The non-air ancillary market is a major source of income for airlines, comprising on average 17% of an airline’s total revenue. Within this market, travel insurance is the best-performing non-air ancillary product according to Statista, whose research showed that it is offered by 89% of airlines.
The reason behind this is clear.
Travel insurance provides travellers with peace of mind, regardless of where they are going or why. This makes it a valuable product that can be offered to a wide range of customers. It is also a product that can be easily purchased as part of a bundled package, which enhances the customer experience all while increasing the conversion rate. This business model is a win-win situation for all involved: the airline, the insurance company and the customer.
In the same way, purchasing and using an eSIM offers peace of mind, as it eliminates the need for a physical SIM card and allows the traveller to access reliable roaming data from trusted providers without hassle. As with travel insurance, the process is quick and easy, with immediate access to the service once purchased.
Being insured and being connected are both fundamental aspects of travelling. This is for different reasons, of course – one product can be used liberally, while the other, we would hope never has to be used at all!
The delivery process for insurance and eSIM plans is more seamless than almost every other travel ancillary on the market. The seamlessness of the eSIM technology means it has the potential to become the next major revenue source for airlines.
So what motivates a person to buy travel insurance, and can the same motivation be applied to eSIM plans?
Ancileo’s 2022 Travel Insurance Outlook shows that in 9 out of 12 countries participating in the survey, people value price as the key factor when considering whether to purchase travel insurance. The other motivating factors are set out in the graph below:
eSIM ancillary providers, such as Simtex, tick all these boxes when it comes to data roaming plans:
- Plan offered as a discount compared to market rate: eSIM solutions offer competitive prices and discounts compared to the rates for roaming data offered by the cellular provider from the traveller’s country of origin. For example, a UK resident travelling to Singapore would need to pay their UK provider at least £42/week. With Simtex, that price drops to £19/week – a 45% reduction.
- Plan coverage is personalised to their needs: Simtex offers personalised packages to every traveller according to their individual destination(s) and the duration of their stay(s). It doesn’t get more tailored than this.
- Product is offered by a preferred company: Simtex only works with top global networks in the world, ensuring that travellers have reliable connectivity on the go.
- A plan offered in a 1 click convenient purchase at the point of sale: the eSIM technology can easily be integrated into the flight ticket booking journey, making it a convenient option for travellers.
- Extra perks are bundled with the plan: Simtex’s eSIM packages can be linked to loyalty programs, allowing travellers to pay with miles or receive additional miles on purchase.
Due to these similarities, reports show that eSIMs are expected to perform as good as travel insurance in the non-air ancillary market.
Since an airline’s website is often the first point of call for travellers when they are planning a trip, partnering with a B2B eSIM ancillary provider, such as Simtex, would allow the airline to become a one-stop-shop for travel essentials, perfecting the customer experience.
