If you’re a regular reader of this blog, you know I’m an avid collector of amenity kits and have an ongoing series reviewing them. They’re a fun item to collect and I love seeing each new generation an airline debuts, wondering if they’ve spruced it up or cheapened it down.
Earlier this month, The Business Journals ran an interesting piece discussing their allure, evolution and marketing power for not only the airlines, but also the brand name items within.
And I’ve always wondered what the true cost to airlines is for the final product and this article gives a little hint. The author spoke with a top U.S. executive of an international airline to reveal the following:
“The stuff is all over the map,” he said. “An amenity kit can cost an airline anywhere from $4 to $30 a unit. No one agrees whether it’s great for brand identity or it’s something that we’re afraid to get rid of because we’ve always done it. And the logistics are a nightmare. First you have to source them, usually in China, and then palletize them for shipment to the head office. Then you have ship them in containers to the international stations. The kits have to fit on the metal carts in-flight and you have to figure out how many to carry and how to store them.”
Thirty dollars sounds steep to me, but then again, some airlines offer exceptional kits packed with high-end cosmetics that would retail for top dollar in their full-size counterparts. The kits from Asiana, Emirates and Thai come to mind in this case. I’d have to guess the spend by U.S. airlines is nearer the $4/unit mark.
And about those high-end cosmetics, another article quotes a L’Occitane sales executive as barely marking up their products when pitching them to airlines. It’s pretty obvious why: simply for the large-scale exposure.
L’Occitane marks up products as much as 600 percent for retail sale, whereas the markup is closer to a razor-thin 12 percent for an airline deal. This level of discounting is typical of airline amenity contracts, especially at a time when major carriers are strapped for cash.
That article was 2007, admittedly, but I’d have to imagine there’s still very little up-front profit today in a skin care manufacturer’s airline deal, if at all. And back in 2006, Travel + Leisure calculated the value of some amenity kits based on what the per-ounce retail price would run for the cosmetics. Air France came in on the low end at the time at $49 with its Clarins products, and Japan Airlines at the top at $137 for its Shiseido and Clé de Peau lotions.
I will undoubtedly continue to grow my collection and while I’ll miss it this year, I definitely plan to attend the annual Airline Amenity Bag Awards next year in Hamburg. I’ll be in heaven!