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Exclusive Aviation Survey (Part 7)

Ancillary services – a largely untapped potential?

Ancillary services is an area of revenue which still appears

to be underdeveloped in the Indian domestic market.

  • 76% of Full Service Carrier(FSC) passengers and just under 79% of Low Cost Carrier (LCC) passengers were extremely, perhaps surprisingly, prepared to pay for in-flight catering if traveling on an LCC.
  • Only 29% of FSC and 21% of LCC passengers expressed a willingness to pay for LCC in-flight entertainment.

In regard to accommodation services, less than 7% of surveyed FSC and LCC passengers had arranged accommodation using the airline’s website.

Nearly 63% of FSC buyers used a travel agent to arrange accommodation, virtually the same as LCC buyers (nearly 64%).

These responses would draw us to conclude that non-ticket revenues represent a largely untapped revenue potential for Indian airlines. Furthermore, as retail opportunities definitely exist in the Indian aviation sector (see Part 4 of this survey), it is logical to assume that airlines could also look at in-flight sales as an additional source of ancillary revenue.

These areas of activity could forseeably play a role in returning some LCCs to profitability earlier than expected.

Next Week: International opportunities.