This month we’re pleased to welcome James Edwards to the Upgrade Pack fold. James joins us as Partner Manager for Airlines, bringing our market-first distribution capability to airlines across the globe.
James, tell us a bit about yourself and your role at Upgrade Pack
First of all, as a bona fide aviation enthusiast (or “avgeek” in some circles!), this is my perfect role. I fly as a hobby (currently a vintage JetProvost), and this summer will be flying an L-29 Delfin into the Royal International Air Tattoo, which I’m really looking forward to!
As Partner Manager here I help airlines increase seat utilisation and revenue through our closed marketplace platform for upgrades.
Why do airlines need your help filling seats?
Each day flights take off with seats unoccupied, and each day this costs carriers in lost revenue.
While certain priorities will vary by airline, passenger load factor (basically how full a given flight is) is one number that matters to all airlines.
In 2018 most long-haul flights averaged a load factor of around 80%. For an A380 flying long-haul from Sydney to Los Angeles with 20% of its seats still spare, that seat deficit could, after running costs, see the flight gross just an additional 1.5% in profit – pretty slim pickings don’t you think?
For those airlines competing with low-cost carriers (where cheaper prices at the ‘point of sale’ assist their load factors), the need for them to address this capacity issue is constant.
Even with varied sales channels, unsold seats (particularly in Premium Economy and Business classes) continue to present airlines with a financial headache.
There’s clearly a problem. And this is where Upgrade Pack comes in.
We work with airlines to improve load factors with our exclusive online marketplace, where unsold upgrades are offered at a reduced rate, but one that is still profitable for the airline.
How does it work?
Our proprietary technology connects with our partner airlines’ APIs/booking systems, to connect them with our high net worth members. Our members are premium bank account or credit card customers, who gain access to our platform (delivered as an app) through their provider as a loyalty-based reward for their valued custom. These customers want, and can afford to pay, for an upgrade, but also want one quickly, easily, and for a good price. With the Upgrade Pack app they can dynamically search available upgrades and book one 24/7 in just a few clicks.
Our members (as the users of our app) remain the airline’s customer (through their initial booking). Our platform simply helps airlines reach a ‘captive audience’ of their existing passengers who are prepared to pay for an upgrade, but may not be signed up to the airline member or loyalty bulletins promoting these.
Best of all, this technology costs our airline partners nothing! The platform is funded by our clients (banks, credit card companies and employers) through a subscription model as part of their loyalty and reward spend.
Is there a customer demand?
Luxury travel is a high-perceived value experience. In an airport study we conducted last year 95% of people told us the thing that they valued most when travelling was an upgrade. However, for many travellers the cost of purchasing a flight upgrade outright is cost prohibitive. The ability to make dynamic offers available to those who are actively seeking and prepared to pay for an upgrade, but also want a good deal, makes this experience much more accessible. We also know that travel-related benefits are something that 55% of people look for in a paid for credit card.
Furthermore, customers, particularly wealthier ones, are increasingly seeking experience-led rewards and investing in experiences over simply buying ‘things’.
Many airlines are investing in their Premium offerings. Would they do this if they couldn’t sell the seats?
Many airlines are improving premium seating, but it’s largely those travelling on business who will occupy them, certainly on busier hub routes Monday to Friday. But on many popular leisure routes, premium cabins are more likely to be under-occupied.
By connecting airlines with leisure travellers, some of whom may actually fly Business with a given airline during the week (on corporate spend), but will fly Economy themselves – we present a genuine opportunity to attract new custom and revenue.
How does it work with airlines’ own loyalty schemes?
Upgrade Pack co-exists with airlines’ own loyalty/points redemption programs. Our users pay for their upgrade using the card of their participating financial provider, so we do not conflict with those who want to redeem points.
Where people aren’t members of airline loyalty schemes – or where points might not be redeemable – Upgrade Pack offers an accessible route to an upgrade that might otherwise not be purchased.
Are there any other benefits?
Our closed environment gives our partners assurance from access to a desirable and engaged user group, where pricing is still controlled by them, protecting brand equity and perception.
Furthermore, once our user has successfully upgraded, their original seat is then available for the airline to resell. Depending on the upgrade taken (e.g Economy up to Premium Economy or Premium Economy up to Business) we help airlines attract additional revenue in each section of the aircraft.
I’m really excited by what Upgrade Pack, as a tech disruptor, has created for air travel. I’m looking forward to showcasing our platform as an additional and attractive distribution mechanism, that can greatly assist load rates, enabling our partners to focus on running their airlines.
Want to find out more about how we work with airlines? Feel free to connect with me on LinkedIn: https://www.linkedin.com/in/edwardsjm/