Managing ancillary offers has never been easier, and the revenue opportunities have never been greater.
Airlines everywhere have traditionally relied on GDS systems and ATPCO to distribute their offers, but all that is about to change. As airlines go through a transformation toward more modern retailing, achieving greater control of their offers is high on the agenda. Ancillaries are one of the first ports of call for that, for three main reasons:
1. Automated ancillary management and optimization
The first reason is efficiency. The traditional way of managing ancillaries has been rule-based, and largely manual, laborious, and time-intensive. Analysts would have to manually create rules for each market and travel segment, which is not only time-consuming but also monotonous. It is work that is far better suited to technology, ultimately. At Sabre, our answer to this is Sabre Ancillary IQ™. It allows airlines to automate a lot of this manual work to not only liberate teams from repetitive rule creation and management but also to take advantage of machine learning (ML) techniques to dynamically create personalized offers for different travel segments. It frees up analysts’ time to focus on market strategies rather than manual work; resulting in more competitive and profitable offerings, and the ability to innovate and shape the market proactively.
2. Richer data for continuous learning and optimization
Sabre Ancillary IQ also offers enormous amounts of value through insight and continuous learning. The platform collects and analyzes vast amounts of data on customer behavior, preferences, and historical purchases. It then combines this with advanced analytics and machine learning algorithms to make accurate predictions and recommendations. As new data is collected, those models are continuously updated and refined in real-time, allowing the platform to adapt and improve its suggestions. Customer interactions contribute to the continuous learning process, enabling the platform to learn from traveler purchase experiences and enhance its overall performance over time.
By leveraging Sabre Travel AI™, built in partnership with Google Cloud, Ancillary IQ understands market-changing conditions, travel purpose segments, and personalization in real-time. But the data capabilities don’t stop there. The integration flexibility also allows airlines to bring their own data and machine learning models into the mix, creating a truly bespoke solution for dynamic ancillary pricing.
Create a truly bespoke solution for dynamic ancillary pricing
This next-generation merchandising system is essential for airlines. Not only does it make the ancillary management process more efficient, but it also frees up resources to maximize other opportunities too.
3. Being in the driving seat for revenue opportunities
As airlines have complete control over their ancillary offerings, maximizing value should start with the things under their end-to-end control. After all, ancillary offers are provided and serviced by the airlines themselves, and they’re easy to merchandise alongside other products. With travelers now increasingly expecting a highly personalized and competitively priced range of options, the only way to balance that with healthy margins is intelligent, responsive pricing and offers.
Ancillaries are an important way to fulfill this customer demand. They offer so much potential for innovation and personalization that can increase conversion rates and enrich an airline’s offer and attractiveness to customers. They also offer much higher profit margins than traditional tickets, making them a priority for any airline serious about maximizing profits. Sabre Ancillary IQ is already helping to optimize pricing and delivering targeted ancillary offers at scale, with a revenue uplift of up to 10% based on actual implementation results with our airline partners.
Our airline customers have seen increased revenue
up to 10% revenue uplift**
in incremental ancillary revenue opportunities created by Ancillary IQ
**Results are based on production implementation of partner airline customers
and vary, depending on price sensitivity in the market.
If you want to take back control of your airline’s ancillary offerings, personalize prices for different travel segments, and ultimately increase profits – then I encourage you to look no further than Ancillary IQ.
Madhu Kummara is the Principal Product Manager for Ancillary IQ at Sabre. He’s an industry veteran with deep expertise in ancillary management.