New research from Amadeus finds four in every ten tickets purchased today using airline websites are cross currency with the required foreign exchange (FX) conversion.

This is typically performed by the bank of the passenger, behind the scenes, leaving an untapped source of direct revenue on the table.

A handful of pioneering airlines have already taken control of FX on their websites, improving the booking experience by enabling passengers to choose to pay in their preferred currency and generating a new incremental revenue stream from performing the FX conversion.

The 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 real-world traveler 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 traveler 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.”

More Information

Using real-world industry data from Outpayce and Amadeus Business Consulting, economists from CEBR were able to understand the actual monetary value of all cross-currency ticket sales.

Combined with an understanding of average passenger opt-in rates for multi-currency pricing gained from early adopter airlines, the economists were able to calculate the overall economic opportunity for the industry.

The analysis assumes a conservative average ‘FX spread’ (the amount an airline charges for performing the conversion) of 2.75 per cent in markets where data was less readily available.

In Europe, economists had access to richer data that allowed them to calculate precise average spreads.