1. Studio Project 6 Boeing and LiveWell
Ancillary Revenue
Studio Project 6
Boeing and LiveWell

2. A brief history of the evolution of the airline service model

3. Game Changer #1
President Roosevelt cancels the US airmail contracts and gives it to the Army (Air Mail Act of 1934)
Airlines turn to passengers as source of revenue for airlines

4. Service was personalized

5. Game Changer #2
Deregulation happens in Market opens up to many more passengers Price competitiveness and service are the big differentiators

6. A new world for the airlines
Prices fluctuate
Airlines try to entice through service

7. Game Changer #3 Fuel Price constant rise New business models
Hedging bets on fuel and stocking up
Examples: Delta has Premium Economy seats, and I think United has it, too. You pay a little more for more leg room
Southwest – bags fly free (knowing that they could be brining in money and yet they hold true to their brand)

8. This should be familiar

9. Game Changer #4 Internet Mobile devices Ala Cart Mode Loyalty Programs
Boomers have seen as a take away (food, leg room, “luxury”, free checked bags, alcohol). All the take aways make Boomers resentful of the airlines.

10. What is Ancillary Revenue?
This is any other way an airline makes money beyond seats (airline tickets).

11. Target Audience Boomer generation
Services and needs for this segment during travel

12. Today: Ancillary Revenue for Airlines
For Purchase
food
space (seat)
ear buds
alcohol
Credit card collaborations
Charge for Wifi access
Limited wifi; charge for entertainment
Baggage fees

13. Please, no… Bad examples of what airlines have thought about:
Ryan Air:
Charging for the use of lavatory
Standing room only
Mass marketing on every surface of airplane

14. The big question
"What ancillary revenue or feature on the airplane could you image for the boomer passenger segment that makes money for the airlines and improves the travel experience?"
What if you had the opportunity to start your own airline. How would you make money? How would you entice more passengers to take their flights? What would an airline/airplane look like that catered to the Boomers? And what would the airlines charge for those things?