Selling premium flight cabins as inclusions within some of their packages boosted margins between five and seven percent for one of our European River Cruising customers.
Helen was newly appointed as the Head of the Airline Division of a European River Cruise Operator. The CEO decided that there was more to be done to offer a much more seamless experience for customers by packaging flights within their cruise offerings as customer feedback indicated that they preferred to deal with a single point of contact for all their air and land requirements and overwhelming favoured flights being offered as part of the cruise package. Past experience showed that there was no fixed policy on how to manage air and one of the major barriers to offering competitive fares was the lack of ability to prove to the airlines the value they could generate from their business.
Helen started looking at the her key markets out of Australia, New Zealand, Singapore, the UK and USA from which they generated around 80% of their bookings. She also realised that her air ticketing team held a high level of expertise with air sales and were also able to ticket using their own IATA Numbers. So the first step she took was getting her team to ticket on their own IATAs so she could start measuring the volume and value of air sales. Next she subscribed to some of the key modules that Airline Metrics offered showing sales from each POS location but also consolidating them into a single currency. This offered her a global and local view of O&Ds sold, RBDs and Cabins that customers booked as well as how much revenue was generated across various carriers. Finally, she started sending out sales reports to various key airlines where she was confident she could strike up annual volume agreements.
Helen noticed more and more customers booking premium cabins for long haul flights. This meant even though their ticketing volume was low compared to bigger travel agents the revenue value was tremendously high because of the number of business class and premium economy flights they were beginning to sell. When she started to put these facts out to the airlines, she no longer had to reach out to them for deals, it was the other way around with them offering her huge incentives on both premium and non-premium RBDs. This unplanned income boosted margins by around 5% to 7% for each booking packaged with a premium flight.