October has been an important month for GuestLogix. Various changes at the top, investment from Advanced Inflight Alliance and the purchase – 24 hours later – of UK-based Initium Onboard, speak of a serious business getting its house in order.
GuestLogix claims to be “the leading global provider of onboard retail and payment technology solutions to airlines and the passenger travel industry”, with a 90% share of the North American inflight market and a 40% share globally.
The company is now ready to play an even bigger role in helping airlines become global retailers.
GuestLogix’s newly appointed CEO, Brett Proud, who recently pledged to stop the company from “over-promising and under-delivering”, clearly sees the value in bringing together the brightest minds from the airline, payment and rail industries, to come up with new ideas to generate revenues, advance payment technologies, and add value to the global passenger experience.
Like many industries closely associated to technology developments, the ancillary revenue business has seen unprecedented growth over the last few years and in many cases has struggled to keep up.
“Ancillary revenue for airlines is achieving astounding annual compounded growth. It has gone from $2.45bn in 2007 to $22.64bn in 2012 – a 920% increase,” Proud said earlier this month during GuestLogix’s fourth annual user group conference in Toronto.
During the event, which was attended by 140 delegates from GuestLogix’s global network of onboard retailers, Proud made clear that the airline industry still has much to learn from traditional retailers.
“Airlines need to leverage best practices in the traditional retail world in order to facilitate a winning ancillary revenue programme that speaks to today’s consumer,” he says.
Understandably, given GuestLogix’s role as a technology provider, a key focus of the conference was new and emerging payment methods, at all touch points across the passenger journey.
The company’s director of enterprise development, Ramez Hanna, delivered a presentation about the security of purchases using each of today’s dominant payment methods: magnetic swipe, contactless/NFC and chip & PIN. They all require adequate security measures to ensure their increased use and adoption – otherwise retailing opportunities and the benefits of connectivity are vastly diminished.
Hanna says the United States remains the leading country in credit card fraud in terms of dollar amount. The UK, by contrast, has seen credit card fraud fall to its lowest levels in 11 years, and since Malaysia converted to 100% EMV Chip cards, credit card fraud has fallen by 95%. Transplanting these trends on an international level is essential, if airlines are to become global retailers, he notes. That was one thing all delegates had in common at the conference – a desire to turn passengers into consumers.
There is a gradual shift in passenger expectation, evidenced by the huge brand loyalty shown to unashamedly ancillary-driven LCCs such as AirAsia. The message in Toronto was consistent: your customers will enjoy spending money onboard if you make it easy and deliver value. By doing this, it’s important to develop retail from a trend into a culture, according to GuestLogix.
As GuestLogix’s Americas head honcho Patrick O’Neill put it, turning travelers into consumers throughout the passenger experience – pre-flight, inflight and post-flight – will drive an ancillary revenue engine considered by many to be the $32bn “life vest” the industry needs.