Budget airlines, already masters at upselling, are now hoping high-end alcoholic drinks might encourage passengers to take out their wallets.
Airlines like Spirit Airlines (SAVE), JetBlue (JBLU), and Allegiant Airlines (ALGT) keep the lights on by luring in customers with rock-bottom ticket prices, while charging fees for everything from checked bags to bottled water.
By routinely offering flights for less than $100, budget airlines are betting their customers will have some extra spending power to buy luxuries like premium drinks — even if they make NYC cocktail prices look like happy hour menus.
Budget airlines are trying to tap into Americans’ split-brain spending habits by adding premium drink options. Most consumers have specific categories where they spend frugally and categories where they spend freely.
When it comes to buying flights, many travelers are inclined to simply buy the cheapest option. But that isn’t necessarily reflective of their overall spending habits and doesn’t mean they won’t splurge a bit once they’re onboard and in holiday mode. These airlines are hoping premium drinks could help make up for some of the revenue lost by offering such cheap flights.
Mastering the Upsell
The idea to start offering high-priced premium drinks came from a perhaps surprising source: customers.
In response to a feedback survey, many Allegiant passengers stated they’d be interested in more premium alcohol options onboard. Allegiant was quick to start offering options like Don Julio Reposado (DEO), Grey Goose, and a number of premium wines on flights to and from Las Vegas.
At least one of Allegiant’s in-flight spirits is a great deal: Johnnie Walker Blue Label is priced at $35 a shot — which may seem steep until you consider an ounce of the premium scotch can go for up to $80 in restaurants and clubs.
Allegiant’s premium alcohol sales have been strong so far, and others like Frontier (ULCC) aren’t far behind, meaning top-shelf liquor could soon become a staple of budget flights.
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