A Review of Ancillary Services Implementation in the Revenue Management Systems
Ancillary services in air transport represent a set of services provided to passengers to choose from, enabling them to enhance their travel experience while accumu-lating additional airline revenue. Low-cost airlines pi-oneered the practice, but the separation of ancillary services from the basic s...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
University of Zagreb, Faculty of Transport and Traffic Sciences
2022-07-01
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| Series: | Promet (Zagreb) |
| Subjects: | |
| Online Access: | https://traffic2.fpz.hr/index.php/PROMTT/article/view/18 |
| Summary: | Ancillary services in air transport represent a set of services provided to passengers to choose from, enabling them to enhance their travel experience while accumu-lating additional airline revenue. Low-cost airlines pi-oneered the practice, but the separation of ancillary services from the basic service has become an intense-ly growing trend in the air transport industry over the last decade. This practice has enabled low-cost airlines to significantly reduce the price of the basic service. To remain competitive in an era of transparency provided by search engines, traditional airlines offer ancillary ser-vices in addition to the basic service. To meet the passen-ger’s needs, a whole range of ancillary services has been created. However, existing revenue management systems do not take this ancillary revenue into account when cal-culating reservation limits. If the airline knew that an in-dividual passenger is willing to pay more for ancillary services, the system would be able to adjust the availabil-ity of the service for that passenger during the booking process. A review of research on passengers’ willingness to pay for ancillary services is presented in the paper, as well as a review on research on the personalisation of ancillary services and challenges of integrating person-alised pricing into existing revenue management systems. |
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| ISSN: | 0353-5320 1848-4069 |