About four in every 10 tickets purchased using airline websites today are cross currency with the required foreign exchange (FX) conversion typically performed by the passenger’s bank behind the scenes, leaving an untapped source of direct revenue on the table, new research shows.
A new analysis commissioned by Outpayce from Amadeus and undertaken by the Centre for Economics and Business Research highlights the scale of the FX opportunity for airlines.
According to the study, if every airline adopted Multi-Currency Pricing on its website the industry stands to generate $1.74 billion in new incremental revenue each year, based on today’s real-world traveller opt-in rates.
If every passenger purchasing a cross-currency ticket opted to pay in their preferred currency (meaning FX services are provided by the airline rather than their bank), the overall FX revenue opportunity for airlines increases to $9.6 billion annually.
Incentivising Multi-Currency Pricing with traveller benefits like loyalty points could help airlines access this larger prize.
The largest FX opportunities are to be found in the Asia Pacific (APAC) and Europe, Middle East and Africa (EMEA) regions where a wide range of different currencies are used, leading to more ‘cross-currency’ tickets and therefore higher demand for FX services.
Damian Alonso, Head of Product and Partnerships, Outpayce said: “There’s significant passenger demand for FX services and today airlines capture a very small slice of this high-margin business, with most conversions performed by financial intermediaries.
“Yet, how an airline prices its offers is integral to its digital experience – with travelers often navigating away from a site when presented with a currency they don’t understand. With our MCP solution, airlines can take control, helping to boost customer satisfaction and conversion, while delivering a new source of revenue.”
For early adopter SriLankan Airlines, passenger take-up of FX Box Multi Currency Pricing has been so significant, the service has become a top five ancillary product – just behind business class upgrades, bag, and seat related ancillaries.
Bimali Malalasekara, Digital Commerce Manager, SriLankan Airlines said: “At SriLankan, we’ve been pricing our fares in multiple currencies since 2021, and we’ve made the service available across our key markets.
“FX is a ‘win-win’ service because it improves the booking experience for passengers and generates entirely new revenue. My advice to airlines getting started with FX is to ensure the spread you charge is fully transparent to passengers from day one.”
