2014 Airline Ancillary Revenue Activity Surpasses $38 Billion, Up Nearly 21 Percent
IdeaWorksCompany researched financial filings made by 130 airlines all over the world, 63 of which disclosed qualifying revenue activity, to reveal that ancillary revenue reported by these airlines was $38.1 billion for 2014. That represents a more than $35.6 billion increase since 2007, and the 2014 number is up 20.9% over $31.5 billion from 2013. The 2015 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 38.7% of a carrier’s revenue, as it does for Spirit Airlines in the US, or $56.28 per passenger for Jet2.com in the UK, and $5.86 billion for global behemoth United Airlines.
2014 Airline Ancillary Revenue Leaps to $38.1 Billion – Up Nearly 21% in a Year
For the eighth consecutive year, 63 airlines tracked by IdeaWorksCompany reported substantial increases in revenue from retail activities and the sale of a la carte services and frequent flier miles. The IdeaWorksCompany study, sponsored by CarTrawler, focused on 63 airlines which disclosed qualifying revenue activity, to reveal that ancillary revenue reported by these airlines was $38.1 billion for 2014.
Brussels Airlines, JetBlue, KLM, and United Rev Up Their Ancillary Revenue Engines
The best airline merchandisers know a la carte revenue is boosted by a magical combination of human support and distribution technology. The most recent ancillary revenue report sponsored by CarTrawler celebrates retail and merchandising innovations that support ancillary revenue. It offers a collection of examples that rely upon technology and training to create a type of mercantile seduction that encourages consumers to open their wallets and spend.
Southwest and airberlin Still Tops for Rewards, but Alaska Airlines and Avianca Jump in the Rankings
IdeaWorksCompany releases results from the 6th annual Switchfly Reward Seat Availability Survey. Value-oriented airlines dominate the top tiers of the 6th annual Switchfly Reward Seat Availability Survey. Airberlin, Southwest, and Virgin Australia have placed within the top six in every edition of the reward survey since 2010. But global network carriers Air Canada (and the Aeroplan coalition loyalty program), Lufthansa, and Singapore are now in the top 5. Once again, airberlin and Southwest share first place with outstanding 100% scores; every flight queried in the survey provided reward seats at saver-style levels.
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Swithfly Reward Seat Availability Survey Graphic
American, Etihad, Qantas and 20 Other Airlines Woo Members with Wild, Weird and Wonderful Rewards
From marriage proposals to magic scarves, savvy airlines intrigue customers with mileage rewards that go far beyond flying. IdeaWorksCompany recently reviewed the frequent flier programs of 160 airlines around the world to gather examples of alternative rewards such as unique experiences, event tickets, and retail goods. Beyond the benefit of reducing reward liability, alternative rewards can encourage members to interact more frequently and deeply with the program. In addition, a thoughtful selection of rewards can create a personality for the frequent flier program and ultimately the airline. Does the program wish to be playful, luxurious, or socially aware? Through its review of programs worldwide, IdeaWorksCompany offers examples of 25 alternative rewards ranging from the extravagant to everyday comforts.
Airlines Can Best Boost Ancillary Revenue Through Empathy, Competence, and Kindness
Michael O’Leary, the CEO of Ryanair, recently admitted “If I had known being nicer to our customers was going to work so well, I would have done it years ago.” As notable as O’Leary’s epiphany is to the airline industry, it’s worth pointing out that the proven value of empathy, competency, and kindness precedes his recent directives to be nice to customers. The latest report from IdeaWorksCompany explores how airline management teams can work together for the greater good of their customers, employees, and investors.
Vueling Airlines Is 2014 Champ for Revenue Innovation and Marketing Leadership
IdeaWorksCompany begins a new year-end tradition by identifying the airlines that have shown the greatest prowess in the areas of ancillary revenue, a la carte pricing, and loyalty marketing. Throughout 2014, we assessed the top ancillary revenue producing airlines and the most generous frequent flier programs, and issued reports that described the industry’s service innovation and product development; as well as offering practical advice for airline executives. The top 5 revenue innovators named by IdeaWorksCompany also include Delta Air Lines, Wizz Air, Ryanair, and Jeju Air.
Profit From Innovation: Ancillary Revenue Examples From Around the World
IdeaWorksCompany and CarTrawler offer a global a la carte buffet from 20 companies including
Aer Lingus, Amazon, American Airlines, Lufthansa, and Tune Hotels. Retail-oriented airlines are trying new concepts, testing results in the marketplace, and quickly tossing those don’t produce results. The latest IdeaWorksCompany report reviews innovations that rely upon consumer desire for more comfort, convenience, and certainty. The companies featured in this report know that when a service provides good retail value consumers will click to buy it. “Profit From Innovation: Ancillary Revenue Examples From Around the World” was released today as a free 19-page report available at the IdeaWorksCompany website
Airline ancillary revenue projected to be $49.9 billion worldwide in 2014 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 $49.9 billion worldwide in 2014. The CarTrawler Worldwide Estimate of Ancillary Revenue represents a massive increase of 121% from the 2010 figure of $22.6 billion. Earlier this year, CarTrawler and IdeaWorksCompany reported the ancillary revenue disclosed by 59 airlines for 2013. These statistics were applied to a larger list of 180 airlines to provide a truly global projection of ancillary revenue activity by the world’s airlines in 2014.
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Worldwide Estimate of Ancillary Revenue GRAPHIC
Revenue-Based Points Accrual May Be the New World Order
Delta Air Lines has certainly created a strong tailwind for itself. Profits are at record levels, corporate debt is declining, lie-flat seating has been introduced globally to business class, and the cash dividend has been increased for shareholders. The airline has expressed a profound eagerness to change almost everything about its business, so it’s not surprising this philosophy finally touched the SkyMiles program. 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.