter Gerstle, Head of Travel Products
19 July 2016
By Peter Gerstle, Head of Travel Products

Ryanair have gone old-school with the introduction of their new leisure and business fare bundles, while keeping their headline fares stripped down  to drive website traffic. With their improved booking process, Ryanair will surely be able to convert a large number of passengers onto these new fare bundles, increasing ancillary revenue (AR). As a recap, AR merchandising focuses on airlines' unbundling their service offering and only charging passengers for items they wish to purchase.

Clearly, Ryanair has taken note of the success that easyJet experienced with their Flex Fare.  They are also simply the last in a line of airlines such as BA and Lufthansa that have introduced a three-tiered economy fare structure. The added benefit of Ryanair and easyJet's fares is that they actually contain additional services, whereas legacy carriers' economy fares mainly differ in fare rules. Fare rules govern whether a ticket is refundable and if additional charges will be imposed in the event that travel plans change.

This confirms my long-held belief that innovation in ancillary revenue lies in merchandising methods, rather than finding new things to sell. Fare bundles are an obvious solution, as are annual memberships that provide access to core flight ancillaries, thus implicitly increasing share of wallet.

In fact, one might say it's a new approach to loyalty

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About the author

With global experience in Travel, Marketing, eCommerce, Sales and Product Development is responsible for defining the vision, leading the strategy development and management of Collinson's suite of travel products, whilst also driving innovation for the group's travel proposition.