Hitting at the red

India's airline companies join their global counterparts in the search for non-ticket revenues.

India's airline companies have hit on a sure fire way to beat their blues "" NTR or non-ticket revenues. With intense competition and thin margins, Indian aviation companies, like their counterparts around the world, have started getting aggressive to garner NTRs at all touch-points with the consumer.

Of course, NTRs are much more critical for low cost carriers like Air Deccan. Its first brush with NTR probably preceded the ticket sales, when it painted NDTV ads on the body of its aircraft.

It then started in-flight catalogue shopping, in partnership with AVA Merchandising and more recently, a mid-air "bid & win" auction for the passengers looking at instant delivery of products.

"Many travellers suffer from the guilt factor (with regard to family) due to constant travelling. They want gifts to take home. For them, we have the bid and win," says John Kuruvilla, chief revenue officer at Air Deccan.

Air Deccan currently earns about Rs 25-30 crore annually through inflight-shopping (remember, it sells food and beverages too) and is targeting a similar amount through bid and win as well.

While NTRs account for about 8-9 per cent of Air Deccan's revenue, it is planning to grow it to 18-20 per cent in the next 2-3 years through new initiatives like online shopping through its high-hit website.

"The idea is to leverage the huge segment that has already decided to use their credit cards online for buying airline tickets, to also shop online," says Kuruvilla.

Competitor SpiceJet is also planning to offer online shopping and booking options for facilities like hotels. It is evaluating the in-flight catalogue shopping option too.

The company garners some NTRs though offering services to courier companies (since November 2005) "" about Rs 70-80 lakh a month which is less than 1 per cent of its revenue "" but is very clear that it will not go the in-flight advertising way. Says Sanjay Kumar, associate VP (marketing and planning): "We do not want to play with our branding".

Not all airlines think of it as "play" though. One of the more recent entrants in the low-cost space, GoAir, is keen on inflight advertising of both FMCG as well as white goods, and of service providers through its boarding cards, baggage tags and body of the aircraft (both inside and outside). "Our branding is our low price, service and performance, which will not be diluted," says the airline's chief commercial officer Raj Halve.

GoAir is aggressively looking at growing their non-ticket revenue to about 20 per cent of overall revenue over the next two years.

Halve reveals that apart from growing the inflight shopping market and cargo and on-board courier operations (which make up less than 10 per cent of their revenue at the moment), revenue will be generated through inflight advertising as well as hotel booking and car rental options through their website.

So, if you are a flier, get ready for your pocket to be accosted for things other than the ticket.