The next opportunity for airlines to increase their sales of
ancillary services lies within the indirect channel, and airlines should incentivize
travel agencies to sell them, according to Sabre CEO Tom Klein.
Speaking during the company’s second-quarter financial
report, Klein was responding to a question on his view of the market share
between GDSs and bookings made directly with airlines.
Tom Klein
Of the approximately $60 billion in ancillary revenue
airlines made last year, Klein said “the large majority,” around 90%, comes
from direct bookings with airlines.
Some of those ancillaries will continue to be sold at the
airport, primarily baggage fees, he said. But opportunity lies within indirect
channels.
“As airlines look at what they’ve done with ancillaries on
their direct site and what they do next, next isn’t necessarily more products
on their direct site,” Klein said. “Next is driving those products through
travel agencies, incenting travel agencies to sell them and pushing them
through indirect channels.”
According to Klein, the technology to enable that is in
place. Currently, he said, most ancillary sales through the indirect channel
are coming from bundles, such as tickets for higher classes that include ancillaries.
“So airlines have to be more savvy about how they push those
offers out,” he said, “but we built that technology to let them do that.”
Sabre reported a 20% revenue increase to $845 million in the
second quarter. Net income grew 37%, to $104 million.