Ancillary revenues on the up
Jay Sorensen charts the growth in ancillary revenue rates for airlines and what it means for the future. “My organisation, Ideaworks 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. This group is now a billion-dollar club with annual ancillary revenue from $1billion to $6.2 billion − which was top carrier United’s total
Airfares Are at a 7-Year Low, but Are You Getting a Deal?
US News & World Report
As Jay Sorensen, president of travel industry firm IdeaWorks, puts it: “I think consumers are getting a very good deal. And so are airlines.” When you look at the price of airfare over time, it’s a good value to the consumer. Unlike the years of economic strife for airlines in the wake of the terrorist attacks of Sept. 11, 2011, the industry’s profits continue to climb, enabling investment in improved products and aircrafts.
Ryanair’s ancillary revenue hits record level
Ryanair generated the sixth highest revenues globally from non-flight ticket items in 2015, according to a new report, which shows the top 10 world airlines pulled in almost $26bn (€23.6bn) in ancillary revenues during the year. In a newly published list of the top 10 ancillary revenue generating airlines from aviation research group IdeaWorks, the Dublin-based carrier ranks ahead of the likes of Lufthansa, Qantas, and EasyJet and is only dwarfed by US giants United Airlines, American Airlines, and Delta.
Analysis: Is the golden era of frequent-flyer benefits over?
Buying Business Travel
Social media comment from travellers who opt for the lowest fares and get the least rewards has, predictably, been highly critical; those with elite status who pay higher fares and get the best rewards, less so. But as the global airlines have shown with their egregious pursuit of ancillary fees, they’re very much focused on increasing revenues. Total ancillary fees levied by the world’s airlines last year reached a record US$59.2 billion according to the consultancy IdeaWorks, with US airlines alone accounting for a third of this revenue stream.
American and United Ready No-Frills Fares to Take on Discounters
Stung by competition from ultra-discount carriers, American Airlines Group Inc. and United Continental Holdings Inc. are striking back with cheap, no-frills tickets of their own. The strategy carries risks for the legacy airlines. American, United and Delta dominate the U.S. and have alliances with global carriers, advantages that would seem to negate the need to compete for the most price-conscious customer, said Jay Sorensen, a former Midwest Airlines executive who is now president of airline consultant IdeaWorksCompany.
The Best and Worst Frequent-Flier Rewards Programs for 2016
Wall Street Journal
For the third year in a row, free seats open for booking increased in the Switchfly Reward Seat Availability Survey, a comprehensive look at success at redeeming miles or points at the basic “saver” level. The survey found two seats available at the lowest mileage level on 77% of the booking queries made this year, up from 74% last year and 72% in 2014. “Overall, I think the consumer is being better served than the year before,” says Jay Sorensen, president of IdeaWorks, the consulting firm that conducted the study.
Redeeming Frequent Flier Miles Is Getting Much Easier
According to the Switchfly Reward Seat Availability Survey, which was released on Wednesday in conjunction with consumer-focused IdeaWorks, airlines will be offering their frequent fliers more reward seats. The survey looked at 7,000 flights, both domestic and international between June and October, and found that there were reward seats available on 76.6% of them. That’s the highest it’s been in the seven years that this survey has been conducted. “I would say it is getting easier, especially if you live outside the United States,” IdeaWorks president Jay Sorensen told CNBC.
For frequent fliers, using miles is getting easier
Frequent fliers will have an easier time using their rewards while booking travel plans for the summer and fall, thanks to more flights offering open reward seats. According to the latest Switchfly Reward Seat Availability Survey, released in conjunction with IdeaWorks on Wednesday, of more than 7,000 domestic and international flights that are scheduled from June through October, 76.6 percent offer reward seats.
How airlines squeeze more money out of us
New Zealand Listener
Charging for extras on top of an airfare was initially driven by low-cost carriers, but ancillary revenue is now an important earner for all airlines. US consultancy IdeaWorks Company forecasts it will increase 19% worldwide to US$59.2 billion in 2015, up 163% on five years ago.
Budget Fliers Should Love Airline Fees
Wall Street Journal
In 2014 airlines generated $38 billion in ancillary revenue, according to a study by IdeaWorks. That money keeps base fares low. And airline profits are far from outrageous. The average net margin for all scheduled U.S. carriers was 4.4% in 2014. Even in the first three quarters of 2015, after oil prices had plummeted, the average net margin was only 14%.