Air Serbia ancillary revenue spikes 400%
Air Serbia saw its revenue from the sale of services beyond a basic flight ticket increase 402.7% last year, despite a general drop in the number of carried passengers. The airline has continued on a similar trajectory so far this year. The so-called "unbundling of fares" has been one of the main pillars of the carrier's transformation from a full-fare into a hybrid company. The airline pocketed 3.1 million euros from ancillary services in 2018, up from 619.000 euros the year before. Air Serbia said ancillary services achieved their best result to date this June, with the projected budget exceeded for the third time in 2019. Products contributing most to the improved result this year was "Plusgrade" - a newly introduced online bidding service for upgrading from economy to business class, then additional luggage, as well as seat selection.
The airline previously said it would put an even greater emphasis on merchandising in the future in order to drive up revenue. "Traditional commercial approaches are no longer sufficient in making an airline competitive enough to ensure its long term profitability. Passenger numbers are booming, competition has intensified, and low cost carriers have made the aviation industry even more dynamic and tougher than ever before. But most importantly, with flights more affordable than ever, travellers are paying more attention to factors outside of price that differentiate airlines", Air Serbia said. It added, "It’s all about unbundling the traditional airline product proposition, and allowing travellers to create or choose their own journey based on their travel styles and preferences. It’s all about making these packages simple and easy to understand for both the market and the sales network. And in short, it is all about offering the right service proposal to the right passenger at the right price at the right time in the right sales channel".
Air Serbia's ancillary services include: advance seat reservation, excess baggage, priority baggage tagging, Premium lounge passes, fast track, priority boarding, meet & assist, on board special moments celebration, priority check-in, children travelling alone, travelling with pets, sport equipment transport, on board wi-fi, pre-paid meals, extra seat reservation, gift vouchers, Plusgrade, Elevate Deli & Bar and inflight duty free. Despite increasing this revenue stream, customers have criticised the airline for charging extra for a number of services previously offered as part of a standard fare. Last year, the world's ten busiest carriers collectively took in 31.3 billion euros in ancillary revenue.
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