In-flight Retail: JetBlue

Apple Pay – two simple words that when placed together mean very little, but when combined with a consumer electronics and computer giant, have enough power to change the way much of the world does commonplace retail transactions.

Those two words made their way into the business world lexicon late last year, when Apple announced it was entering the world of near-field communications (NFC), launching a program where users of iPhones and iPads can complete transactions without swiping a credit card, and pay for goods and services with literally the wave of a phone-wielding hand.

It seems fitting that a relatively new airline was first out of the blocks to be an early adapter of NFC technology, establishing a purchasing system onboard its aircraft with the help of a gategroup firm and a longtime supplier of onboard point-of-sale hardware and, of course, several thousand iPad Minis destined for flight attendants.

The next move in inflight retailing began in early February when JetBlue Airways announced it would be the first major domestic carrier in the United States to accept Apple Pay™ transactions for passengers with both models of the iPhone® 6 and later, Apple’s iWatch™. Almost immediately after the announcement the airline began its initial steps that will, by this summer, have iPad Minis in the hands of 3,500 JetBlue flight attendants who will sell the airline’s à la carte food options, beverages, onboard amenities and additional seating space. In addition, functions on the iPad will give flight attendants a profile of the aircraft’s cabin and the airline’s important True Blue program members. Crew will read manifests and help passengers with connection information and even wish them a happy birthday.

The iPads were in the hands of approximately 300 flight attendants when Blair Koch, Vice President of Information Technology Commercial and Shared Development Services at JetBlue talked with PAX International. Even with the initial investment, he said his department made a strong case that the roll out of Apple Pay would make good financial sense for JetBlue. He said the airline’s previous system relied on hand-held devices that tended to not be available inflight and would often lose credit card transactions when crew attempted to synchronize the device back at one of the airline’s bases.

“This solution is going to be a huge cost savings for us,” said Koch. “In fact, that was our business case.”

But another reason was more intangible. JetBlue sees in its passenger base a group of travelers who would welcome Apple Pay options and would be inclined to be impressed with an airline that offers the service.“For us, that kind of association with Apple as a brand is great, and they likewise like to have an association with us as a brand,” Koch said.

The suppliers

Such a program cannot be carried out alone, and helping JetBlue make the transition to offer Apple Pay as an option is eGate Solutions, a division of gategroup, and a company called Infinite Peripherals of Elk Grove Village, Illinois.

From eGate Solutions, the airline made use of its TS onboard retail and cabin management technology. It was the first time the company has implemented the TS product in a NFC-enabled environment. In addition to recording sales, the TS platform integrates the front-end operations with back office data and planning. With the enhanced TS product, airline customers in the future will be able to work with any NFC-enabled peripheral device to accept Apple Pay. One of the people who was part of the project was Cenith Wheeler, Director of Operations and Customer Support at eGate Solutions. To make the capabilities work for JetBlue, Wheeler said eGate Solutions coordinated the rollout with Apple, banking services and the hardware supplier.

“We had to work with the banking institutions of the customers, especially for the Apple Pay,” Wheeler said. “The processor has to be Apple certified for processing those types of payments. Just connecting the multiple moving pieces was the most challenging part.”

eGate Solutions works with approximately 20 airline customers on their retail platforms. Users profiled run the gamut from chip and pin, to credit card swiping and other programs. Wheeler said as airlines shed hardware that is not up to date, many will have the possibility to make the transition to and NFC platform that offers greater opportunity for sales.

In the February 10 announcement of the collaboration with JetBlue, eGate Solutions’ President and Managing Director Simon de Montfort Walker said, “the consumer demand for technology conveniences onboard will only grow as mobile devices and other consumer electronics become more pervasive. Implementing a modern payment infrastructure gives JetBlue a significant competitive foothold, as more consumers move toward mobile payments.”

Such mobile payments onboard have been a primary business for Infinite Peripherals, a company that has been manufacturing point-of-sale hardware for the airline and other industries for more than 20 years. In addition to being in on the ground floor of the Blackberry-based buy-onboard sales movement, Infinite Peripherals makes uses of Palm and Apple devices to help other retail segments print receipts and record transactions. The company has more than half a million point of sale devices in field.

Richard Keever, Director of Sales at Infinite Peripherals, told PAX International that approximately six months of testing, with feedback from users took place before the February launch in JetBlue’s Mint service cabin. In addition to the iPad mini that crew are now receiving, is a bright blue reader designed by Infinite Peripherals that attaches to the lightening connector on the Apple device. The device is loaded with Infinite Peripherals Infinea Tab M® that can record transactions and send credit card numbers for real-time processing, either through the JetBlue Fly-Fi connectivity system or the a 4G LTE communications mobile voice and data system that is also part of a flight attendant iPad communications system.

Keever sees the long-awaited move to NFC as a possible boom to inflight sales. While many passengers may stow wallets filled with debit and credit cards in the luggage bin, they nearly always have access to their mobile phone. When the trolley comes down they aisle, many may be more inclined to make a purchase.

The announcement did more to enhance the future of NFC payments than anything the industry has seen in awhile. Before the Apple Pay launch, Keever said card issuers were removing the contactless features on credit cards and retailers were pulling NFC readers from their stores. The announcement by the computer giant was a game changer, said Keever.

“Before Apple Pay came out, NFC was being given last rites,” he said.