Now boarding: higher fees for air travelers
The Boston Globe
According to a study from the consulting firm IdeaWorksCompany, which focuses on the airline industry, ancillary income for the top 10 international carriers in 2007 was $2.1 billion. In 2017, that figure had risen to $29.7 billion. The additional fees are even higher among low-cost carriers that entice customers with their impossible-to-resist low fares.
Airline revenues from theatre and car hire lift off
The Financial Times
Ancillary revenues have soared in the decade to 2017. The top 10 global airlines, ranked by total ancillary revenue, increased them from $2.1bn to $29.7bn in the 10 years to 2017, according to IdeaWorksCompany (IWC) and CarTrawler. United Airlines led with $5.8bn, three-fifths of which came from what IWC calls “à la carte” sources, such as charges for extra bags, and travel retail commissions. The rest was frequent flyer programmes.
Top Ten Airlines Generated $29.7 Billion from Ancillary Revenue in 2017
CarTrawler-sponsored analysis shows ancillary revenue has gone beyond tilting the bottom line toward profitability and is now a core component of revenue for fiscally healthy airlines. Every year IdeaWorksCompany searches for disclosures of financial results which qualify as ancillary revenue for airlines all over the globe. Annual reports, investor presentations, financial press releases, and quotes attributed to senior executives all qualify as sources in the data collection process. These results are contained in the new report, 2017 Top 10 Airline Ancillary Revenue Rankings.
2017 Top 10 Airline Ancillary Revenue Rankings
CarTrawler-sponsored analysis shows ancillary revenue has gone beyond tilting the bottom line toward profitability and is now a core component of revenue for fiscally healthy airlines. Every year IdeaWorksCompany searches for disclosures of financial results which qualify as ancillary revenue for airlines all over the globe. Annual reports, investor presentations, financial press releases, and quotes attributed to senior executives all qualify as sources in the data collection process.
Top Frequent-Flier Programs for 2018
Wall Street Journal
The annual IdeaWorks survey of award availability shows that while overall ability to find flights at basic “saver” levels was about the same as last year at 25 airlines, American Airlines significantly relaxed its grip on award seats, especially to Hawaii and Europe. American had availability on 80% of the possible trips IdeaWorks checked, up from about 50% last year. That moved American from the lowest award-seat availability among U.S. airlines to No. 3 behind Southwest and JetBlue . United made changes, too, and its availability was up more than 10 percentage points to 76% overall.
It’s Getting Easier to Redeem Frequent Flyer Miles: New Study
It can be challenging to compare the world’s frequent flyer programs because all have their own rules, and each prices awards differently. Nonetheless, analyst Jay Sorensen of IdeaWorksCompany tries each spring to answer a simple question: “How easy is redemption for the basic and most popular reward type offered by the world’s top airlines?”
Airlines making more seats available to frequent flyer programs as competition rises
“There is a recognition among the big airlines in the U.S. that there’s got to be a minimum amount of reward seats available, and you’re seeing them all kind of drift towards a band close to each other in the charts,” said Jay Sorensen, president of IdeaWorks, an airline consulting firm near Milwaukee, which conducts the annual survey
American and Turkish Airlines Show Dramatic Increase in Reward Seat Availability with Southwest Staying on Top
The 9th annual Reward Seat Availability Survey ─ sponsored by CarTrawler ─ also finds survey newcomers Norwegian and China Eastern ranked in the top 8 among 25 airlines. The CarTrawler Reward Seat Availability Survey answers the question, “How easy is redemption for the basic and most popular reward type offered by the world’s top airlines?” The 25 carriers in the survey remained almost the same as 2017, with China Eastern, Norwegian, and WestJet as newcomers for 2018.
Click here for 2018 Worldwide Reward Survey FAQs.
Click here for infographic summary (JPG file) of key findings.
Why Airline Credit Cards Have an Enduring Appeal
New York Times
Mr. Sorensen, who runs the IdeaWorksCompany airline revenue consultancy, ran hundreds of simulations to come up with the following data for an award seat availability study he does with the rental site CarTrawler: The average value per mile redeemed for economy class travel ranges from 0.7 cents to 1.4 cents, depending on the airline. For long-distance business class seats, it ranges from 1.5 cents to 2.4 cents. So a 2 percent cash-back card would more often be a better value.
Airlines only beginning to tap into mobile growth potential
Few airlines are making the most of the bookings and ancillary potential of mobile platforms according to a report. Initiatives by those airlines at the lead show that mobile-first strategies can work exceptionally well. The IdeaWorks and CarTrawler report points to the rising trend of consumers preferring mobile interactions, with 3.5% more mobile phone accounts than there are people in the world.