A defining moment for measuring ancillary revenue?
IdeaWorks has released a summary of its latest look at airline ancillary revenues, saying that it will change its definition to include fare families. The headline findings from 2014 come as little surprise – revenues are up, low-cost carriers are at the forefront but legacy airlines are catching up, Europe and US are the most active regions. The report, sponsored by CarTrawler, leads with the statement that “2014 Airline Ancillary Revenue Leaps to $38.1 Billion – Up Nearly 21% in a Year” – an impressive increase, although the $38.1 billion is based on financial filings from 63 airlines, whereas last year the total came from 59 airlines.
U.S. Airlines Lead the World in Ancillary Revenue as Total Tops $38 Billion in 2014
IdeaWorks Company has released the numbers on airline ancillary performance for 2014, which reveals airlines earned $38.1 billion dollars in ancillary revenue, compared to the $31.5 billion earned in 2013. The company’s report, sponsored once again this year by CarTrawler, considers the performance of 63 airlines around the world—both major flag carriers and low-cost—which disclose ancillary revenue in their financial reports.
Airlines Pocket a Record $38 Billion From Extra Fees
When something works — and works well — you stick with it. That’s the approach that airlines across the globe are taking, as a new report found ancillary fee revenue grew at a double-digit pace last year. In fact, despite grumblings from passengers about additional charges, revenue from checked bags, changed reservations and a host of other additional fees jumped nearly 21 percent to an all-time high of $38.1 billion, according the annual study by IdeaWorksCompany and CarTrawler.
Wall Street Journal
The Best and Worst Airline Rewards Programs for 2015
Travelers continue to be frustrated by the inability to cash in frequent-flier miles for popular flights. Seats are often limited or nonexistent, and airlines more often ask for huge numbers of miles above basic levels to get award tickets. But an annual study of award availability shows Southwest Airlines and JetBlue Airways, both of which have point-based loyalty programs instead of using miles as currency for award tickets, had ample availability compared with other airlines. . . “Frequent fliers are better served by reward programs at value-oriented airlines,” says Jay Sorensen, president of IdeaWorks, the consulting firm that conducted the study for the sixth straight year.
Wine, weddings and Hobbits! Wacky flyer rewards revealed
Most travelers feel lucky if they can swap their frequent flyer miles for first-class upgrades or a free flight. But a recent study found at least 160 airline frequent-flyer programs worldwide offering redemption options that are far more interesting, innovative and, at times, a bit wacky. Among other things, the study by research company IdeaWorks and tech company Switchfly found that El Al offers an inflight marriage proposal kit for $60 plus 120 travel points. If you let the airline know you plan to pop the question during the flight, a crew member will deliver a bottle of wine, wine glasses and chocolates when (or if) your proposal is accepted.
Business Travel News
ON THE SOAPBOX: Tony Tyler – IATA
The New Distribution Capability (NDC) will change the way air travel is retailed by giving travel agents and travel management companies (TMCs) the capability to access features and options typically available only on airline websites. The demand is clear: last year air travellers spent an estimated US$28.5bn on such things as on-board food and beverages, checked baggage, premium seat assignments, and early boarding, according to IdeaWorks Company and CarTrawler. Yet few of these ancillary products and services were purchased through travel agents or third party travel sites because they are not easily accessed by agents.
IATA opinion published in International Business Daily – China
Aviation Industry will Benefit from NDC – Commentary by Yanik Hoyles
Last year air travelers spent an estimated $28.5 billion on options such as onboard food and beverages, checked baggage, premium seat assignments, and early boarding, according to research by IdeaWorks Company and CarTrawler. Yet while an estimated 50% of airline tickets are sold via brick and mortar travel agencies and online travel sites, the vast majority of ancillary products and services are sold by airlines on their own websites, where customers are able to view detailed product information that may not always be easily accessible on systems used by agents.
Best frequent flier rewards: From magic scarves to koala cuddles
It used to be that frequent flier rewards were pretty standard. Not so these days: airlines are instead trading in magical scarves, Justin Timberlake concert tickets — even marriage proposals. “There’s a high amount of demand for airline seats. Rather than frustrate members by shutting them out, airlines figure, why not offer them an award that is always available,” notes Jay Sorensen, president of IdeaWorksCompany, which recently released a report on the weirdest and most wonderful frequent flier awards.
Why Smiling Flight Attendants Need to Be Part of Airlines’ Fee Strategies
IdeaWorksCompany.com president Jay Sorensen says poor management of relations between airline executives and employees is a major reason behind many airlines’ struggle to get the most out of ancillary revenue initiatives. An IdeaWorks report, “Boost Ancillary Revenue Though Empathy, Competence and Kindness,” details examples of airlines taking steps to empower employees to drive ancillary sales.
Report urges airlines to be nice
A new study released Monday offers airlines, an often-hated industry, a simple secret to further their success and pad their bottom lines: Be nice. “Call it a back-to-basics mantra, but sometimes in a technology-riddled world, we all can benefit from a few therapeutic reminders to reset our moral compasses,” says the IdeaWorksCompany report, “Boost Ancillary Revenue Through Empathy, Competence and Kindness.”