GuestLogix and Airline Weekly Publish Onboard Retail Benchmark

Travel News Asia Latest Travel News Podcasts Videos Wednesday, 24 February 2010

As the airline business model undergoes a radical change, two industry leaders, Airline Weekly and GuestLogix, have created a comprehensive metric to detail the effects of those changes on airlines around the world, and measure the performance of onboard retail initiatives increasingly critical to the success of airline revenues.

The Airline Weekly GXI Onboard Retail Benchmark 2009 provides the industry with a much-needed analysis of trends in onboard retailing, one of the most important segments of airline ancillary revenues. The Benchmark analyzes global, regional and service model perspectives on onboard retailing on an industry-wide scale, covering onboard retail operations encompassing nearly 800 million passenger trips annually.

The report, which took 15 months to collect, analyze and report on their findings, offers an opportunity to measure ancillary revenue performance against the rest of the industry, and to further develop their onboard retail strategies with an eye toward creating a competitive advantage. With statistics segmented in terms of routes, retail models and product performance, among other breakdowns, the GuestLogix report provides specific information valuable to any airline operating in any market.

As ancillary revenues have become crucially important to airlines, many carriers are turning toward in-cabin offerings for sustainable ancillary revenue growth. With the advent of in-flight credit card payment capability and the popularity of the cashless cabin, airlines now have all the tools necessary to create comprehensive, robust revenue development programs within the passenger cabin. How airlines are developing these streams, and the strategies they are employing to ensure their continued development are the subject of the GXI Benchmark.

The report indicates that in the Asia Pacific market, airlines rely overwhelmingly on duty free sales to support their onboard retail programs, as only 10% of passengers in this region are exposed to buy-onboard programs. By comparison, 68% of passengers in the Americas and 32% in the Europe / Middle East / Africa region are exposed to food and beverage and passenger comfort offerings in-cabin. The report also looks at monthly trends within industry benchmarks for various product categories and service models onboard. Food, beverage and passenger comfort items, for instance, yield on average $0.72 per passenger (with top performing airlines yielding nearly $2 per passenger), and duty free programs average a $2.77 per passenger yield.

These trends indicate that onboard retail has already become a game-changing strategic play for the airline industry, said Mr. Tom Douramakos, President and CEO of GuestLogix. This benchmark will be indispensible, benefiting a wide group of industry stakeholders including the airlines, flight attendants, travelers, content providers and investors.

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