A review of ancillary services in the airline industry

Liu, Honglin; Abdullah, Nawal Hanim Binti; Lee, Shin Yiing Article A review of ancillary services in the airline industry Cogent Business & Management Provided in Cooperation with: Taylor & Francis Group Suggested Citation: Liu, Honglin; Abdullah, Nawal Hanim Binti; Lee, Shin Yiing (2024) : A review of ancillary services in the airline industry, Cogent Business & Management, ISSN 2331-1975, Taylor & Francis, Abingdon, Vol. 11, Iss. 1, pp. 1-14, https://doi.org/10.1080/23311975.2024.2322018 This Version is available at: https://hdl.handle.net/10419/326118 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by/4.0/ Cogent Business & Management ISSN: 2331-1975 (Online) Journal homepage: www.tandfonline.com/journals/oabm20 A review of ancillary services in the airline industry Honglin Liu, Nawal Hanim Binti Abdullah & Shin Yiing Lee To cite this article: Honglin Liu, Nawal Hanim Binti Abdullah & Shin Yiing Lee (2024) A review of ancillary services in the airline industry, Cogent Business & Management, 11:1, 2322018, DOI: 10.1080/23311975.2024.2322018 To link to this article: https://doi.org/10.1080/23311975.2024.2322018 © 2024 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group Published online: 11 Mar 2024. Submit your article to this journal Article views: 8362 View related articles View Crossmark data Citing articles: 3 View citing articles Full Terms & Conditions of access and use can be found at https://www.tandfonline.com/action/journalInformation?journalCode=oabm20 Cogent Business & ManageMent 2024, VoL. 11, no. 1, 2322018 A review of ancillary services in the airline industry Honglin Liu, Nawal Hanim Binti Abdullah and Shin Yiing Lee school of Business and economics, universiti Putra Malaysia, selangor, Malaysia ABSTRACT The significance of ancillary services within the airline industry is progressively gaining prominence. As such, research on airlines’ ancillary services has continuously grown. The primary objective of this research article is to provide a review of ancillary services on passengers’ willingness to pay and the personalized pricing within the airline industry, achieved through the analysis of published scholarly works. The examination of published papers has been conducted with diverse criteria, including research methodologies, analytical perspectives, statistical methodologies, thematic coverage, technological dimensions, authorship, and geographical origins. The conclusions suggest a promising future regarding both airlines’ ancillary service applications and research in this area. The most crucial limitation stems from selecting works subject to examination as the analysis dealt with willingness to purchase and personalisation pricing field papers. Additionally, the selected region has not been widely covered. Nonetheless, this article can potentially be valuable for researchers and airline managers as it sheds light on emerging trends within both domains. These trends pertain not only to evolving technologies themselves but also to the novel applications thereof. 1. Introduction The aviation sector stands as a pivotal global enterprise, facilitating essential linkages among individuals and societies across the globe. With its expansive reach spanning continents, it enhances the efficacy of travel processes, thereby fostering greater efficiency in global mobility. However, the aviation sector is unable to overcome its low profitability (Ozmec-Ban et al., 2022; Song & Lee, 2020) despite playing a significant role in the advancement of the world economy. This phenomenon is precipitated by several intertwined factors, such as diminished revenue yields from ticket sales, intensified competition regarding base fares, the ‘unbundling’ approach espoused by low-cost carriers (LCCs), and the prevalence of online fare comparison websites (O’Connell, 2011). Therefore, finding new sources of revenue growth for carriers is becoming increasingly important. Despite these challenges, encouraging indications surfaced in the United States in 2015 (Song & Lee, 2020). Warnock-Smith et al. (2017) ascribed the enhanced financial efficacy to supplementary revenues due to their observation of a positive correlation between the operating margins of carriers and the share of their overall revenue generated by ancillary sales. Ancillary revenues, denoted as “non-ticket revenues” (Wittmer etal., 2012), have progressively become the fastest growing revenue category (Centre for Asian Pacific Aviation (CAPA), 2014). On a global scale, airline ancillary revenues experienced a significant surge from $2.5 billion in 2007 to $38.1 billion in 2014. Implementing new service fees can potentially amplify revenues while simultaneously curbing costs. For instance, the imposition of checked baggage fees can reduce the volume of held luggage, thereby attenuating the associated handling fees that the airline must bear (de Wit & Zuidberg, 2012). Waguespack and Rhoades (2014) highlighted the burgeoning importance of baggage fees for American airlines, noting the dramatic increase in baggage fee revenue from 2007 to 2012. To illustrate, during these five years, Delta Airlines and U.S. Airways saw © 2024 the author(s). Published by informa uK Limited, trading as taylor & Francis group CONTACT nawal Hanim Binti abdullah [email protected].my school of Business and economics, universiti Putra Malaysia, 43400 selangor, Malaysia. https://doi.org/10.1080/23311975.2024.2322018 this is an open access article distributed under the terms of the Creative Commons attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. the terms on which this article has been published allow the posting of the accepted Manuscript in a repository by the author(s) or with their consent. ARTICLE HISTORY Received 21 November 2023 Revised 14 February 2024 Accepted 16 February 2024 REVIEWING EDITOR Kaouther Kooli; Bournemouth University; United Kingdom of Great Britain and Northern Ireland KEYWORDS Ancillary service; airlines willingness to pay; pricing strategy; unbundling; ancillary revenue SUBJECTS Marketing; Management and Transport; Service Operations Management; Aerospace & Air Transport Industries MARKETING | REVIEW ARTICLE 2 H. LIU ETAL. a rise in revenue from baggage fees by 796 and 1760%, respectively. Ancillary revenues have become integral to airline accounts following the tremendous growth during the past few years (O’Connell & Warnock-Smith, 2013). In the previous decade, airlines have substantially enhanced their ancillary revenues by adopting two key strategies: ‘unbundling’ and introducing innovative products (Ceregeiro, 2021; Materna & Tomová, 2016; Silva de Mattos et al., 2022). The term ‘unbundling’ denotes separately charging for products or services traditionally included in the base airfare, such as checked baggage (Avram, 2017; Waguespack, 2018). Notably, baggage-related fees increased fivefold between 2007 and 2010, as major American network carriers began imposing charges on domestic travellers for the first and second checked bags (DOT, 2016). These baggage fees currently contribute more than $1 billion annually to American Airlines alone, constituting approximately 2 to 4% of ticket revenue for major American network carriers. In aggregate, ancillary revenues have experienced a threefold increase over the past decade, surging from 3 to 8% of the total revenue (Stalnaker etal., 2016). Airlines consistently strive to maximise the potential revenue from existing sources (Abdella et al., 2019; Bozogáň & Hurná, 2020; Klislinar & Wachidin Widjaja, 2020; Parise, 2018; Serrano & Kazda, 2020) and cultivate new revenue streams through further unbundling - resulting in the development of new products and services (Cui et al., 2018; Rouncivell etal., 2018; Shugan etal., 2017). The pricing of ancillary services necessitates a delicate balancing act, optimising the potential for revenue increase without causing a detrimental decline in base ticket sales (Silling, 2019; Zhao et al., 2021). A prevailing trend in the airline industry involves obfuscating ancillary revenue increases within increasingly complex products or offering these novel ancillary products free of charge to preferred or elite customers (Bachwich & Wittman, 2017; Garrow et al., 2012). Although ancillary revenue plays a pivotal role in modern airline operations, it is a novel revenue stream (Bockelie & Belobaba, 2017; Boin et al., 2017; Kosonen, 2020; Zhao et al., 2021). Hence, gaining deeper insights into the consumers’ willingness to pay on ancillary services and the formulation of pricing strategies by airline companies holds considerable significance for the sustained advancement of the broader aviation sector. The primary aim of this article is to conduct a comprehensive literature review on integrating airline ancillary services, with a specific emphasis on publications about the willingness to pay (WTP) for such services and personalised pricing strategies for ancillary offerings. To achieve this objective, an extensive bibliographic analysis was undertaken to identify, categorize, discern, evaluate, and systematically present relevant scientific papers sourced from notable publications. Through this systematic literature review, the article sheds light on the contemporary trends, insights, and developments surrounding incorporating ancillary services in the airline industry’s pricing strategies. The present article is organised as follows: Section 1 introduces the context and motivation behind the investigation of ancillary services within the framework. Subsequently, Section 2 offers a comprehensive framework for classifying ancillary services, accompanied by an analysis of the prevailing trends in their implementation, presenting a detailed exposition of ancillary services’ development status in the aviation industry. Section 3 introduces methodology applied in this article. In pursuit of a comprehensive understanding, Section 4 thoroughly examines seminal studies concerning WTP assessments for ancillary services, the dynamic pricing strategies for these services, and the incorporation of personalized concepts. Each of these themes is scrutinized independently to discern their relevance and significance within the context of ancillary service management. Finally, Section 5 culminates the review by succinctly summarising the key findings derived from the sections. Drawing upon these findings, this section also offers valuable recommendations for future research endeavours to fill gaps and extend the knowledge of ancillary services. Through this academic endeavour, the article aspires to contribute to the broader discourse surrounding ancillary service optimisation and enhancing ancillary service revenue practices in the aviation industry. 2.Theoretical framework 2.1 Ancillary service The term "ancillary," as defined, denotes something that is "secondary or supplementary" (Grönroos, 2007). In the context of airline services, a service is an adjunct to the core business service, typically COGENT BUSINESS & MANAGEMENT 3 included in the base fare (Bozogáň & Hurná, 2020). The aviation industry’s core service revolves around transporting passengers from their departure point to their intended destination (Avram, 2017; Bozogáň & Hurná, 2020; Tsafarakis et al., 2018). Ancillary services encompass offerings beyond this fundamental transportation service, comprising preferred seating, booking enhancements, priority boarding, and food and beverage options (Morosan, 2014). These supplementary elements are often considered the foundational components of the overall service package, defining and rendering it competitive (Bozogáň & Hurná, 2020). Furthermore, these additional services constitute the principal sources of ancillary fees or revenue, a phenomenon underscored by Garrow et al. (2012) through their analysis of product defunding trends. In summary, airline ancillary services enhance the customer experience by offering a personalised touch and concurrently contribute to airlines’ augmented revenue streams. In economic terms, and as outlined in the literature, airline ancillary services are akin to add-on products (Bockelie & Belobaba, 2017). These optional services and products only add value when purchased with a primary product (Lal & Matutes, 1994). They are supplementary offerings tied to airlines’ core business services (Bozogáň & Hurná, 2020). For instance, an optional bag check service only adds value to a passenger if purchased along with a leading service, such as an air ticket. Various definitions of airline ancillary service revenue have been proposed. According to Holloway (2008), ancillary service fees can be seen as separating various components of the traditional airline product and imposing charges for features formerly bundled in the ticket price or limited to passengers in premium cabins. Vasigh etal. (2012) posit that ancillary revenue refers to the income generated by an airline through non-ticket sources, which serve to enhance the airline’s services or product offerings, such as luggage fees or onboard services. According to the definition from IdeaWorks Company, ancillary revenues are the additional revenue generated beyond the primary ticket sales. These profits can be obtained from direct sales to passengers and indirectly from the overall travel experience or third-party engagement. The fees are only accrued when passengers choose to use the service. 2.2 Types of ancillary service To understand ancillary services comprehensively, it is imperative to establish a clear definition and elucidate their operational mechanisms (Bozogáň & Hurná, 2020). Among the earliest forms of ancillary revenue generation is the sale of duty-free products during flights, which, for decades, represented the sole means through which airlines could augment their revenues from passengers while in-flight (O’Connell & Williams, 2011). Beyond duty-free product sales, another example of ancillary services includes what is commonly referred to as penalties, such as fees for excess baggage, flight cancellations, or flight changes (Ozmec-Ban et al., 2022). The classification of ancillary services has prompted differing opinions among various studies. The Amadeus Yearbook of Ancillary Revenues (2011), which is widely used by experts in the aviation sector, delineated four distinct classifications of ancillary services prevalent in the industry: (1) The term "a la carte" refers to additional services offered during a trip that requires a separate payment. These services may include onboard food and beverage options, checked-in bags, assigned seats, priority check-in, access to airport lounges, onboard entertainment, or Internet access. (2) The commission-based approach involves cross-selling endeavours, such as offering hotel accommodations, travel insurance, and car rental services. (3) The frequent flyers program allows companies to obtain airline miles that can be used for marketing initiatives, promotional campaigns, or loyalty-based marketing strategies. (4) Advertising generates revenue through various channels, including the inflight magazine and outdoor and indoor advertising spaces within aircraft, airline lounges, and airports. These classifications serve as valuable frameworks for understanding the multifaceted landscape of ancillary services in the aviation industry. However, some scholars propose that ancillary services generate revenues through two unique practices: the dismantling of the fare mechanism, which enables the carrier to charge for each flight product, and the cross-selling of third-party travel by-products through Bolton hyperlinks from an airline’s website (O’Connell, 2011). Figure 1 divides the flight products into three distinct categories; except for the core products, all the rest are ancillary service products, commonly regarded as the components of the service package that delineate and enhance its competitiveness (Zhou et al., 2020). 4 H. LIU ETAL. A cadre of researchers has critically evaluated the shift towards the unbundling of aviation ancillary products in the American airline industry and has put forth a typology that segregates these services into three key categories, organised chronologically or historically. First, the "most established fees" category comprises charges that have existed since the era preceding deregulation and the rise of low-cost carriers, including fees for services such as ticket exchange, the accommodation of pets on board, and provisions for unaccompanied minors. The second category, "fees for services that used to be free," includes services that were initially offered free of cost but, in the wake of unbundling, are now chargeable. This category includes luggage check-in, in-flight meals, and seat selection. Lastly, the third category, "fees on newly introduced services," pertains to fees associated with introducing previously unavailable services and for which consumer demand might be somewhat restricted, such as premium dinners and onboard Wi-Fi (Garrow etal., 2012). Furthermore, some researchers have proposed a division of supplementary incomes into two separate categories: a la carte ancillaries, which include individual items that are not grouped, as well as punitive charges and third-party ancillary streams. The latter includes revenues sourced through commission-based incentives, frequent flyer programs, and advertising (Warnock-Smith et al., 2017). IdeaWorks Company offered a more nuanced definition of ancillary revenue, categorised into a la carte features, commission-based products, frequent flier activities, advertising facilitated by the airline, and the a la carte components linked to a fare or product bundle. The details are shown in Table 1. Moreover, it has been argued by certain scholars that these services could have a direct connection to the flight itself, encompassing aspects like baggage handling, seating upgrades, or meal options. Alternatively, these services may be integrated into the passenger’s broader travel arrangements, which could involve booking hotel accommodations, rental cars, or engaging in destination activities. Additionally, these services may be seen as a component of the passenger’s ongoing association with the airline, such as using a co-branded credit card (Bockelie & Belobaba, 2017), as shown in Table 2. 2.3 Global evolution of ancillary services The inception of ancillary services within the aviation industry can be traced back to the 1940s and 50s when airlines initiated the provision of basic in-flight amenities such as meals, beverages, and blankets. These amenities were initially included in the ticket price to enrich the customer’s travel experience (Garrow etal., 2012). With the growth of the airline industry and intensifying competition, airlines began to offer more luxurious amenities, such as live T.V. and personal movie selections, as a method of differentiation (Garrow etal., 2012). The deregulation of the American airline market in the late 1970s was a turning point in the evolution of ancillary services. This deregulation gave airlines more latitude in establishing fares and routes, Figure 1. Map of core airline products (non-revenue) and revenue-producing products (source: o’Connell). COGENT BUSINESS & MANAGEMENT 5 fostering increased competition and price wars (Garrow et al., 2012). Consequently, airlines explored diversifying revenue streams, reducing reliance on ticket sales. In contradistinction to the approach, low-cost airlines adopted an unbundling strategy, allowing passengers to select ancillary services based on their preferences and requirements (Ozmec-Ban et al., 2022). By unbundling services, these airlines allow customers to tailor their travel experience, opting for specific amenities or extras as desired and tailoring their overall travel costs accordingly. The rise of low-cost carriers (LCCs) like Southwest Airlines in America and Ryanair in Europe in the 1990s was instrumental in advancing the acceptance of ancillary services as additional revenue sources. These carriers adopted a business model focusing on operational cost minimisation and a la carte services at an additional fee (de Wit & Zuidberg, 2012). This service unbundling enabled LCCs to offer lower base fares, attracting price-sensitive travellers (Bozogáň & Hurná, 2020; de Wit & Zuidberg, 2012). Low-cost airlines employ various strategies, ranging from price mechanisms to extensive promotional efforts, to reduce ticket prices and attract customer interest. Consequently, LCCs are keen on offering ancillary products and services that directly engage passengers. These may include seat selection, baggage services, priority passes, food and beverage choices, and in-flight entertainment (Worasuwannarak, 2023). The emergence of low-cost carriers (LCCs) has transformed the competitive landscape within liberalized markets (O’Connell & Williams, 2005). This development has revolutionized the conventional business model of airlines, significantly impacting the provision of ancillary services across the aviation industry. Traditional airlines have adopted the practice of charging for supplementary services, mirroring the strategies employed by low-cost carriers (Babić et al., 2019). The proliferation of charged in-flight services among traditional carriers exemplifies the ongoing process of hybridization, indicative of a gradual transition towards a hybrid business model (Tomová & Materna, 2017). At the same time the traditional low-cost business model has progressively changed and LCC carriers have moved on both sides of the spectrum. On the one hand, this has led to the emergence of the Table 1. Definition of ancillary revenue. Categories Definition activities a la Carte Features these are the things on the ancillary revenue menu. they are the extras that customers can add to their flight experience. 1) selling food and drinks on board. 2) Carrying bags and extra luggage. 3) Being given seats or better seats within the same cabin. 4) Being able to make reservations over the phone. 5) Having to pay extra for credit card payments. 6) Check-in and checking first. 7) the pros of early boarding 8) entertainment equipment on board. 9) access to the internet wirelessly. Commission-Based Products the commission-based category is primarily earned by airlines on sales of third-party products 1) Hotel accommodations. 2) Car rentals. 3) travel insurance. 4) Duty-free and consumer products onboard aircraft. Frequent Flier Programs Frequent flyer miles and points are sold to program partners. the selling of miles or points to partners in the program, such as car rental and hotel chains, co-branded credit cards, internet shopping malls, stores, and communication services. advertising sold by the airline this is a new area for any advertising related to passenger travel. 1) the money made from the magazine in airtime. 2) advertisements sold on or in planes, landing docks, gate areas, and airport lounges. 3) Market goods and samples can be placed for a fee. Fare or Product Bundle airlines may allocate a portion of the price associated with an economy class bundle or product bundle as ancillary revenue. Checked baggage, early boarding, and extra legroom for seating. Table 2. ancillary service categorization. itinerary trip Relationship Baggage Hotels Loyalty seating Rental cars Co-branded credit card Meals Destination activities subscription clubs Priority boarding Lounge access 6 H. LIU ETAL. ultra-low-cost business model (ULCC), in which carriers charge for all aspects of travel other than airfares, by adopting lower costs than low-cost carriers while generating ancillary revenues through aggressive fare splitting (Bachwich & Wittman, 2017). On the other hand, some carriers have begun a ‘hybridization’ process, offering services traditionally provided by full-service carriers (FSCs) therefore hybridizing their business models (Chiambaretto & Combe, 2023; Corbo, 2017; Morlotti et al., 2020). For instance, hybridized low-cost airlines compensate customers for higher ticket prices by offering additional airport or other ancillary services (Tomová & Materna, 2017). Presently, the rise of hybrid models diminishes the stark contrasts between LCCs and FSCs (Morlotti et al., 2020). This transformative shift also expands the potential for the evolution of airline ancillary services. Digital technology and e-commerce facilitated the proliferation of airline ancillary services. Online booking platforms and mobile applications have empowered airlines to offer personalised ancillary services through targeted offers and dynamic pricing, acknowledging the Internet’s role as a revenue generator (O’Connell & Warnock-Smith, 2013). Additionally, digital channels have allowed airlines to gather valuable customer data, tailoring ancillary services according to individual preferences and travel habits. The airline ancillary services market currently features various products and services catering to diverse customer segments and preferences. Furthermore, the ascension of ancillary services has stimulated the creation of novel business models and partnerships within the airline industry. For instance, airlines are increasingly partnering with hotels, car rental companies, and other travel service providers to offer comprehensive packages and one-stop travel solutions, improving the overall customer experience and generating additional revenue (Tiernan et al., 2021). As the industry progresses, the range and complexity of ancillary services are expected to expand further, driven by technological advances, shifting customer preferences, and the perpetual quest for competitive differentiation and revenue diversification. 3. Methodology The search process involved the utilisation of pertinent keywords directly related to the addressed problem in the article, such as “airlines,” "airlines ancillaries," "airlines add-ons," "transport service," "transportation," and "pricing," among others. The chosen temporal scope for the study encompassed the preceding eight years. This decision was primarily based on the recognition that airlines commenced offering a diverse range of ancillary services only recently, rendering the past eight years a crucial period for understanding the evolution and impact of these services within the aviation industry. To ensure a comprehensive and rigorous analysis, databases such as Web of Science and Scopus were used, enabling the selection of relevant subject areas closely aligned with the research topic. Initially, 120 research papers were accessed, and subsequent screening identified 64 papers deemed germane to the study’s parameters over a span of ten years. The selection criteria were applied to ensure congruence with the research topic and objectives. The organization of the retrieved articles involved a multifaceted approach incorporating various criteria such as authorship, data collection method, type of ancillary services, region or airline, influencing factors and findings. This systematic organization facilitated a comprehensive examination of the literature, facilitating the identification of key themes, trends, and research lacunae within the domain of ancillary services in the airline industry. 4. Review of existing literature The reviewed studies are systematically classified into two distinct research categories, each about a specific aspect of ancillary services in the airline industry: (1) WTP for ancillaries and (2) personalised ancillaries pricing. Table 3 and Table 4 present a summary of studies on the WTP for ancillary services and pricing strategies, respectively, encompassing key details such as the author(s), data collection methodology, types of ancillary services investigated, regions or airlines under study, antecedents or attributes considered, as well as the noteworthy findings derived from each respective research paper. COGENT BUSINESS & MANAGEMENT 7 Table 3. Reviewing studies on the willingness to pay for ancillary services. author Data collection ancillary service Region/airlines antecedents/attributes Findings o’Connell and Warnocksmith (2013) interview; online survey via WebFlyer’s forum Commission-based products (i.e., accommodation and car rental) and unbundled products (i.e., extra legroom and priority boarding). Mainline carriers & LCC none airport parking and checked baggage were the most popular commission-based and unbundled airline products. Warnock-smith et al. (2017) targeted online survey via the "Questionpro" website inflight food, beverages, entertainment, seating, priority boarding, etc. FsC/LCC/ Charter Carrier type (FsC/LCC/ Charter), length of flight (long and short haul) and journey purpose (business, leisure, VFR) Passengers value essential products or services like food, drink, baggage, and seat assignment, and WtP for specific ancillary services varies based on carrier type, flight duration, and trip purpose. shaw et al. (2021) interview; survey Commission-based products (accommodation, car rental, travel insurance and destination services, among others) shannon airport in ireland travellers’ age, flight length (i.e., short or long-haul), and frequent flyer status. Car rental, airport parking, and hotel sales impact WtP most, and specific offers increase the likelihood of purchasing. Ren et al. (2022) online survey seat selection China Flight purpose, number of luggage carried, situation of the accompanying person, flight time, and flight duration Passenger seat preferences fall into three categories, unaffected by personal characteristics like gender and age but influenced by flight details like purpose, duration, luggage, companions, and preferred seat. scotti and Dresner (2015) experiments Baggage u.s./southwest airlines and nine other airlines from america Population and income at endpoint cities on a route, airfare and baggage fee, tourist route or multiple airports at origin/ destination, time and airline-specific dummy variables a system of simultaneous equations was estimated. Chiambaretto (2021) online survey Checked baggage, inflight meals, seat selection, priority boarding, and onboard Wi-Fi –trip motive, age, shortand long-haul Leisure passengers are more willing to pay for ancillary services than business travellers, and there are no apparent differences in WtP for age. Flight duration has a mixed impact on WtP for ancillary services. song and Lee (2020) online survey easy packaging of flights, hotels, car rentals, and tourist experiences with real-time dynamic inventory and pricing Korean gender, age, annual income, occupation, purpose of travel, Frequency and destination the most popular commission-based ancillaries for Korean travellers are airport transfers, currency exchange, and travel insurance. Female travellers, 20-somethings, and frequent travellers are likelier to buy these on airline websites. Hugon-Duprat and o’Connell (2015) a simulation model Premium economy class Virgin atlantic Long-haul the rationale for implementing a premium economy seat is justified. Rouncivell et al. (2018) online survey seat selection united Kingdom age, previously paid a seat selection fee, member of a frequent flyer program, business and non-business travel accepting preferred seats is negatively correlated with ticket price sensitivity but positively correlated with airline reputation and flight time convenience for non-business travel. Past seat selection product purchases strongly predict future business and non-business travel spending. 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