Airlines to charge for food, seats and other facilities to up ancillary income
The Star, Malaysia
EMIRATES, the world’s largest airline by international passenger traffic in 2015 which saw a 75% drop in profit for the six months to September this year, is now charging a seat assignment fee for its lowest price fares. Come Jan 11, British Airways will start charging for snacks and drinks for its European flights on economy class, complimentary now, on short-haul flights defined as five hours or less. This is part of the plan to grow ancillary income, which is non-ticket sources such as baggage fees, on-board food and services, seating, selling frequent flier miles to parties and even early boarding. A recent report by ancillary revenue consultancy, IdeaWorks, and online car rental booking company, CarTrawler, predicts that ancillary incomes will reach US$67.4bil this year. This is a 200% increase from US$22.6bil in 2010. It based its projections on the ancillary revenue activity of 178 global airlines.
Airlines expected to rake in $US67.4b globally from extra lucrative services
National Business Review – New Zealand
The amount airlines make from charging travellers for extras such as in-flight food and drink or selecting a seat with more leg room, is forecast to rise by 13.8% this year to $US67.4 billion. The projection, from airline ancillary revenue consultancy IdeaWorks and online car rental booking company CarTrawler, covers 178 airlines. They predict the additional lucrative income airlines worldwide make from travellers has risen nearly 200% since 2010 and now accounts for an estimated 9.1% of airline revenue globally.
Airline Industry Q&A: Jay Sorensen of IdeaWorksCompany
Spotlight 2017: Jay Sorensen, an expert in the airline and aviation trends, shares what we can expect for the industry next year. To find out more about what’s on the horizon for the airline industry, we spoke with Jay Sorensen, who closely monitors market trends and is president of IdeaWorksCompany, a consulting firm that specializes in the airline and aviation industries.
Innovaciones en comercialización para viajeros aéreos y potenciar beneficios
Expreso – Spain
English headline translation: Innovations in marketing for air travelers and enhance benefits. El último informe de IdeaWorksCompany proporciona varios ejemplos, que cubren tanto las aerolíneas tradicionales y las compañías aéreas de bajo coste como los proveedores en todo el mundo, para demostrar los métodos únicos que generan más ingresos a partir de la venta de billetes de avión y actividades generadoras de ingresos por servicios complementarios
The Best and Worst Hotels for Cashing in Rewards Points
The Wall Street Journal
The top performer in a new comparison of hotel loyalty program payback is Wyndham Hotel Group, which revamped its Wyndham Rewards loyalty program 18 months ago to make it a lot more beneficial to travelers. Consulting firm IdeaWorks, which specializes in loyalty programs, compared earning and burning points at six different hotel chains and found average payback at Wyndham is nearly 14%. For every $100 you spend at Wyndham, Ramada, Days Inn, Wingate and other hotels, you can get back $13.60 worth of stays on points.
Airline Fees: The Naked Truth
Airline fees remain a “pain point” for many travelers, and the pain is getting worse. Despite all the focus, however, you still see some public confusion. The latest exhaustive report (104 pages!) from IdeaWorks presents a good starting point for a dispassionate assessment of the realities and myths of airline fees.
Bonus income for airlines
The Irish Times
Ancillary revenue is becoming more and more lucrative for airlines, with $40.5 billion collected by 67 airlines last year, from baggage fees, food, shopping, hotels, car rental, and frequent flyer incentives.
US airlines lead in driving ancillary revenue
Travel Weekly UK
A total of $40.5 billion was made in ancillary revenue, comprising 8.7% of total sales, by 67 airlines covered in a new survey. Revenue from ancillaries delivered $6.2 billion for United Airlines, represented 36.4% of sales for Wizz Air, and $51.80 per passenger carried by Spirit Airlines in the US. The study covers airlines that disclosed revenue in 2015 financial filings from activities such as frequent flier miles sold to partners, fees for checked bags, and commissions from car rentals.
Domestic Airlines add tailwind to ancillary business
The Business Standard – India
According to a survey by US-based consultancy firm IdeaWorks Company, airlines globally earned $26 billion in ancillary revenue in 2015 with US carriers United, American and Delta topping the list. According to the survey, US-based low-cost airline Spirit earned about 43.4 percent of all its revenue from ancillary sources, followed by Allegiant Air and Wizz Air, which earned 37.6 percent and 36.4 percent, respectively, of their revenue from ancillary sources
Airfare price revolution
The West Australian
In its first annual report on the subject, Ideaworks in 2008 estimated airlines around the world were charging an estimated $US13.5 billion a year in ancillary extras. By 2015, that figure had soared to $US59.2 billion, a rise of nearly 450 per cent, with the figure still increasing by around 20 per cent a year. But now, with the oil price below $US50 a barrel, there’s no going back to the old system of inclusive fares. Airlines have sold a la carte pricing to their customers as increasing choice and, in America, customers have responded by awarding airlines with the highest ancillary revenue rates the highest profitability and growth.