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.
Revenue-Based Accrual as the New World Order
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.
Ancillary Revenue per Passenger for 2013 was $16, Up Nearly 129% from 2007
2014 CarTrawler Yearbook of Ancillary Revenue by IdeaWorksCompany compiles results from 59 airlines worldwide. Ancillary revenue now provides the power for airlines to be profitable. The global airline industry hopes to achieve an average net margin of 2.4% for 2014, which is less than $6 per passenger. The first IdeaWorksCompany ancillary revenue report for 2007 identified $2.45 billion from just 23 airlines for an average of $6.99 per passenger. Now, six years later, every aspect of ancillary revenue has dramatically increased, to include a 1,200 percent increase of ancillary revenue disclosed by airlines globally. This has allowed the world’s airline industry to tilt into the column of profitability while keeping fares modest as consumers recover from recession. The 2014 CarTrawler Yearbook of Ancillary Revenue by IdeaWorksCompany was released today as a free-of-charge report sponsored by CarTrawler.
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.
How budget airlines REALLY make their money: Jet2 and Wizz Air rely on optional extras MORE than Ryanair, with only 65% of their income coming from ticket price
The world’s top airlines collected more than £31.5billion in extra charges in 2013, an increase of more than £4billion on the previous year. Some airlines are making up to 40 per cent of their money from charging for extras like seat allocation, checking in luggage and food and drink on flights, according to a report by consultancy IdeaWorksCompany.
Wizz Air and Jet2.com worse than Ryanair for extras
Airlines around the world collected at least £31.5 billion in extra charges last year, a new study has shown, an increase of more than £4 billion on last year’s figure, and up 1,200 per cent since 2007. The report, by the consultancy IdeaWorksCompany, examined “ancillary” revenue – baggage charges, car hire commission, sales of in-flight food and drink and so forth – at 59 major airlines.
Sydney Morning Herald
What’s keeping the airline industry alive
The flying business has a cute name for it: “a la carte”. That’s how the airline industry now dresses up all the extras airline passengers are hit with in its latest marketing fad. But don’t be mistaken that the so-called ancillary revenue fad, which has been around only since the middle of the last decade, is temporary. The crude mathematics in last week’s definitive annual report on the subject, by a US consulting firm, IdeaWorksCompany, show how desperately dependant the airline industry has become on ancillary revenue.
Airlines raked in $31.5 billion in fees in 2013
The latest study on passenger fees collected by the world’s airlines reached a predictable conclusion: Airlines are pocketing more than ever. The annual tally by IdeaWorksCompany, a Wisconsin-based consultant to the airline industry, found that 59 airlines collected $31.5 billion in fees in 2013, compared with $27.1 billion for 53 airlines in 2012.
Airline fees surge to $31.5 billion
Air carriers took in $31.5 billion US in revenue from fees last year, according to a survey conducted by IdeaWorksCompany, a firm that helps airlines grow non-traditional revenue streams, and CarTrawler, a car rental services company.
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