Airline ancillary revenue projected to be $67.4 billion worldwide in 2016
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 $67.4 billion worldwide in 2016. The CarTrawler Worldwide Estimate of Ancillary Revenue represents a nearly 200% increase from the 2010 figure of $22.6 billion, which was the first year for the ancillary revenue estimate. The CarTrawler Worldwide Estimate of Ancillary Revenue marks the seventh year IdeaWorksCompany has prepared a projection of ancillary revenue activity.
Click here for an infographic summary (JPG file) of key findings.
Top 2016 Merchandising Innovations to Delight Air Travelers and Boost Profits
The most retail-savvy airlines are in continuous pursuit of what works and discarding what no longer sells. Adding to this vortex, and to the blurring of traditional methods, is the expansion of mobile technology, metasearch sites, direct connect, and enhanced GDS capabilities. The latest report from IdeaWorksCompany provides a wide variety of examples − covering traditional airlines, low cost carriers, and suppliers from all over the world – to demonstrate unique methods that generate more revenue from the sale of tickets and ancillary revenue activities:
Switchfly Hotel Reward Payback Survey
IdeaWorksCompany releases results from the second annual Switchfly Hotel Reward Payback Survey, which now includes 6 global programs. During August 2016, IdeaWorksCompany conducted 1,305 reward queries for key hotel brands in six global frequent guest programs: Choice Privileges, Hilton HHonors, IHG Rewards, Marriott Rewards, Starwood SPG, and Wyndham Rewards. For example, Wyndham Rewards returns an average of 13.6% from room night spending as reward stay value. That’s a 143% higher return than the reward value provided by Starwood SPG, which was ranked last among the six hotel loyalty programs at 5.6% for reward payback.
Click here for an infographic summary (JPG file) of key findings.
New CarTrawler Ancillary Revenue Yearbook Catalogs $40.5 Billion in Revenue Boosts for 67 Airlines
“A billion here, a billion there − pretty soon you’re talking real money,” American politician Everett Dirksen once said. That’s precisely the case in the 2016 edition of the CarTrawler Ancillary Revenue Yearbook by IdeaWorksCompany, which reveals a total of $40.5 billion in ancillary revenue, comprising 8.7% of total sales, for 67 airlines covered by the survey. IdeaWorksCompany researched financial filings made by 135 airlines all over the world, discovering 67 which disclosed qualifying revenue activity − four more airlines than in the 2015 Yearbook. Now available free online, the 105-page, 2016 Yearbook provides a detailed global review of a proven revenue source that delivers a whopping $6.2 billion for United Airlines, 36.4% of sales for Wizz Air, and $51.80 per passenger carried by Spirit Airlines.
Southwest, JetBlue Lead Average Reward Price Rankings Among Five Major US Frequent Flyer Programs
Low-cost carriers Southwest and JetBlue continue to offer US flyers the lowest average reward seat pricing, despite an industry shift to dollar-based rather than mileage-based loyalty points accrual. The rankings for the two airlines mirror the results from 2015—and from the year before, when miles flown was the universal accrual method. These findings derive from the IdeaWorksCompany annual Switchfly Reward Seat Availability Survey. In May the firm released reward seat availability rankings for 25 of the world’s largest airlines.
Top Ancillary Revenue Rates Reach $52 per Passenger and $6 Billion per Airline
IdeaWorksCompany published the first ancillary revenue review of top-performing airlines back in 2008. The top ten airlines generated $8.4 billion that year. Fast forward to 2015 and the top ten tally has leapt to nearly $26 billion. Now, this group is a billion-dollar club with annual ancillary revenue ranging from just over $1 billion to $6.2 billion − which is #1 carrier United’s total. Top performer per passenger is Spirit, at $51.80 per customer; Spirit also tops the list for revenue share, at 43 percent of total sales.
Southwest and airberlin Top Reward Rankings but Turkish Airlines and Air China Rise High
The 7th annual Switchfly Reward Seat Availability Survey also finds JetBlue has best reward payback among major North American carriers. Value-oriented airlines dominate the top tiers of the 7th annual Switchfly Reward Seat Availability Survey. Two global carriers made significant improvements to their rankings. Turkish Airlines had the 4th best reward seat availability for 2016, which is much improved from its 15th place ranking in 2015. Likewise, Air China showed big improvement by moving to the 10th slot from 18th place in 2015.
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Switchfly Reward Seat Availability Survey Infographic
Aer Lingus, AirAsia, Ryanair, and Spirit Use Email to Sell After Booking
The need for ancillary revenue requires airlines to venture beyond the booking confirmation email. The latest report from IdeaWorksCompany follows that path to learn how airlines gain more sales after a booking is made. IdeaWorksCompany assessed the full set of emails sent by six top ancillary revenue airlines to learn how they encourage customers to buy more.
Aer Lingus, Pegasus, Spirit, SWISS, and WestJet Provide Excellent Online Examples of a la Carte Promotion
Shopkeepers know the best store layout balances an efficient shopping experience with the placement of subtle detours that cause consumers to consider buying more. Retail methods can fill airline shopping carts too; airline websites can easily apply these practices to booking path design. This requires airline executives to think like retailers and to create websites that go beyond enabling simple transactions to becoming destinations that engage and excite consumers. The latest report from IdeaWorksCompany reviewed the websites of airlines all over the world and details good practices regarding booking paths ─ and also what airlines should avoid
Air Canada, easyJet, Jetstar, LOT Polish, and United Among Airlines Using Non-Traditional Loyalty Methods
Loyalty is increased through a wide array of methods. To be exact, IdeaWorksCompany identifies six additional loyalty platforms beyond a traditional frequent flier program. Some may operate as replacements for traditional FFPs and others work to increase the loyalty of customers through a combination of rewards and recognition. The latest report issued by IdeaWorksCompany describes the many loyalty choices available, such as coalition programs, subscription plans, and credit-card based rewards.