Special Report: Aviation Technology
Seats for sale – in flight
September 1st 2013
GuestLogix, the leading global provider of onboard retail and payment technology solutions to airlines, and the Mainland’s largest carrier, China Southern Airlines (CSA), have claimed a world first with a platform that allows a carrier to sell seat upgrades inflight. Read More »
The Canadian-based company’s president and chief executive, Brett Proud, said CSA was the first airline able to run the auctions. “I believe the burgeoning middle-class business person [in China] sitting in the middle [economy class] seat ahead of a nine or 12 or 14 hour flight will want to upgrade. I’m sure Air China and China Eastern will follow China Southern shortly,” he said.
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| China Southern Airlines: a world first selling upgrade seats inflight |
Under the deal with the Guangzhou-based airline, GuestLogix will deploy its onboard retail technology platform, including point of sale (POS) handheld devices, on CSA flights. For the first time the system will be able to accept China UnionPay bank cards.
“Implementation of the platform will improve in-cabin service and enhance customer experience, while allowing China Southern to generate ancillary revenues via a new and innovative form of onboard merchandising,” said Proud.
“This win marks the global introduction to China UnionPay card acceptance in an inflight environment, as well as representing GuestLogix’s continued expansion in the Asia-Pacific region.”
Zhou Junbao, general manager marketing with the commercial steering committee of CSA, described the auctions as “an exciting new luxury” on board.
GuestLogix has also signed a contract with China’s first low-cost carrier, Spring Airlines. Spring is deploying the company’s onboard retail technology platform across its fleet. GuestLogix’s OnTouch® Analytics platform will optimize the airline’s onboard retail performance.
Zhang Xiaolu, general manager of Spring’s ancillary revenue department, said the retail platform and handheld POS devices will be implemented on the airline’s 60 domestic and international routes to accept major credit cards for food and beverages and duty-free and destination activity products.
“Use of the OnTouch® Analytics platform aims to ensure all flights are optimally stocked and to identify areas for improvement, enabling the carrier to enhance the generation of ancillary revenues onboard,” he said.
Elsewhere in Asia, Proud said the biggest activity in on-board purchasing was post flight delivery. “And that doesn’t just mean duty free. It means merchandising in general. Airlines don’t want to take these things on board because of the weight factor, but they also want to have a wider range of products to sell,” said Proud.
The concept is far from new. Hong Kong’s Dragonair, a subsidiary of Cathay Pacific Airways, launched a home-delivery service in 2010 after joining forces with duty free concessionaire, Inflight Sales Group (ISG), three years earlier.
Initially, home delivery was confined to Hong Kong, but has expanded to Mainland China, Taiwan and, in April this year, to Japan, Korea and Singapore.
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| 'I believe the burgeoning middle-class business person [in China] sitting in the middle [economy class] seat ahead of a nine or 12 or 14 hour flight will want to upgrade' |
| Brett Proud President & Chief Executive GuestLogix |
A deal was negotiated between Guestlogix and ISG to install its inflight retail technology across the Cathay and Dragonair fleets. Dragonair offers 300 products, 248 for inflight sale and 52 for home delivery. The four-year partnership began in July.
“Our system with Cathay Pacific will link the airline with the fulfillment systems of a number of different providers. When an order is made on board it will go to the back office of the fulfillment providers who will send merchandise to a passenger’s address in Hong Kong and Macau,” said Proud.
Dragonair inflight sales and amenities manager, Irene Chan, said the system was working well. The overall sales performance in 2012 was “satisfactory” and 2013 had seen a “positive start”.
The home delivery offer is made up of six categories: baby products, kitchenware, sports goods, suitcases, wine and food plus a number of special items, including golf sets.
“Transactions through seat-back screens is proving popular in the Asia-Pacific,” said Proud, adding that people in the region bought more than anyone else globally. Seat back shopping was different to reading Sky Mall catalogues in which little thought was given to the goods customers might buy, he said.
“The biggest opportunities in the region will be off-board. The mobile applications the airlines generally offer have been for electronic boarding passes, managing your itinerary or informing passengers about gate changes. Those airline applications are going to become an important part of the ancillary strategy for airlines,” said Proud.
What airlines were not doing well, he said, was using the platform to make ancillary offers. He gave an example of a passenger waiting at a gate in Shanghai for a flight to London Heathrow. “There are 90 minutes before the flight departs. The airline knows his itinerary. Why not, through the cell phone, offer him a good price for a Heathrow Express train ticket.
“This is where the airlines need to get their act together. The ones that do will be the winners and the others will be the laggers,” said Proud.
| GuestLogix guide to doing business in China GuestLogix boss, Brett Proud, is the first to admit that making inroads into the Mainland Chinese market was far from easy. “I’d say it took two and a half years to secure our first contract,” he said. “We had our learning experience. “We figured out we had to start in Hong Kong. You had to have people who could speak Cantonese and Mandarin. You had to have people on the ground. Now we know what we know it doesn’t seem so hard any more, but the journey to get to here has taken longer than we expected.” |
