The Retail Store at 35000 Feet


AT 35,000 FEET

How New Travel Trends in the Asia-Pacific Region

Create New Opportunities for Airlines

Brett Proud
EVP, New Markets & Products,
GuestLogix Inc.



It may not have been picked up on the world’s polar and subtropical jet streams, but from Australia to China and from India to Japan and the billions of people who call this dynamic and spectacular part of the world home, a globe-shifting change is in the wind in the Asia-Pacifc region. It’s a change in the way the residents of this part of the world, live, think, spend and earn money, and as it relates to the airline industry, travel. With more tech-savvy, mobile-enabled Asia-Pacifc travelers taking to the sky exploring the world, the airline industry stands poised to embrace a level of consumer retail opportunities in 2012 that may never come again. The following report looks at these opportunities starting with the economic factors that have given rise to the region’s new affuent traveler, and the opportunity presented to airlines operating within the region as a result.


From a historical perspective, when looking at the Asia Pacifc region, it’s truly remarkable how much things have changed over time. A region once shrouded in isolation and Western mystery, is today the driving force of positive global economic news, shifting cultural habits as it relates to travel, and possibly, the best example of successful modern capitalism, and in China’s case, its so-called “command capitalism” hybrid approach. Later this year, on March 31, 2012, Japan and the United States will mark the 158th anniversary of the signing of the Treaty of Kanagawa, a trade agreement, and the two nations’ frst accord. Like the majority of the Asia Pacifc region and the West, the treaty helped solidify a global partnership that has largely been one of benefcial exchange, cultural dialogue and business opportunity.

But while early relations began with at least the hint of gunboat diplomacy (through the persistence and threatened militancy of US Navy Commodore Matthew Perry who brokered the treaty) make no mistake that in the early 21st century, the proverbial tables have turned, and they’ve turned in a signifcant, globe-changing way. No longer is it the West and its diplomats promulgating a sometimes one-way relationship, but rather it’s the East and their everyday citizens and travelers that are fostering a healthier, more balanced give and take. Thanks to rapidly advancing global communications technology, increasing education levels and standards of living, Asia-Pacifc residents are turning that once tug-of-war relationship into the genuine partnership and exchange of people and ideas it should have been those 158 years ago.

And if 1854 was a benchmark year for the “beginnings” of modern Asia-Pacifc and Western relations, we would be remiss if we didn’t mention July 1997 as another important date in this maturing exchange. It was during that summer that the Asian fnancial crisis, known in the press as the “Asian Contagion,” sparked by Asian nations carrying too much debt, and the vagaries of boom and bust economies (sound familiar?), resulted in stock market falls and regional currency devaluations, beginning in Thailand. At the height of the crisis it was feared the Asian Contagion would spread to the rest of the world.

Fortunately, it did not. And the results of the temporary regional fnancial emergency were decidedly more positive, laying the groundwork for the next 15 years and beyond. In an unparalleled measure of cooperation, several Asia-Pacifc nations signed the Chiang Mai Initiative in May 2000, allowing partner nations the ability to borrow money at better exchange rates while securing cheaper debt. In other words, the idea of “fast cash” or high liquidity, would help stave off a repeat crisis. The initiative, which continues to expand and provide regional stability helped breed a level of Asia-Pacifc interdependence the world has never seen. Additional stability and trade opportunity also came from the outgrowth of China’s admission to the World Trade Organization in December 2001. The WTO, an international trade oversight group that seeks to make trade between nations go as smoothly and freely as possible, was founded in 1995 and replaced the General Agreement on Tariff’s and Trade. And it’s that solidarity that is helping the Asia Pacifc region, with some 50% of the global population, today.


At the beginning of 2012, while many parts of North America and Europe continue to forecast economic uncertainty having still not fully recovered from their own “fnancial fu” that began in 2008, the Asia-Pacifc region, with Japan, China, and South Korea as its de facto political and economic leaders, has been largely immune. “More than three years on and this partial immunity is starting to have a very tangible and positive effect on the travel and in-flight retail sector as a new generation of affluent, upwardly mobile, and well educated Asia-Pacific travelers take to the skies, spend money, and explore the globe.” From the high seas to high altitude, Asia-Pacifc is a tantalizingly rich region for development and the rapidly evolving capabilities of the retail store in the sky.


Asia-Pacifc residents are on the move – and in record-breaking numbers. Once known for a collective tendency to travel locally, if at all, and often through group tours and packages, survey after survey fnds a rapidly changing picture – and travel culture – all of which bodes well for airlines operating in the Asia-Pacifc region. Asia-Pacifc travelers are visiting places like the United States, continental Europe and the UK in greater numbers than ever before thanks to rising standards of living, an emerging middle class with decidedly middle class values that include a collective desire to “see the world” and travel, and very importantly, growing mobile technology. And they are doing this travel increasingly as individuals with friends, family and loved ones, but not in collective tours which tends to create a barrier between the single traveler and the in-fight retail experience. Expanding smartphone adoption, (which stands at a regional 19%, compared to a European adoption rate of 51% and North America’s 63 %), further places the communicative and interactive power of the app-driven rich media mobile connectivity in the fngertips of millions of tech-savvy travelers.

In the frst eight months of 2011 the amount of Asians who traveled abroad rose 6% from the same period in
2010, and according to the latest ITB World Travel Report, current forecasts indicate similar robust expansion in the opening months of 2012. In 2010 alone, the total number of Chinese outbound tourist trips reached a record 57.3 million, an increase of over 20% from 2009. Overall, an estimated 90 million tourists traveled abroad from Asia in 2011, spending a collective $86 billion. In fact, whole countries like Tanzania are designing and re-designing their tourist promotion campaigns specifcally tailored to the Asia-Pacifc community and shifting from their go-to tourist countries, namely, Britain, Germany, the US, Italy, France, Spain, and the Scandinavian countries.


France too, among other countries, is gearing up for the heightened Asia-Pacifc demand. So strong has Chinese tourism become, (Paris is the most dreamed about city by Chinese) that French travel publisher Michelin has just released its frst Chinese guide book: “French Wine Tour,” – in Chinese, hoping to attract the glut of Chinese tourists away from the Eiffel Tower and other tourist mainstays in the City of Light.

The Asian outbound traveling good news is especially noteworthy considering Japan’s catastrophic triple disaster earthquake, tsunami, and Fukushima nuclear power plant meltdown, which dragged outbound Japanese travel down 6% in the frst eight months of 2011. However, those numbers too, began stabilizing in the second half of the year beginning in July as Japanese, seeking a “change of mindset” sought out travel as a way to de-stress from the national emergency. And while inbound traffc had been off by as much as 50%, the latest data shows a modest recovery there too, though not as strong Japan’s outbound traffc. As one of Asia-Pacifc’s most critical outbound travel segments, Japan has long been a barometer for the region at large, and will be an important country to watch.


The bottom line is that no regional disaster or global economic slowdown is enough to deter Asia-Pacifc residents’ desire to spend their disposable income and travel. According to the Asian Travel Monitor, (part of tourism and marketing research frm IPK International) looking ahead, a recent survey reveals 32% of Asian travelers plans to travel more in 2012 than they did in 2011 and 37% plan to travel the same amount. Only 19% of respondents said they planned to travel less. At a time when the majority of Western economies are still struggling, all this positive data, anecdotal evidence and upbeat outlook are more than impressive; it’s amazing.

From China to Australia, travelers from this region are poised to command not only an even greater wallet share of the in-fight experience, but from a litany of touch points and through a variety of technologies, including pre-fight, at the gate, even post fight and en-route to the fnal destination. Armed with real-time data-crunching smartphones, tablets and laptops, airlines are more eager than ever to sell and upsell their newest travelers on the most relevant and wanted products and services they can.


Not only are Asia-Pacifc residents traveling in greater number and to more distant destinations, but Asia-Pacifc travelers are spending more money on average than Western travelers too. Thai travelers, for instance, were found to spend an average of $4,730 per trip, nudging out those from Australia ($4,381) and Japan at $4,219, respectively. Americans, by contrast, in 2011 spent far less, generally on the order of $2,985 for travelers per trip.

Additionally, the regional Asia-Pacifc nations’ economies are forecast to enjoy strong gross domestic product (GDP) expansions, ranging from 5% in developing Asian nations to as high as 9% in China and 7.5% in India.

And as a proxy for regional education levels at-large, in 2010, fully 39% of Chinese outbound tourist travels held a Bachelor’s degree and 11% held a Master’s. In other words, not only are outbound tourism expenditures changing, but so are the very demographics behind the men and women spending that money. “As in Western markets, today’s Asian travelers are wealthier, younger and of course, proud members of the tech and mobile-savvy “iGeneration.” Beyond China, education levels, especially higher education throughout the region continues to rise which is having a direct effect on income and Asia-Pacifc wallet share, particularly as it relates to in-fight buying needs.

In just the last few years the improvement is staggering. In more developed economies like Taiwan and Korea, gross education rates, (GER) already exceed 85% of the youth population, while in China it’s at nearly 30%. In real numbers, according to the book, Higher Education in the Asia-Pacifc, by Professor Simon Marginson, that amounts to some 50 million students enrolled in higher education across the region, up from 14 million in 1991, a 257% increase in just 21 years.


Ultimately, a more educated populace is a wealthier populace too. And after more than a generation of rising education levels, it’s starting to have an impact on the region’s social strata. While the term “middle class” is fraught with defnitional diffculties, the simplest defnition might be: an individual whose income level allows him or her to save some percentage of their earnings while having enough disposable income remaining to purchase goods and services not directly linked to the family food budget or subsistence urban living. Commensurate with those economic levels, cultural attitudes can include: self or group interest, a desire for the accumulation of goods, and tendency toward favoring their country’s established power structure to stave off political or economic instability that would threaten the other two behavioral patterns.

By these standards, the regional middle class is rising and rising fast. Arthur Kroeber, of Dragonomics, an independent research and advisory frm, specializing in the Chinese economy, estimates that China’s middle class sits at 23% of the total population. While that may not sound impressive, 23% of a nation with 1.3 billion people is 300 million – or just under the entire US population. Others predict the percentage of Chinese urban middle class to reach 75% by 2025.

In India, middle class estimates are far lower, with some 2 million Indians living at North American and Western European standards. But here too, management consulting firm McKinsey & Company, predicts rapid rises in the numbers of Indian’s living just below this threshold.

To be sure, per capita spending power for many of these individuals remains below Western standards. But even so, the opportunity for Western retailers, hoteliers, and airlines to attract and build frst-time loyalty for this new and rapidly expanding upwardly mobile population segment will never come again.


As evidenced from above, after literally centuries of economic, cultural and political seclusion, the Asia-Pacifc region, including several nations’ whose economies in the past have rightly been called “miracles” and “Tigers,” are re-defning their global infuence – not with weapons, thankfully, but with consumer wallets. As a new generation of travelers takes to the increasingly digital and mobile-connected skies, the retail opportunities for airlines are practically limitless and nearly as unmatched as when airlines began frst developing the modern in-fight experience, including drinks, food, and the in-fight mainstay, the full length feature flm.

Looking ahead, airlines who employ a robust onboard retail strategy can expect continued good news, increasing airline revenues while ensuring Asia-Pacifc regional loyalty for decades to come.

Despite continued fuel price fuctuations, and recent price hikes, (with the 2012 average price for a barrel of jet fuel – 42 gallons – costing $129.50, up 15.4% from this time last year) ancillary revenues, especially ones catering to the Asia-Pacifc consumer, will be critical for airlines in their continued quest to capture this new audience.

The following fve growth opportunities are well within reach for airlines in the Asia-Pacifc region. These opportunities largely focus on technology to improve revenue sources both in-fight and throughout the travel experience, as well as on expanding the ecosystem that surrounds the fight experience in a way that captures revenue for Airlines.


Traditional duty free and in-fight retail is not what it used to be. New technology is changing the way airlines sell products and services to their passengers. This technology represents an evolution in the approach to ancillary revenue development more than the creation of new tools to execute established strategies more effciently. For instance, the GuestLogix OnTouch® platform is designed to create meaningful new ways for airlines to connect with travelers, and provide more opportunities to monetize the travel experience. Managing and controlling branded onboard stores with travel-relevant destination based products and services and providing access to retail opportunities in the booking path, at the airport or gate, in-fight, and at destination using dedicated point-of-sale systems, personal electronics and the mobile channel are hallmarks of this approach.


Consider the difference between “traditional” booking path ancillaries and onboard retailing. Earning a commission from a hotel reservation is contingent upon attracting a potential passenger to the airline’s proprietary website (and luring them away from more powerfully marketed Online Travel Agencies), presenting that passenger with relevant and attractive partner offerings, and avoiding drop-out or abandonment. In other words, there are many variables beyond the control of the airline.

In contrast, “earning revenue through in-flight retailing involves presenting a captive audience primed to spend, with convenient, destination-relevant and attractive retail options through a variety of channels (physically in the cabin, as with food and beverage; through a catalogue, as with duty free; or now, with Wi-Fi capability, through a controlled online portal), and enabling that audience to complete a transaction easily and securely through a branded “onboard store.” According to recent studies, the average shopper spends approximately 20 minutes in a Wal-Mart store. Being able to increase that shopping time in-fight is an essential beneft that airlines can take advantage of.

A branded onboard store is not actually a new concept per se – think of a retail outlet on the ground and imagine replicating that idea in the cabin, minus the inventory. What is different, however, is the way in which this concept has been developed to give airlines the ability to create an exclusive and branded experience for their passengers, one that represents the airline’s brand and has multiple touch points that extend the customer relationship far beyond the cabin.

Like a retail store, the branded onboard store will involve a different set of characteristics that vary from airline to airline, taking into account, for example, fight duration, destination, and route (business, leisure). Using this data, the airline is able to “stock its shelves” with relevant products and offerings that speak directly to its passengers. In doing so, the airline is able to focus on the needs of the passenger, offering products and services that are relevant and wanted, and a seamless interaction with them throughout their entire journey.

While much of the in-fight sales activity is currently dependent on specialized onboard point-of-sale devices to complete transactions, the connectivity factor plays a vital role in an airlines’ ability to provide targeted offers and exclusive content to drive sales. But rather than being viewed as a stand-alone product, in-fight connectivity is an enabler, providing for a seamless and managed onboard buying experience, delivered right into the hands of airlines’ passengers via personal devices and smartphones. Not only can they explore the onboard store, but passengers are empowered to complete their transactions from the comfort of their seat or own device.

While both traditional booking path ancillary revenue streams and onboard retailing ancillary revenue streams may be sustainable, one presents a clearer path to growth – onboard retailing. Through innovations like the OnTouch™ Technology and Merchandising platform from GuestLogix, airlines using such platforms have the ability to extend and enhance the onboard shopping experience to all travel touch points with their customers and this includes offine. The onboard store is fully integrated with the airline website to support the prepayment of entertainment, meals, destination services and other retail offerings, driving sustainable ancillary revenue opportunities even further.


Technology is also making the onboard store a more comprehensive revenue generator for airlines and a number of factors come into play in this model. Convenience – passengers purchase destination-specifc tickets that are available upon arrival, eliminating the need for queuing or waiting; multiple payment methods – transactions can be made in virtually any global currency, including loyalty cards and stored gift cards, or in local currency prior to departure – all of which provides convenience to the consumer and enhances the passenger’s relationship with the airline.

This approach can be seen in the Heathrow Express service, a transit option that provides fast and direct rail transfers from LHR to central London. American Airlines passengers can purchase Heathrow Express tickets from a number of touch points including the departure or club lounges before boarding, as well as in-fight through POS terminals. Banking on the convenience factor, American earns attractive revenue from an in-fight transaction that did not require inventory or additional service or labor to be provided.

This example illustrates the sustainable approach to ancillary revenue generation that airlines will be focusing on, by offering innovative and targeted destination-based products and services to enhance their customers’ experience. And by embracing in-flight technology, airlines are better positioned to build loyalty and monetize more touch points with their customers throughout their entire journey, pre-flight, in-flight and post flight.


Onboard retailing, while certainly not new to passenger aviation, is still basically in its youth as airlines experiment away from the limited duty-free and inventory-bound model. As airlines have yet to universally adopt retail attitudes and strategies, they lag behind the conventional retail industry. This however, is changing as technology becomes available to facilitate sales with cashless payment options as well as a comprehensive selection of retail options, but the adoption rates can vary regionally in parts of Europe and Asia as they integrate alternative payment options such as BillMeLater, UseMyServices, and newcomers like RhinoPay as well as loyalty rewards, prepaid cards and coupons.

Overall, the number of airlines transitioning to entirely cashless cabins has grown signifcantly in the last few years and includes Delta, American and in fact every North American airline, as well as low cost airlines including Southwest, Spirit and WestJet. Clearly, the adoption of handheld point of sale capability has propelled the growth of in-cabin retail and the evolution in this technology will allow airlines to complete credit card transactions in real time, reducing the risk of fraud. These technologies are defning the onboard retail space while back-end technologies are refning it, allowing airlines to leverage this technology to grow revenues and give greater control to airlines the world over.


These backend technologies are taking in-cabin, online sales to the next level, and transforming airlines into retailers in the sky. Platforms that enable airlines to create logical product categories and relevant service offerings through an online sales portal are allowing those airlines to leverage in-fight internet access to their advantage. This allows airlines to provide free Wi-Fi access to passengers without sacrifcing the incremental revenue that could be earned by selling access. Unharnessed, Wi-Fi reduces itself to an instant commodity and leaves signifcant money on the table whereas airlines that utilize back-end onboard retail technology don’t have to charge their passengers to enter their online retail spaces. Instead, they harness their Wi-Fi “asset” and turn it from a product with fnite revenue to a revenue enabler of signifcant proportion.

Technology has always gone hand-in-hand with sweeping industry transformation, and the airline industry is certainly an industry being transformed. Ancillary revenues are sometimes the only source of proftability for airlines still dealing with a volatile marketplace, and as such many airlines are seeking the most sustainable ancillary revenue streams available.

For many this means harvesting the booking path for commission-generating opportunities. For others this means optimizing the onboard retail space. But for most airlines and for the entire industry, creating a sustainable ancillary revenue strategy means embracing both a robust booking path and an advanced onboard retail space. The onboard store operates in a strictly contained shopping environment 35,000 feet in the air. The store has locked doors with shoppers strapped inside for a fxed amount of time, often with no distractions, and often with plenty of idle time. If the average consumer visit to a supermarket is 20+ minutes in duration, then imagine the market potential of an onboard store populated by shoppers on a 2 to 4 hour fight?

A key aspect of capitalizing on consumer captivity is streamlining the purchasing process. The current approach relies on the Flight Attendant as the facilitator to the sale, but the application of technology can shift the sale to become more passenger-centric. It’s important to remember an old statistic about movie theatres and theme parks: less than 50% of sales happen at the door. The rest is concessions sold to a captive audience.


Even as app developers and the smartphone-owning public, (19% for the Asia Pacifc region, but here too, rising steadily) have seized on the airline and travel industry as fertile ground for all sorts of mobile innovation–fight tracking apps, apps that determine TSA wait times, rich media and internet access for delays and layovers–the airlines themselves have yet to leverage this channel to its fullest extent. Because smartphones and connectivity are changing the way travelers behave, airlines have the opportunity to compliment this behavior and grow their revenues in the process. The recently announced OnTouch® Concierge mobile application allows airlines to provide their customers with access to their branded onboard stores via their smartphone, where they can purchase a variety of goods and services including meals, movies, ground transportation, theatre tickets and gifts, and generally products and services that today’s travelers are looking for other than traditional duty-free items.


Though many opportunities for airline revenue growth hinge upon extending a passenger’s interaction with the airline brand as far up and down the travel chain as possible, the average traveler’s interaction with the airplane itself is only a tiny fraction of any given journey. Add to this fact the increase, in recent years, of time spent in the airport not due to any action on the part of airlines (regulatory guidelines, weather delays), and the gate space suddenly becomes a ripe area for revenue growth. Travelers have called for this themselves. Offering destination-based products and services targeted at travelers at the gate, pre-fight, allows airlines to implement these new ancillary revenue/retail initiatives free of any potential barriers that may be present onboard.


Many of the retail growth strategies described here are enabled by handheld POS devices and effcient new technology. In order for any of these strategies to be true growth engines for airlines, however, the method for collecting payment must be as seamless, consumer-friendly, fraud resistant, and secure as possible. GuestLogix has been at the forefront of developing this capability for airlines. And part of that leadership stems from the company’s global payments process and presence. Working with airlines in North America, Europe, the Middle East and Asia-Pacifc, that fexibility leaves us better able to respond to emerging technology and be aware of evolving security and card scheme risks. “Today’s travelers, flying at 600+ miles an hour to literally any point in the world, means that accepting multiple payment mediums and methods is a must. Travelers must be enabled to transact anywhere, anytime, and in any currency, coupon or loyalty card, or with major credit cards” including: Visa credit and debit, MasterCard credit and debit, American Express, Discover, Diners International, JCB, and China Union Pay.

Moreover, our global payments process is tech fexible: payments can be received via Chip and PIN transactions, card swipe, contactless cards, Near Field Communication (NFC) and e-Commerce transaction, (mobile). And while no traveler appreciates a declined card, payment re-submission must also be seamless, but safe.

For instance, the airline industry’s frst handheld point-of-sale (POS) device that looks and behaves like a smartphone was launched in December of 2010, however a new device, the UBITA, represents a next-step departure from the traditional POS machines currently in service with most airlines, and enables airlines to maximize sales and revenue opportunities in their onboard stores as well as at other travel touch points such as the lounge or departure gate with contactless payment capability, as well as Wi-Fi, Bluetooth and RFID connectivity, and is designed to accept any payment type. A working model of the new device will be ready for certifcations later this month, with devices available for shipping worldwide in May 2012. The UBITA is supported by GuestLogix’ OnTouch® Technology Platform, which powers the creation, operation and management of the onboard store and retail environment.

The UBITA features a lighter, streamlined design and supports the MS Windows, Android and Intel/Samsung architecture providing for a variety of integrated mobile applications. At only 70x150x24mm, GuestLogix’ new device is a fraction of the size of other handheld POS devices and signifcantly lighter; and, with its increased battery power, it is able to hold a full charge through a full day of continued use.

While the online and mobile booking Asia-Pacifc segment remains in its nascent stages, it was still expected to reach a value of $51.6 billion in 2011, growing by 30 to 40% in 2012. In other words, for airlines and their third-party ancillary providers, the time to engage the new, mobile, young, middle class and tech-savvy Asia-Pacifc traveler is now – before the market fully matures.


From the first attempts at unbundling the standard airfare by low cost airlines more than a decade ago to the full-fedged, wholesale adoption of incremental fees and commission-based ancillaries of today, ancillary revenues have assumed a central position in most airlines’ business models – not just in the cabin as a 35,000 ft. retail store, but at multiple touch points in the traveler experience, beginning before the gate and not concluding until the traveler has reached his or her hotel. But as with most evolutions and transformation – in all industries, not just aviation – they have been spurred by signifcant advances in technology and a rise in consumer expectations for service.

When it comes to Asia-Pacifc travelers those expectations are rising to almost “demand it” levels. A recent survey (August 2011) by Boeing and the Global Business Travel Association, confrms this point. The study found that Asians are already the most tech-savvy fiers, with 48% of survey respondents using Facebook or Twitter in travel planning versus 10% for US travelers. Many, the survey found, valued access to in-fight Wi-Fi and AC power adaptors, presumably for their portable mobile devices, than even the in-fght entertainment offerings.

To be sure, without technological innovation, ancillary revenue programs would still be in their infancy, and they certainly wouldn’t be the lucrative lifeblood we are seeing bolstering balance sheets today, nor would they be as effective in introducing the Asia-Pacifc traveling set to the airline retail experience.


To succeed, airlines must rethink their traditional relationship with travelers, doing their homework to better understand and learn Asia-Pacifc traveler needs, wants, and desires. In the retail environment, everytime a consumer is treated well and provided exceptional service they are more apt to return. Airlines must master the art of selling more than just tickets. The relationship must shift from airlines and passengers to marketers and consumers. Passengers, who are encouraged to become consumers, ultimately become long-term buyers and a consistent source of non-ticketed revenue. Repositioning themselves as retailers with a travel-relevant offering, airlines can elevate their relationship with customers, and raise their profle as an airline of choice, especially in a region still new to “outside” airlines.

Delivering a customer experience that is personalized, reliable and focused on the specifc offers for the traveler will increase traveler loyalty, which will translate into sustained ancillary revenue from additional products and services in a recurring fashion. Ultimately, the question airlines must resolve is not “to sell or not to sell” but rather “what to sell and how to sell it.” It’s a question that can be answered through the business intelligence analytics gained through point of sale and onboard technology, giving airlines an at-a-glance view of trends in cash, credit and other forms of payment, as well as from the item’s purchased side, a “what’s hot” and “what’s not” snapshot. Armed with that level of real-time instant customer-traveler knowledge leaves airlines effcient and nimble enough to quickly modify their ancillary strategy.

Airline travelers may be a captive audience, (whether they’re at the gate or in the cabin) but nothing will compel them to buy unless a product or service is presented to them properly. Real value for both the consumer and the airline can only occur when the airline focuses on the full customer relationship, and on turning travelers into consumers. Only at this point can an airline hope to meet its customers’ unarticulated needs and begin to build consumer – not traveler – loyalty.

The Asia-Pacifc region continues to amaze the world with its economic prowess and educational and middle class gains. But as an almost Wild West era of unbridled growth yields to maturity, you can bet that for airlines, the coming year of unmatched opportunity and their own brand of expansion, will not come again. Failure to embrace this new and exciting region now might leave an airline that pursues such a foolhardy approach cut off from nearly half the planet’s traveling population. It doesn’t take rocket science to conclude that is a poor approach and not smart business.


On his maiden voyage to Japan in 1853 Commodore Perry, with the blessing of the US government, sought and achieved a major goal: the granting of American access to Japanese ports for the purposes of selling commercial goods. To sweeten the deal, Perry brought with him a wealth of yet more goods, including: whiskey, muskets, a telescope, and one locomotive. The degree in which commerce was anchored to Perry’s voyage, as evidenced by his inventory, speaks to the centuries-long desire to shift the traveler mindset: travelers aren’t just passive participants in some voyage from point A to point B. Rather they are, and have always been receptive to the onboard retail environment, whether that was through 19th century shipping lanes or through today’s
600-plus mile per hour commercial airlines.

In keeping with the digital and mobile technology at the heart of these airline retail and regional demographic changes, it’s ftting, perhaps, that along with trains, beverages and weaponry, Perry sent along something else: two telegraph machines and four bundles of telegraph wires. As if predicting the vast consumer electronic changes ahead, just fve years after Perry’s visit, the frst transatlantic telegraph cable opened for business between North America and Europe.

Just as the telegraph was rapidly reshaping the 19th century technological landscape, on-board technology is having a similar impact on travelers today. Asia Pacifc travelers are tech-savvy, mobile-enabled, wealthier than ever before and are eager to spend their dollars in-fight and throughout their travel experience.

After a challenging decade that saw external price fuctuations, surging fuel costs, and diminished profts for airlines, it’s truly humbling and heartening, not to mention spectacular, that it’s the people – people who have worked themselves from poverty to plenty – and not government agencies, or salespeople, or supranational organizations like the World Trade Organization, whose broadening economic, political, and social enlightenment is the engine of growth and expansion refueling a sense of purpose and commitment to airline travelers, all the while inspiring one of the industry’s greatest commercial opportunities.

The onboard retail store might be a 35,000 ft. event, but thanks to the latest mobile and point-of-sale technology solutions, (along with the business intelligence metrics to fully illuminate travelers’ shopping needs, wants, and desires) it’s an entirely ground-level personalized experience.

In fact, it makes you want to reach for the sky, doesn’t it? At GuestLogix, we already have.

Brett Proud : EVP, New Markets & Products

GuestLogix Inc.

GuestLogix is the leading global provider of onboard store technology which helps airlines build and manage onboard retail operations tailored to their needs and their passengers. Serving 40% of the global airline passenger traffic, GuestLogix has become a trusted partner to airlines around the world. The Company is headquar tered in Toronto, Canada and maintains sales and support facilities in the US, UK, Singapore, and S. Korea. GuestLogix is publicly traded on The Toronto Stock Exchange (Symbol: GXI). More information is available at

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