Rohit Talwar- The 3 R's of Strategic Survival & Growth for FTE Keynote Vancouver 6/9/12

The 3 R’s of Strategic
Survival and Growth
Rethinking the Model
Reinventing the Experience
Revolutionizing Revenues
FTE Vancouver
September 6th 2012
Rohit Talwar
CEO - Fast Future
rohit@fastfuture.com
www.fastfuture.com

Contents
• Presentation p. 3
• About Fast Future p. 51
• Image Sources p. 61
• Background Notes p. 66

Our Research
‘Reinventing the Airport Ecosystem’
• Drivers of change
• Science and technology
advances
• Customer expectations
• Innovation priorities
• Strategies and business models
• Surveys to test ideas and
scenarios on a global audience
• Models for managing the airport
ecosystem

Our Research suggests airports need to see themselves an
as ecosystem - An integrated portfolio of models

‘Future Proofed’ Organisations
Work on 3 Horizons in Parallel
4-10+ Years
Creating
the Future
1-3 Years
Drive for
Growth
1-12 Months
Operational
Excellence

Future Proofing the Business
Mastery
Models
Magic
ManagementMindset
Muscle
Message
Markets

Markets – What are the Key Trends?

Demographic Destinies
2 billion more people in 40 years –
Demographics is Driving Economics
1998
448 691
729
5231
4216
740
1051
346
596
Source : United Nations2011 2050

Mastery – What do we
Really Need to Understand?

The Ultimate in Collaboration?
Sharing of Aviation Profit Pools

Core TechnologiesUsed by Pioneers Now Pioneered by 2015 Pioneered by 2025
Personal Technology
Mobile phones
3G / 4G smartphones
Augmented reality
Gesture recognition
Intelligent software assistants
Mind control headsets
3D displays (Glasses free)
Intelligent interfaces
Flexible screens
Digital currency
5G phones
Biologically embedded electronics
Eyewear embedded screens
Intelligent brain-computer interfaces
Streamlining the Passenger Journey
Biometrics –voice / facial / handprint
recognition
Quick-response (QR) codes
RFID
Interactive displays
Near field communications (NFC)
Temporary airports
Biometric signature – heartbeat pattern
Body language recognition
Robotics and automated services
Virtual airports
NFC integrated into all travel documents
and passports
Use of human genomic profiles
Enhancing the Passenger Experience
Social media
Passenger-polling systems
Hybrid platforms (i.e. Google Wave)
Interactive surfaces
Virtual worlds
Vertical farming (basic)
Next generation cinematic experiences:
6D and beyond
Real-time language translation
Reality mining
Wearable displays
Immersive web
3D printing
Biomimetic Design
Haptics technology
Touchable holograms
Vertical farming (advanced)
Information and Communications Technology (ICT) Infrastructure
Wireless broadband
Cloud computing
Telepresence
Big Data
Machine learning
Ambient / Embedded intelligence – the
‘Internet of Things’
Grid computing
MANETS (Mobile Ad-hoc NETworks)
Swarm intelligence
Intelligent web
Semantic web
Machine vision
Optical computers
Collective intelligence

T-Rays and The VIRTUS Chipset
1.5 - 2 gigabit / sec (~1000 x Bluetooth)
Enabling wireless display, mobile-distributed computing, live HD video
streaming, and real-time interactive multi-user gaming

Mobile Technology Advances are
Enabling Personalised Advertising

Muscle –
Key Survival Capabilities

Speed of Execution
e.g. Ultra-Quick Construction

Research at ‘cutting edge of technological media innovation’ e.g.
human-computer interaction, augmented reality, online gaming,
internet television and semantic text processing
Muscle – Rapid Innovation e.g. Naspers' New Media Lab
(“Fail fast and cheaply” – Koos Bekker, CEO)

Magic – Creating the Wow Factor

Magic – Ideas that Delight
E.g. Virtual Grocery Shopping –
Tesco South Korea

Customer
Centred
Solutions e.g.
Helsinki
Lounge

Message
Impact, Innovation and Ethics

Models for Tomorrow’s
Airport System
• Governing Concept
• Infrastructure
• Revenue Generation
• Financing
• Customer Engagement
• Service Delivery

Conceptual Model - The airport of 2025 will most resemble?
A mini-city, separate from
its local surroundings
An extension of the
local city
A shopping mall with
runways
Bus Stop - A walkway to pass
through security

Infrastructure Models -
Sustainable, Fast Build, Flexible,
Modular and Temporary Terminals

Infrastructure Financing –
Access is Key
‘Usership’ vs. Ownership

Revenue Generation Models
In an increasingly uncertain economic environment with volatile fuel
prices, airports will be under constant pressure to reduce or eliminate
landing charges for airlines and fund themselves through other
commercial income such as retail and leisure.
781 respondents
0%
10%
20%
30%
40%
50%
Strongly
Agree
Agree Slightly
Agree
Slightly
Disagree
DisagreeStrongly
Disagree

Leveraging Customer Insight –
What retail developments would most encourage
you to do your shopping at the airport rather than
elsewhere?
Discount outlet stores Themed retail (e.g.
reflecting local region)
Greater use of discounts,
sales and best price
guarantees

Revenue Models -
the Power of Auctions
£3088 £8791.50 £81

How do you see technology being integrated into your airport
shopping experience?
Multichannel – search
online, try in store, buy via
mobile
Personalized advertisements
and discounts
QR code store windows –
purchase by mobile and
collect on return / home
delivery
Collection on arrival of goods purchased from online-only retailers

All Inclusive
By 2025, to survive commercially, airports will increasingly try to be retail,
dining and leisure destinations in their own right and seek to attract non-
flying customers as well.
783 respondents
0%
5%
10%
15%
20%
25%
30%
35%
40%
Strongly
Agree
Agree Slightly
Agree
Slightly
Disagree
DisagreeStrongly
Disagree

Financing Models
• Ecosystem
• Community
• Public-Private
Partnership
• Securitisation
• Diaspora

Customer Engagement –
Deep Personalization

Service Delivery Model –
Start with Customer Journeys and
Experiences
 Stimulus / Search / Booking
 Transport to and from the
Airport
 Check in to Flight Departure
 Flight Arrival to Airport Exit
 Flight Transfer - Arrival to
Departure
 Airport Experience
 In Flight Experience
 Relationship Management

<Plaza aankomst> <Picture>
Sub
process
KPI
Score
Sub
process
KPI
Score
▪ Traffic
information
▪ Traffic jams
▪ Entering Plaza
▪ Clarity
▪ Off airport flight
information
▪ Services;
rental, parking
▪ Arrival at airport by
car/train
▪ Accessibility
▪ Parking
▪ Price/Quality LT
▪ Departure from
airport by bus/train
▪ Accessibility
▪ Transport from
parking to Plaza
▪ Ease of wayfinding
▪ Retrieving car &
Leaving airport
41%73%
▪ Leaving Plaza
▪ Clarity
91% / 90% 90%
90% / 80%77% 77%
Mapping Customer Journeys &
Experiences

Mindset - 3 Horizon Thinking
• 12 Months
• 1-3 Years
• 4-10+ Years

Mindset – Customer in Control
Social Seating – KLM & Satisfly

Mindset – Uncertainty Tolerant, Experimental,
Curious, Sticky and Magnetic

Management - Make Time and Space for
Change and Tackle Complexity
• Customer Interface
• Process
• Organisation
• Information /
Systems
• Regulatory
• Human

Conclusions
• Huge untapped
potential
• Technology is a key
enabler
• Encourage innovation
and curiosity
• Experiment with
business models
• Work with and for
tomorrow’s passenger

Fast Future –
Core Services
• Live Events - Speeches, briefings and workshops for executive
management and boards of governments, investment funds,
development agencies , companies, airlines, airports, hotels, venues,
CVB’s and associations
• Future Insights - Customised research on emerging trends, future
scenarios, technologies and new markets
• Immersion - ‘Deep dives’ on future trends, market developments,
emerging issues and technology advances
• Strategy - Development of strategies and business plans
• Innovation - Creation of business models and innovation plans
• Engagement - Consultancy and workshop facilitation

Fast Future
• Research, consulting, speaking, leadership
• 5-20 year horizon - focus on ideas, developments, people,
trends and forces shaping the future
• Clients
– ING, ABN Amro, Laing O’Rourke
– Marks and Spencer
– Airports - Aeroports de Paris / Schiphol Group
– Vancouver Airport Services
– Industry Associations – ICCA, ASAE, PCMA, MPI
– Corporates - GE, Nokia, Pepsi, IBM, Intel, Orange,
O2, Siemens, Samsung, GSK, SAPE&Y, KPMG,
Amadeus, Sabre, Travelport, Travelex, ING,
Santander, Barclays, Citibank, DeutscheBank
– Governments - Dubai, Finland, Nigeria, Singapore,
UK, US
– Convention Bureaus – Seoul, Sydney, London, San
Francisco, Toronto, Abu Dhabi, Durban, Athens,
Slovenia, Copenhagen
– Convention Centres – Melbourne,
Adelaide, Qatar, QEIICC
– Hotels - Accor Group, Preferred,
– Intercontinental
– PCO’s - Congrex, Kenes

Hotels 2020 – Objectives
• Identify key drivers of change
for the globally branded hotel
sector over the next decade
• Examine the implications for:
 Hotel strategy
 Brand portfolio
 Business models
 Customer targeting
 Innovation

• Global strategic foresight study to help the meetings industry prepare for
the decade ahead - Industry-wide sponsors
• Multiple outputs Nov 2009 – December 2011
• Current studies on future strategies for venues and destinations
Convention 2020

Rohit Talwar
• Global futurist and founder of Fast Future Research.
• Award winning speaker on future insights and strategic
innovation – addressing leadership audiences in 40 countries on
5 continents
• Author of Designing Your Future
• Profiled by UK’s Independent Newspaper as one of the Top 10
Global Future Thinkers
• Led futures research, scenario planning and strategic
consultancy projects for clients in telecommunications,
technology, pharmaceuticals, banking, travel and tourism,
environment, food and government sectors
• Clients include 3M, BBC, BT, BAe, Bayer, Chloride, DTC De
Beers, DHL, EADS, Electrolux, E&Y, GE, Hoover, Hyundai, IBM,
ING, Intel, KPMG, M&S, Nakheel, Nokia, Nomura, Novartis,
OECD, Orange, Panasonic, Pfizer, PwC, Samsung, Shell,
Siemens, Symbian, Yell , numerous international associations
and governments agencies in the US, UK, Finland, Dubai,
Nigeria, Saudi Arabia and Singapore.
• To receive Fast Future’s newsletters please email

• 50 key trends
• 100 emerging trends
• 10 major patterns of change
• Key challenges and choices for
leaders
• Strategic decision making framework
• Scenarios for 2012
• Key futures tools and techniques
• Published August 2008
• Price £49.95 / €54.95/ $69.95
• Email invoice request to
Designing Your Future
Key Trends, Challenges and Choices

Our Services
Bespoke research; Identification &
Analysis of Future Trends, Drivers &
Shocks
Accelerated Scenario
Planning, Timelining &
Future Mapping
Identification of
Opportunities for
Innovation and Strategic
InvestmentStrategy Creation &
Development of
Implementation
Roadmaps
Design & Facilitation of
Innovation, Incubation
& Venturing
Programmes
Expert Consultations &
Futures Think Tanks
Personal Futuring for
Leaders and Leadership
Teams
Public Speaking, In-
Company Briefings,
Seminars and
Workshops

Example Projects
• Public and private client research e.g. :
– Reinventing the Airport Ecosystem
– Development of Market Scenarios, emerging trends and strategies for key clients
– Government and OECD Scenario Projects – e.g. Migration 2030, Future of Narcotics, Chemical Sector, Family 2030
– Scenarios for the global economy for 2030 and the implications for migration
– Designing Your Future (Published August 2008) – book written for the American Society of Association Executives & The
Center for Association Leadership
– Global Economies – e.g. The Future of China – the Path to 2020
– The Shape of Jobs to Come – Emerging Science and Technology Sectors and Careers
– Winning in India and China
– The Future of Human Resources
– Exploiting the Future Potential of Social Media in UK Small to Medium Enterprises
– Convention 2020 – the Future of Business Events
– Future Convention Cities Initiative – Maximising Long-term Economic Impact of Events
– One Step Beyond – Future trends and challenges for the events industry
– Hotels 2020: Beyond Segmentation – Future Hotel Strategies
– The Future of Travel and Tourism in the Middle East – a Vision to 2020
– Future of Travel and Tourism Investment in Saudi Arabia

Image Sources p. 1
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23 http://www.designboom.com/cms/images/user_submit/2011/07/tescosubwaystore01.jpg
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46 http://blog.apex.aero/prepost-flight/airline-social-seating-system-strikes-fancy/
47 http://3.bp.blogspot.com/_pte2XO66Nwg/SKxbGnqa6DI/AAAAAAAAB2I/g4HX25sx1MQ/s400/magnet%2Bman2.jpg
48 http://2.bp.blogspot.com/-EJhAZaiyA8E/TfRRHfKzDMI/AAAAAAAAAGo/JmTQLz1z0xc/s320/6a00d8341c65c453ef010536d4981b970c-
800wi.jpg
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Redefining the Journey
• A good way to determine what kind of additional services on the ground
passengers would be willing to pay for, is to look at stress levels that air
travellers experience at the various stages of their journey.
• Research by UK retail consultants Pragma shows that as passengers make
their way to the airport, levels of anticipation and excitement rise. However,
so do levels of stress. Anxiety rises during the transfer to the airport and as
a passenger approaches check-in.
• The multiple peaks in stress levels that air travellers perceive during their
journey provide opportunities for airlines and airports to develop value
added services.
• Amadeus suggests “…this could include making airlines travel facilitators for
these customers willing to pay for seamless travel by helping arrange
baggage handling and travel to the airport and hotels. It also could include
more involvement and cooperation with high-speed rail.”
Source: Apex Aero, February 2012
http://blog.apex.aero/inflight-services-2/airlines-airports-find-creative-ways-reduce-passenger-anxiety-generating-fresh-ancillary-revenue-streams/

Moving Towards Integration
• To eliminate the nuisance of hauling luggage to the airport and checking in,
many airlines in the United States have teamed up with a company called
BAGS, a TSA-approved remote skycap service that lets passengers check
bags from their home, office, hotel, convention centre or cruise ship. The
service, which costs USD 20, consists of a document check, weighing and
sealing of the suitcases and their secure transport to the airport.
• In Europe, TAP Portugal has teamed up with Skybags, which lets
passengers check in their bags at home or the office for EUR 25.

Moving Towards Integration
• In Europe, airlines such as Lufthansa and Air France have agreements with
high-speed rail operators (AIRrail and tgvair, respectively) to provide
“intermodal” journeys, which combine air and train travel in one ticket. In this
way, the train effectively works as a feeder service for the airline to its hub
airport.
• Austrian Airlines and Latvian-based airBaltic, meanwhile, have launched
their own branded taxi services in Vienna and Riga, respectively. The
Austrian red|cab service provides Austrian passengers with transfers
between Vienna and Vienna Airport for EUR 29 each way. Austrian red|cab
and BalticTAXI each offer passengers a free daily newspaper, inflight
magazine and a bottle of mineral water.

Personal Assistance
• American Airlines has recently made its Five Star Service, launched four
years ago for celebrities and VIPs, available to the general public. The
service assigns a personal airport assistant to help passengers find ground
transportation, assist at check-in with baggage, and expedite the security
process, among other services, and is available at nine US and five
international airports. American charges USD 125 per person per one-way
flight for the service.
• A similar premium departure and arrival service is offered by Portuguese
airline TAP under the name Personalised Assistance. Prices start at EUR 45
for help with luggage, check-in, security and boarding, and for EUR 140,
passengers are also transferred to and from the aircraft in a limousine.
• De Montfort University’s Woudhuysen summarises, “Travelling can be tiring,
confusing, disjointed and unpleasant. The opportunities to build brand
loyalty – and revenues – by easing the process are still untapped.”

Baggage Service
• Emirates launched its Baggage Delivery Service at Dubai International
Airport’s Terminal 3 in December 2011, meaning customers no longer have
to wait for their baggage on arrival. It is an initiative designed to ensure
comfort and convenience for passengers.
• Strategically positioned immediately after the immigration counters, the
service enhances the passenger experience by enabling the traveller to
have their baggage delivered anywhere in the UAE on arrival at Terminal 3.
Customers are charged AED200 (US$54) for up to four pieces of baggage,
for delivery anywhere within Dubai, Ajman and Sharjah, and AED250
(US$68) for delivery within Abu Dhabi, Al Ain, Fujairah and Ras Al Khaimah.
• An AED10 (US$3) charge is applicable for each additional piece of baggage
delivered to any UAE address. “The Baggage Delivery Service is working
very well, especially for families with children. We are monitoring how it is
performing in Dubai and will roll it out in other cities if we feel it is
appropriate,” commented Antinori.
Source: Future Travel Experience, June 2012 http://www.futuretravelexperience.com/2012/06/emirates-focus-on-baggage-delivery-and-self-service/

On Board Amenities
• Korean Air topped the list for sourcing its own organic farm on Jeju Island
for in-flight meals, and for its “attentive service amenities,” including a
female-only lounge at Incheon Airport, female-only bathrooms on aircraft
and the world’s first onboard duty-free showcase.
• Korean Air's Celestial Bar - there are three onboard bars and cocktails
designed by Absolut Vodka, complete with a full-time bartender.
Source: CNN Go, June 2012 http://www.cnngo.com/explorations/escape/worlds-10-most-innovative-airlines-announced-436301

Buy Before you Fly
• In a new catering program by Austrian Airlines (A Lufthansa Group Carrier),
passengers booking economy class tickets from Vienna will now have the
opportunity to order their in-flight meals from an A-La-Carte menu from DO
& CO. Eligible flights include Long Haul and intra-European flights that
originate in Vienna (except for flights to Prague, Zagreb, Budapest and
Charters).
• For €15, passengers can now select hot or cold dishes that will replace their
normal in-flight meal (For long haul flights, this only replaces your main
warm meal).
• Passengers will now have several choices instead of the “Chicken” versus
“Beef” dilemma that most passengers are often faced with.
• The a-la-carte order can be placed online up to 36 hours before departure
to as late as 1 hour before departure.
Source: Boarding Area, June 2012
http://boardingarea.com/blogs/lufthansaflyer/2012/06/28/a-la-carte-dining-with-austrian-airlines-and-do-co-order-your-meal-before-your-flight/

Building the Brand in the
Terminal
• Virgin Atlantic has outfitted its Clubhouse lounge at Heathrow with a
recording studio (May 2012).
• Virgin had the production suite installed for musicians, who often travel on
its Upper Class flights from London to New York and LA, the airline says.
• The idea is that artists can record tracks while they wait to board their flight
in the airline’s Upper Class lounge, where other distractions for passengers
include a multi screen cinema, spa pool and hair salon.
• The production studio also has facilities for last-minute editing.
Source: TerminalU, June 2012
http://www.terminalu.com/travel-news/virgin-atlantics-recording-studio-at-heathrow-airport-for-the-rich-and-famous/27576/

Maximising the Crew
• Airline crew are one of the most important assets an airline has. Witness
Southwest, who is actively encouraging its employees to make a difference,
and describes them as someone “who dares to make mistakes; dares to be
different; finds a way to utilize people’s special talents; and lives a little on
the edge” (examples include a Southwest pilot who held his plane so a
passenger on his way to a funeral could make it, or the airline’s famous
rapping flight attendant David Holmes).Cathay Pacific
• Airlines such as Cathay Pacific and SAS are also putting their employees in
the spotlight. Cathay’s ‘Meet the Team’ campaign has been running for
some years now – and recently took some hitting- and introduces a dozen
of the airline’s staff through profiles and behind-the-scenes stories in print
ads, YouTube videos, on Facebook, and via an iPad app.SAS
• On a similar not SAS has just introduced ‘The Face of SAS’ on Facebook,
which highlights several of its employees every week as the airline’s
Facebook profile-picture, as well as present themselves and what they do at
SAS.
Source: Airline Trends, November 2011 http://www.airlinetrends.com/2011/11/11/delta-picks-crewsourcing/

Maximising the Crew
• SAS also publishes an annual ‘SAS Crew Guide’, a ‘crew-sourced’
guidebook consisting of recommendations by SAS cabin crew and pilots for
accommodation, shopping, dining, sightseeing and nightlife in many of the
cities served by SAS. The 350-pages guide also contains 13 personal
profiles by individual crew members and their favourite cities and is sold
online for EUR15 (or 4,410 SAS Bonuspoints) as well as in select
bookshops in Scandinavia, the UK and the U.S. The New York section of
the SAS Crew Guide is also available as a free iPhone and Android
app.Delta Picks
• The latest ‘crewsourcing’ initiative comes from Delta Air Lines. As part of its
relaunched Delta Sky Store website, Delta has added a ‘Delta Picks’
shopping list to its retail program offering. The airline has asked its flight
attendants to select their best travel products in the categories luggage and
bags, cameras and electronics, clothing and accessories, as well as golf
and other sports equipment
Source: Airline Trends, November 2011 http://www.airlinetrends.com/2011/11/11/delta-picks-crewsourcing/

Maximising the Crew
• British Airways has begun trialling a new in-flight service where cabin crew
offer passengers local travel information and advice – via an in-flight iPad
app.
• One cabin crew member on select long-haul flights is now doubling as an
‘onboard travel advisor’ – helping passengers with general travel requests.
• The scope of the service includes recommendations on local restaurants,
hotels and best shopping spots, all through BA’s new iPad app.
• The free service is being trialled on nine routes and if successful, British
Airways said it will consider offering the service on more flights this Autumn.
• Air New Zealand has hired its own ‘International Concierge’ team to board
its long-haul flights and share their local knowledge with passengers –
without the use of iPads – before they reach their destination.
• Passengers can ask for advice about onward travel, rental car and hotel
recommendations, best shopping locations and local restaurants to visit, as
examples.
Source: TerminalU, May 2012 http://www.terminalu.com/europe/british-airways-cabin-crew-double-up-as-in-flight-travel-advisors/25856/

Inflight Pop-Up Shop
• Hong Kong-based inflight concessionaire ISG has teamed up with cult
French retailer Colette to launch what it calls “the world’s first inflight pop-up
shop concept” on board All Nippon Airways. The new programme will take
effect from 1 May 2012.
• The inflight ‘pop-up shop’ will feature a collection of exclusive products
brought together under the theme of Paris-Tokyo, incorporating design
elements from the classic Air Mail letter.
• Designs will be exclusive to the project, with limited quantities, and will only
be available while supplies last and for a short time period on board.
• The product range will feature in a special ‘Paris-Tokyo’ section of the ANA
SkyShop magazine.
• It will include co-branded gift products from Colette/ANA suitable for travel
such as headphones, limited edition ladies wallets with design elements
from the Air Mail envelope, and silk scarves with a special logo.
Source: Moodie Report, December 2011 http://www.moodiereport.com/document.php?c_id=40&doc_id=29378

Auctioning Upgrades
• Travellers will soon be able to bid in on-flight auctions to upgrade to business
or first class seats if they are available once they get on their flight.
• Brett Proud, from onboard retail and payment technology company
GuestLogix, said onboard auctions would be the biggest innovation on planes
in the near future.
• One Canadian airline has already adopted the concept and he was working
with two more Chinese airlines.
• "In Canada it seems people will pay double their ticket. People who paid $1000
for their ticket seem to be happy to pay $1000 to move up.
• "The good part for airlines is it's all the money they collect goes straight to the
bottom line because those seats are already empty.
• Mr Proud also said there was strong interest from airlines on broadcasting live
sports on planes, particularly to cater to male business travellers.
• "How much would somebody pay to watch their team or country play a game
live?'' he said.
Source: Courier Mail, April 2012 http://www.news.com.au/travel/news/bid-for-business-class-upgrade-in-auctions-on-plane/story-e6frfq80-
1226392900586?sv=e84ff5b80d1596e13996ba609f07fbd2

Providing Value and Opening
Potential New Revenue Streams
• The most widely deployed iteration of social seating comes from KLM’s
“Meet & Seat” system. Meet & Seat, which lets customers link their social
network profiles (FaceBook, LinkedIn) with the airline’s seat maps, was
recently expanded to KLM’s international destinations to and from
Amsterdam, and has been utilised more than 2,200 times as of June 2012.
• Passengers can share as little or as much information as they see fit. Once
booked on a flight, they can then see who else is participating in Meet &
Seat, and start digging into the shared details on the chance they can find a
compatible seatmate on board. KLM doesn’t make the choice; the
passenger makes the choice.
• The other major player in the social seating game is Satisfly, which recently
launched its service with airBaltic. Satisfly is different than KLM’s Meet &
Seat in that the company does the research and seat selection for each
passenger.
Source: Apex Aero, June 2012 http://blog.apex.aero/prepost-flight/airline-social-seating-system-strikes-fancy/

Providing Value and Opening
Potential New Revenue Streams
• “Satisfly is a sophisticated and user-friendly solution that caters to all
passengers, social and non-social,” says Jim Loperfido, marketing director
of Satisfly. “The ‘intelligent seating’ platform ensures that everyone has the
most compatible seat neighbours.”
• With each flight, Satisfly users can select a ‘flight mood’, such as ‘business
talk’ or ‘relaxation’. In addition to the flight mood, users can fine-tune the
settings for their ‘ideal neighbour’; settings include ‘belongs to your
generation’ and ‘works in the same industry’.
• Pre-launch, Satisfly says that 50 per cent of registered users selected ‘light
chat’ as their mood, 24 per cent want to relax, 20 per cent want ‘business
talk’, and only 6 per cent of users want to spend their time working on a
flight.
• While an airline is ultimately responsible for pricing, Satisfly suggests that
airlines offer the service free-of-charge.
Source: Apex Aero, June 2012 http://blog.apex.aero/prepost-flight/airline-social-seating-system-strikes-fancy/

Outside the Box
• In 2011, ancillary revenue rose to an estimated $32.5 billion worldwide, up
43.8 percent from the estimated $22.6 billion a year earlier, according to the
Amadeus Worldwide Estimate of Ancillary Revenue.
• Airlines must learn from Amazon and “transform themselves from airline
companies to e-tailers” says Raphael Bejar, a revenue specialist at
Airsavings.
• So Air New Zealand, in what airline revenue specialists say is a first for any
airline, has ventured into banking. It is converting its frequent-flier club
members into financial services clients, giving them its OneSmart card. The
card, a debit card, stores cash as well as airline miles and foreign currency.
• “It gives us the opportunity to build a larger revenue channel, the ability to
make money from foreign revenue conversion,” said Simon Pomeroy,
director of loyalty at Air New Zealand. The airline also collects a small
percentage each time the card is used for purchases and charges a monthly
fee if the card is activated but not used.
Source: New York Times, February 2012
http://www.nytimes.com/2012/02/28/business/new-airline-revenue-goes-beyond-baggage-fees.html?_r=1&pagewanted=all?src=tp

Outside the Box
• “We make money off the individual as well as the collective use of the card
every day,” Mr. Pomeroy said, pointing out that the card gives Air New
Zealand a revenue source unaffected by the tyranny of fuel prices. “If fuel
goes up, we’ll still be making money,” he said.
• In the first month after the OneSmart card was introduced in December,
100,000 people opted to activate it, a promising start, said Ben Woolsey,
director of marketing and consumer research for creditcards.com. “I can see
where this could really take off,” he said. “That’s an empowering thing for
the frequent flier to be able to access their miles instead of going online and
transferring it. It’s pretty innovative.”

Outside the Box
• Continental Airlines, which merged with United Airlines in 2011 is also taking
business ideas from the world of finance. A year ago, it began selling
options on ticket prices. The program, FareLock, lets would-be travelers
freeze a ticket price for as many as seven days by paying a small fee which
the airline keeps regardless of whether the customer ultimately makes the
purchase.
• “It’s a value to people like a stock option is a value,” said Jeff Smisek, the
president and chief executive of United Continental Holdings. It lets you buy
stock at a fixed price. Well, this is an option on a seat.”

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