February 18, 2020

Premium inventory: the distribution opportunity

Craig Unsworth

This week Skift explored moves by two Asian airlines to upgrade their Business Class offerings with new 'premium' Business products - essentially offering better seats and service to customers who pay more.

The creation of new Business ‘plus’ classifications by Malaysia Airlines and China Eastern is consistent with the greater personalisation that we have already seen in Economy – where fare structures now reflect a range of preferences or requirements that travellers who are still value-minded can secure, at additional cost.

Creating more buying options within Business presents a similar revenue opportunity through increased customer choice and dynamic packages.

At the same time, many airlines are investing heavily in their Premium Economy capacity, giving customers increased access to more types of premium inventory  – from basic premium packages to the highly customisable (as Malaysia Airlines and China Eastern’s elevated Business Class products are both pitched to be).

All this activity clearly indicates a rise in customer demand. However, flights will still take off each day with seats in premium categories unoccupied, (especially in low season and on predominately-leisure routes).

Consequently airlines will continue to face the challenge, and cost, of distressed premium inventory.

With more premium inventory available, airlines could consider options for more controlled distribution of their unsold seats. Our closed marketplace app offers airlines a unique distribution tool - connecting them directly with our users (members of premium rewards programs who want to purchase an upgrade) as a desirable customer base.

The result is airlines selling seats for revenue rather than making a loss, and a great deal for our users.

For more information about being an airline partner of Upgrade Pack, please email: partners@upgradepack.com

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