UATP Airline Distribution: Payment flexibility equals more revenue and reduced costs

Airlines that offer a range of payments are not only able to increase revenue from ancillary sales but also reduce costs, a panel of experts told delegates at last week’s UATP Airline Distribution conference.

Virgin Atlantic senior manager of payments for Virgin Atlantic, Keli Sanderman, said while it can be “expensive and cumbersome”  to add new payment types.

But she her division at the carrier sits within the commercial team and is tasked with improving conversions and opening up new markets as well as managing costs.

“We really look at return on investment. In the end things that I think would be great to have just do not make the cut. We have to have revenue behind it.”

Jap Popat, payments product manager at low cost carrier easyJet, said it uses payment to encourage certain behaviours from its customers.

This includes removing barriers to upgrading from seat-only bookers by adding ancillaries like car hire, seat selection and baggage, and booking earlier.

“It’s about how we leverage payments as a service to drive behaviours from our customers,” he said.

“It’s a real game changer in customer experience and a real revenue driver. One of my responsibilities is to remove those challenges.”

Buy Now Pay Later (BNPL) specialist Klarna identified travel and aviation as a key vertical a number of years ago, Tim Foster, the firm’s new business lead said.

He said the platform can help airlines generate new customers from among its 180 million users and sees 27% increase in average order value over conventional card payments.

“We can offer customers choice. They can pay now, pay later, even choose financing for longer term bookings. It’s about offering customer the choice of how they wish to pay.”

UK start-up Hands In announced a partnership with UATP to make its split payments platform available on the network.

Co-founder and chief executive Samuel Flynn claimed average order values for multi-card payments are five times that of single card transactions.

“We really wanted to disrupt the way group bookings were done in particular in the travel sector but specifically with airlines.”

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