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Limited future for airlines as tour operators

A rush by airlines to offer accommodation and car hire will bring limited revenue and carriers would do better to focus on flight-related sales, according to a senior Amadeus executive.

 

Amadeus group vice-president Gillian Gibson told the Travolution Summit there was little future for carriers in acting as tour operators or travel agents. “The revenue from third-party sales seems significant, but with hotels or care hire it is only the commission going to the carrier’s bottom line,” she said.   Gibson quoted figures released by Iberia subsidiary Clickair revealing third-party sales – such as travel insurance, car hire and accommodation - comprise just 18% of ancillary revenue, the rest being flight related.   Flight-related charges on low-cost carriers increasingly extend from charging for onboard drinks and snacks to fees for baggage and airport check in – a model now being picked up by former full-service airline