Analysis: Is the golden era of frequent-flyer benefits over?
Buying Business Travel
Social media comment from travellers who opt for the lowest fares and get the least rewards has, predictably, been highly critical; those with elite status who pay higher fares and get the best rewards, less so. But as the global airlines have shown with their egregious pursuit of ancillary fees, they’re very much focused on increasing revenues. Total ancillary fees levied by the world’s airlines last year reached a record US$59.2 billion according to the consultancy IdeaWorks, with US airlines alone accounting for a third of this revenue stream.
American and United Ready No-Frills Fares to Take on Discounters
Stung by competition from ultra-discount carriers, American Airlines Group Inc. and United Continental Holdings Inc. are striking back with cheap, no-frills tickets of their own. The strategy carries risks for the legacy airlines. American, United and Delta dominate the U.S. and have alliances with global carriers, advantages that would seem to negate the need to compete for the most price-conscious customer, said Jay Sorensen, a former Midwest Airlines executive who is now president of airline consultant IdeaWorksCompany.
The Best and Worst Frequent-Flier Rewards Programs for 2016
Wall Street Journal
For the third year in a row, free seats open for booking increased in the Switchfly Reward Seat Availability Survey, a comprehensive look at success at redeeming miles or points at the basic “saver” level. The survey found two seats available at the lowest mileage level on 77% of the booking queries made this year, up from 74% last year and 72% in 2014. “Overall, I think the consumer is being better served than the year before,” says Jay Sorensen, president of IdeaWorks, the consulting firm that conducted the study.
Redeeming Frequent Flier Miles Is Getting Much Easier
According to the Switchfly Reward Seat Availability Survey, which was released on Wednesday in conjunction with consumer-focused IdeaWorks, airlines will be offering their frequent fliers more reward seats. The survey looked at 7,000 flights, both domestic and international between June and October, and found that there were reward seats available on 76.6% of them. That’s the highest it’s been in the seven years that this survey has been conducted. “I would say it is getting easier, especially if you live outside the United States,” IdeaWorks president Jay Sorensen told CNBC.
For frequent fliers, using miles is getting easier
Frequent fliers will have an easier time using their rewards while booking travel plans for the summer and fall, thanks to more flights offering open reward seats. According to the latest Switchfly Reward Seat Availability Survey, released in conjunction with IdeaWorks on Wednesday, of more than 7,000 domestic and international flights that are scheduled from June through October, 76.6 percent offer reward seats.
How airlines squeeze more money out of us
New Zealand Listener
Charging for extras on top of an airfare was initially driven by low-cost carriers, but ancillary revenue is now an important earner for all airlines. US consultancy IdeaWorks Company forecasts it will increase 19% worldwide to US$59.2 billion in 2015, up 163% on five years ago.
Budget Fliers Should Love Airline Fees
Wall Street Journal
In 2014 airlines generated $38 billion in ancillary revenue, according to a study by IdeaWorks. That money keeps base fares low. And airline profits are far from outrageous. The average net margin for all scheduled U.S. carriers was 4.4% in 2014. Even in the first three quarters of 2015, after oil prices had plummeted, the average net margin was only 14%.
Aer Lingus, Pegasus, Spirit, SWISS and WestJet provide excellent online examples of a la carte promotion
Travel Daily News
The latest report from IdeaWorksCompany, sponsored by CarTrawler, reviewed the websites of airlines all over the world and details good practices regarding booking paths – and also what airlines should avoid.
Delta Is Out-Innovating All Other Airlines With Its Branded Fares
Airline marketing and ancillary revenue consultancy Ideaworks has announced its list of the top five airline marketing innovators for 2015, and listed Delta as the industry’s best at building revenue through ancillary sales, including its “branded fares” and Comfort+ product. “Delta continues to be an industry leader in product development and providing premium choices for its customers at every price point from Basic Economy to First Class,” Ideaworks states in its announcement.
Airlines Made Close to $11 Billion Off of Fees This Year
Hold on to your wallet. North America’s airlines will charge almost $11 billion in so-called a la carte fees for everything from seat reservations to luggage this year — a 24% increase over what was collected in 2014. That’s according to a new survey by IdeaWorksCompany, an ancillary fee consulting company. The results suggest that despite an outcry from airline passengers the sky remains the limit for new fees.