Best frequent flier rewards: From magic scarves to koala cuddles
It used to be that frequent flier rewards were pretty standard. Not so these days: airlines are instead trading in magical scarves, Justin Timberlake concert tickets — even marriage proposals. “There’s a high amount of demand for airline seats. Rather than frustrate members by shutting them out, airlines figure, why not offer them an award that is always available,” notes Jay Sorensen, president of IdeaWorksCompany, which recently released a report on the weirdest and most wonderful frequent flier awards.
Why Smiling Flight Attendants Need to Be Part of Airlines’ Fee Strategies
IdeaWorksCompany.com president Jay Sorensen says poor management of relations between airline executives and employees is a major reason behind many airlines’ struggle to get the most out of ancillary revenue initiatives. An IdeaWorks report, “Boost Ancillary Revenue Though Empathy, Competence and Kindness,” details examples of airlines taking steps to empower employees to drive ancillary sales.
Report urges airlines to be nice
A new study released Monday offers airlines, an often-hated industry, a simple secret to further their success and pad their bottom lines: Be nice. “Call it a back-to-basics mantra, but sometimes in a technology-riddled world, we all can benefit from a few therapeutic reminders to reset our moral compasses,” says the IdeaWorksCompany report, “Boost Ancillary Revenue Through Empathy, Competence and Kindness.”
Delta Leads Big 3 Airlines, Moves Jan.1 to Price-Based Frequent Flier Awards
In a field “where there’s a lot of motivation to keep things the way they are, give kudos to Delta because awarding miles on the basis of distance flown is a horribly imprecise way for an airline to motivate people to spend more and to align the finances of the frequent flier program with the finances of the airline,” said Jay Sorensen, president of IdeaWorks.
Los Angeles Times
Airline passenger fees may soon rise on peak travel days
The next frontier in airline fees — those pesky payments for baggage checks and seat upgrades — may be higher charges during peak demand periods. In other words, the $25 you now pay to check a bag may go up to $30 if you insist on flying during busy travel periods such as the days around Christmas or Labor Day. The prediction that airlines will start to adjust fees based on demand comes from Jay Sorensen, a noted consultant for the industry on what air carriers like to call “ancillary fees.”
Delta expands bare-bones ticket option
Delta is expanding a new variety of stripped-down, bare-bones fares. The “basic economy” fare gets you a confirmed seat on the plane, but does not allow you to pick the seat in advance and does not allow any flight changes, even if you’re willing to pay a change fee. You may also end up literally at the back of the line, as the last to board the plane. Airline consultant Jay Sorensen says Delta’s goal is “to stop Spirit Airlines or any other startup” from moving in on Delta markets. “We’re entering an era in which startups will begin to occur again,” due to low fuel costs and airline consolidation, he said.
Los Angeles Times
Airlines warned not to be “greedy” with passenger fees
The world’s airlines are expected to collect $28.5 billion in passenger fees in 2014, a 20% increase over last year, according to a new study. The increase is no surprise as the revenue airlines collect from bag fees and charges for food, entertainment and other onboard extras have more than doubled since 2010. But airlines can’t get too greedy with such fees. That warning came from Jay Sorensen, president of IdeaWorksCompany, the Wisconsin-based company that publishes the annual revenue estimate and advises airlines on ways to boost such income.
We’re Paying an Extra $5 Billion in Airline Fees This Year
A new study from the airline consultancy firm IdeaWorksCompany projects that ancillary revenues—money generated for sales above and beyond the base price of flights—will hit $50 billion (OK, $49.9 billion) for carriers worldwide in 2014, up from an estimated $43 billion last year and $36 billion in 2012. For 2014, $21.4 billion of the total is expected to come from “frequent flier and commission-based” revenues, which include the sale of frequent flier miles and sales commissions from hotels, rental cars, and travel insurance booked through the airline.
New York Times
Big-Ticket Fliers Poised to Gain Still More Miles
“In an industry where everything is plain vanilla, Delta and United have tossed a bunch of strawberry into the pile,” said Jay Sorensen, founder of the airline marketing company IdeaWorks, based in Wisconsin. Keeping with the ice cream analogy, Mr. Sorensen called the move a “delicious lab experiment” because so much of what will happen is unknown. Airlines around the world, Mr. Sorensen said, are “about to see the power of loyalty on the top and the bottom end.”
Brazilians Stuff Suitcases in Last Free Perk for Fliers
In other parts of the world, airlines are getting even stricter about luggage, from carry-ons to suitcases bound for the cargo hold. That means planes flying outside Brazil are lighter and more fuel-efficient, said Jay Sorensen, a former Midwest Airlines executive who now runs aviation consultancy IdeaWorksCompany.com in Shorewood, Wisconsin. In Brazil, “they’re messing with the economics of airlines,” Sorensen said in a telephone interview. Brazil risks bankrupting its airlines by dictating what they can charge for, he said.