In the context of increasingly stiff competition in air transport, airlines are undertaking a detailed critical review of all their business activities, with the aim of reconciling two imperatives : the quality of passenger service and profitability.

The quality of passenger service

Throughout their entire journey, passengers are aware, directly or indirectly, of every aspect of the service offered to them.

No single element of service can be ignored, since all combine to provide overall satisfaction for your customers.

Customers are less and less likely to make allowances for any constraints under which the airline may operate. Their quality frame of reference grows ever wider.

By driving the process, today’s passenger expects to find on board a choice of entertainment as wide as he can receive on his cable television, and bread as crusty as that which he buys from his local baker.

The growing sophistication in the distribution of duty free products makes it very difficult for an airline company to maintain the level of quality expected by the passenger.

- A cash and carry business is too far removed from the methods, tools and skills in which the airline companies have to be expert.

- Product selection and purchase is no longer a simple procedure. Gone are the days when it was enough to list alcohol, tobacco and perfume. Customers now wish to buy a wider range of duty-free products (watches and clocks, fashion and accessories), all of which require specialist buyers.

In search of profitability

Do in-flight sales programmes generate optimal profitability ?
Although airlines can easily calculate the additional turnover generated by in-flight sales, it is much harder for them to accurately measure the costs. To different degrees, duty-free sales entail numerous services and generate important hidden costs (financial costs and stock-holding risks, shrinkage, financial accounting costs and stock control, consumables…).

- The lack of visibility in terms of profitability makes it difficult to measure the rate of return on heavy investment, which the activity would demand.

- Moreover, airlines tend to allocate their financial resources to their cove-business needs (fleet renewal, GDS). This seldom leaves any resources to invest in what is widely regarded as a non-strategic service provision.

For all these reasons, it is worthwhile to airline companies to work with a specialist partner, having at his disposal investment capacity and a staff of professionals in duty-free distribution, benefiting from wide experience and economies of scale, and guaranteeing income net of hidden costs.