Revenue-Based Accrual as the New World Order
The latest IdeaWorksCompany report reviews how the frequent flier business is positioned for change due to moves made by key players and their desire to revolutionize accrual methods. For many fliers, gone forever as of 01 January 2015 is the notion an economy class fare accrues miles on the basis of distance flown. Instead, the almighty US dollar will determine the miles posted to member accounts. “Revenue-Based Accrual as the New World Order” was released today as a free 15-page report and is available at the link above. The 2014 Loyalty Marketing Report series is sponsored by Switchfly, a global technology company that powers travel commerce and loyalty redemption solutions for leading travel, financial services and ecommerce brands.
2014 CarTrawler Yearbook of Ancillary Revenue by IdeaWorksCompany
The 2014 CarTrawler Yearbook of Ancillary Revenue by IdeaWorksCompany, now available free online, provides the most detailed global assessment of a bottom-line-booster that can represent more than 38 percent of a carrier’s revenue. The full 85-page report examines 59 airlines that disclosed revenue in financial filings during 2013 from activities such as frequent flier miles sold to partners, fees for checked bags, and commissions from car rentals.
2013 Airline Ancillary Revenue Lifts to $31.5 Billion – Up Nearly 1200% Since 2007
The annual CarTrawler survey of global airline ancillary revenue shows growth to $31.5 billion for 2013 ─ an increase of 1200 percent since the first such survey in 2007. IdeaWorksCompany researched the financial filings made by 114 airlines all over the world, 59 of which disclose ancillary revenue activity, to reveal that ancillary revenue reported by airlines reached $16 per passenger in 2013, easily surpassing global figures for profit per passenger. This press release describes highlights from this research and a top 10 list of best performing carriers in three categories.
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CarTrawler Survey of Airline Ancillary Revenue GRAPHIC
Southwest, airberlin, Virgin Australia Still Tops For Rewards, But Delta and Turkish Airlines Make Big Leaps Upward
Value-oriented airlines dominate the results in the 5th annual Switchfly Reward Seat Availability Survey. Airberlin, Southwest, and Virgin Australia have placed within the top six slots for every edition of the reward survey since 2010. For 2014 airberlin and Southwest share first place with outstanding 100% scores; every flight queried in the survey provided reward seats at saver-style levels. The 25 carriers in the survey remained the same as 2013, except China Southern replaced AirTran as the latter continues to be absorbed by its parent Southwest Airlines.
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Switchfly Reward Seat Availability Survey GRAPHIC
Top 10 Things You Need to Know about Ancillary Revenue
After 10 years, a new business model has transformed the world’s biggest industry. The business upheaval that began in the air travel industry a decade ago has now grown to span the globe, has brought economic vitality back to the world’s airlines, enabled the worldwide boom in low-cost travel, and granted consumers the gift of choice. The report identifies many key elements of this phenomenon, including: baggage charges, branded fares, subscription programs, high value customers, transparent pricing, and frequent flier program revenue.
Points, Pillows and Porsches: Hotel and Car Rewards at the Top 30 Airlines
It’s no surprise the largest loyalty programs – American AAdvantage, Delta SkyMiles, and United MileagePlus – offer car rental and hotel rewards. The biggest surprise is posed by the high profile global carriers that don’t, such as Air China, Turkish Airways, and US Airways. Reward activity, survey results, and the prevalence of broad-spectrum rewards indicate they have become a “must have” amenity for frequent flier programs wishing to compete on a global scale. The report describes how better airline brands engage their top customers in a deeper relationship by going far beyond a basic selection of reward tickets and upgrade rewards.
VIP for a Fee: Airport Services Designed for High Value Customers
VIP treatment, such as early boarding, bonus miles, fast track screening, and first class upgrades, has proven to produce the revenue payback eagerly desired by airline management. The eleven airlines reviewed in this report (Air Asia, Air France, American, Delta, Emirates, Etihad, Hawaiian, LOT Polish, Lufthansa, Qatar, and Virgin Atlantic) provide personalized one-on-one airport service that often stretches from curbside to the aircraft door. The report describes how these airlines allow consumers to buy the package of goodies once reserved for travelers having gold and platinum status.
Airline ancillary revenue projected to reach $42.6 billion worldwide in 2013
IdeaWorksCompany, the foremost consultancy on airline ancillary revenues, and CarTrawler, the leading provider of online car rental distribution systems, project airline ancillary revenue will reach $42.6 billion worldwide in 2013. The CarTrawler Worldwide Estimate of Ancillary Revenue represents a massive increase of 89% from the 2010 estimate of $22.6 billion. The CarTrawler Worldwide Estimate of Ancillary Revenue marks the fourth year IdeaWorksCompany has prepared a projection of global ancillary revenue activity, and is the first year that CarTrawler’s sponsorship of this forecast includes a series of ancillary revenue reports.
Economy Class Meals Get an a la Carte Upgrade
Air France, Austrian, Condor, Hawaiian, KLM, and US Airways hope customers will forego free and pay for better food. Consumers and pundits might be surprised, but many managers at traditional airlines don’t embrace the zen of frugal inflight fare. It’s more glamorous (and easier) to provide fine dining free of charge. But it’s economically infeasible. The latest report from IdeaWorksCompany analyzes the efforts by six airlines to create a positive perception of their economy class product by selling upgraded meals and generating some ancillary revenue at the same time.
Premium Class Rewards Provide Best Value for Frequent Flier Members
One of the recurring debates about the booming loyalty marketing industry is whether rewards provide notable value . . . and which rewards are the most valuable. To answer this, IdeaWorksCompany conducted booking research using United’s MileagePlus program (largest in the world) to determine which rewards provide members the greatest dollar value. The answer was clear: Booking first class travel to Hawaii, Europe or Asia provides best value for redeeming frequent flier miles.