Jet, Nokia take advertising to new heights

Don't be surprised if you notice a cola or a consumer durable company advertisement on the exterior of a Jet Airways plane.

In these times of high losses, airlines are looking at multiple options to earn cash and Jet Airways will use its aircraft exterior as advertising space.

To begin with, one Jet Airways Boeing 737 will carry an advertisement of Nokia Lumia, the Finnish company's new smartphone. A formal marketing tie between Jet and Nokia and unveiling of the Nokia ad took place today.

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It is not unusual for airlines abroad to have advertisements on their planes.

Low cost carriers, for instance, depend a great deal on ancillary revenue from advertisements on their planes.

Air Deccan initiated the practice in India when its Airbus A320 carried ads of news channel NDTV and of Sun Microsystems.

In his autobiography, Deccan founder G R Gopinath says the Directorate General of Civil Aviation nearly scuttled his efforts, after raising issues regarding the type of paint to be used in these ads.

However, no other airline in India had emulated Deccan in this respect till now.

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According to a survey by technology solution provider Amadeus, airlines the world over had earned $32.5 billion from ancillary revenue so far this year, a rise of 43.8 per cent over last year.

A few low-cost airlines, including Ryanair, Air Asia and easyJet, earn nearly 20 per cent of their revenue from such ancillary sales, while the global average for low-cost carriers is 6.5 per cent.

US airlines contributed 38 per cent of the ancillary revenue, the report said.

For US carriers, the sale of frequent flier miles, baggage fees, commissions, on-board sales, hotel bookings and priority check-in and seating were the main contributors to revenue.

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In India, however, the contribution of ancillary revenue is marginal.

Aviation analysts estimate Indian airlines earn about three-five per cent of their revenue from ancillary components.

Airlines in India print advertisements on the back of boarding passes and baggage tags, are selling holiday packages, travel insurance and co-branded credit cards to increase such revenue.