European low-cost airline Wizz Air recently announced the launch of an innovative online shopping platform called Wizz Shop&Fly, offering passengers a personalized shopping experience.

In collaboration with online shopping startup InterLnkd, which uses artificial intelligence, this platform allows customers to discover a variety of fashion, beauty and retail brands and make purchases that are delivered directly to their homes.

This initiative marks a significant step for Wizz Air. For online shopping startup InterLnkd, this partnership opens up access to a new customer demographic as Wizz Air carries millions of passengers across Europe and beyond every month.

The platform, provided by InterLnkd, uses an AI solution system to analyze customers' shopping habits and their travel destinations with Wizz Air and offer personalized products. For example, passengers can see beachwear advertisements when flying to the south of France and discover unique items and prices they might not have found otherwise.

For Wizz Air, this platform could prove to be a lucrative opportunity to generate additional revenue streams. The sale of food, drinks and in-flight shop products is very important for low-cost airlines. According to industry data, sales of additional services often represent a significant portion of revenue. Some low-cost airlines, such as Ryanair, have even developed specific strategies to maximize revenue from the in-flight experience, including selling lottery tickets on board some flights.

Additional income plays a big role

The exact figures for revenue from the sale of food, beverages and in-flight shop goods vary depending on the airline and their respective business practices. Unfortunately, there are no consistent statistics that capture this revenue for all airlines worldwide. However, one can look at some estimates and examples to get an insight into the magnitude of this additional income.

Some estimates could be made for 2023 based on reports and data from airlines and industry analysts. It is important to note that these estimates are based on assumptions and available data and are therefore subject to uncertainty.

• Ryanair: The low-coster is known for generating a significant portion of its income from the sale of food, drinks and on-board shop products. For 2023, Ryanair's revenue from in-flight sales could have been estimated at between 2 and 3 billion euros.
• Lufthansa Group: For network carriers such as Lufthansa Group, which offer a wider range of services and a larger selection of flight classes, revenue from in-flight sales could be lower. For 2023, the Lufthansa Group's revenue from the sale of food, drinks and in-flight shop goods could have been between 500 million and 1 billion euros.

In general, it is common for low-cost airlines such as Ryanair to generate a larger proportion of their revenue from the sale of additional services, including food, drinks and in-flight shop products. This is because they often offer lower ticket prices and try to increase their profitability by selling additional services.

To increase this additional revenue, airlines take various measures:

• Better product selection: Airlines often expand their product range and offer a wider selection of food, beverage and in-flight shop products to meet the needs of a variety of passengers.
• Marketing and advertisement: Airlines invest in marketing and advertising campaigns to encourage passengers to purchase products on board. This may include placing advertising in in-flight magazines, on screens and through targeted email campaigns.
• Online sales: Some airlines offer the opportunity to order food, drinks and in-flight shop products online before the flight. This makes purchasing easier for passengers and can increase sales.
• Product improvements: Airlines continually improve their product selection and the quality of the food, beverages and in-flight shop products offered to increase customer satisfaction and increase revenue.

Not all airlines sell above the clouds

Overall, the additional revenue from the sale of food, drinks and in-flight shop products plays an important role in the profitability of airlines, especially low-cost airlines. Therefore, they employ various strategies to increase this revenue and improve the customer experience.

The decision of some airlines not to have an on-board shop can have various reasons. One reason could be that they are focusing on other revenue streams or that the in-flight shop concept does not fit the airline's brand identity or business model. Some airlines may also not offer in-flight shops to reduce operating costs or to focus on selling seat reservations, baggage fees or other services that may be more profitable.