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Covid-Era Travel Risks Are Changing: What to Consider So You Don’t Get Stranded

December 8, 2021

Wall Street Journal

Sudden border closures. Quarantines. Given the new risks, the days of improvised trips for business or pleasure have become endangered in the Covid-19 era.  The new Omicron variant did more than prompt governments to quickly close borders and tighten Covid-19-related travel restrictions. It signaled that health disruptions are here to stay as a normal part of travel concerns, right along with storms, strikes and terrorism.  “The casualness of travel is gone. I don’t think it’s coming back,” says Jay Sorensen, president of travel consulting firm IdeaWorksCompany.  He thinks 2019 will be viewed as the high-water mark for jumping on a plane spur-of-the-moment and taking a trip to another continent without care or concern.  Mr. Sorensen issued a report last week to travel-industry clients suggesting that airlines, hotels and others are going to have to bear more risk of disruption if they want people to keep traveling. Change-fee penalties and nonrefundable reservations got temporary waivers during the pandemic, but they have already started creeping back in, making the consumer largely responsible for losses from unexpected disruptions.  Instead, he thinks travel companies are going to have to bear more risk to entice travelers, either by making reservations refundable or by providing insurance that will accommodate health risks and fears at airline expense.

American Express Global Business Travel Nears $5.3 Billion Spac Deal

December 3, 2021

The Street

That may be an optimistic view as a recent analysis of data from business leaders done by the Wall Street Journal suggests that business travel may drop 19% to 36% permanently.  “Brick-and-mortar retail has been devastated by ecommerce and I think this is a parallel story,’’ Jay Sorensen, president of IdeaWorks, an airline-industry consulting firm, told the paper.  Sorensen was a member of the panel consulted by The Journal along with former Spirit Airlines Chief Executive Ben Baldanza, an unidentified current Jetblue (JBLU) – Get JetBlue Airways Corporation Report board member, and the consumer advocate Charlie Leocha, president of passenger-advocacy organization Travelers United.

Six Ways the Airline Business has Changed – a Report by IdeaWorksCompany

November 30, 2021

Future Travel Experience

There has been much debate for years about identifying the key feature of the air travel product. The pandemic effectively delivered an answer – it’s the destination that matters most, highlights a new ancillary-focused report by aviation and travel business consultancy IdeaWorksCompany and its sponsor, CarTrawler. The report is written by IdeaWorksCompany President Jay Sorensen, who will be the Ancillary Ambassador for the upcoming Ancillary conference track, taking place at FTE Global 2021 in Las Vegas on 7-9 December.

Low-Cost Carriers Fly Above Covid-19 Turbulence

November 24, 2021

Adweek

“The moment really belongs to low-cost carriers,” said Jay Sorensen, president of international travel consulting firm IdeaWorksCompany. “All of this is pointing toward a world in which all airlines will compete more heavily for leisure travelers. Low-cost carriers are already there, in terms of carrying those passengers, so I think that carriers such as Spirit, Allegiant and Frontier are perfectly positioned for the future.”

Reprise du Trafic Aérien: les Revenus Annexes en Hausse de 13% en 2021

November 18, 2021

Air Journal (France)

Translated:  Resumption of Air Traffic: Ancillary Revenues Up 13% in 2021

La dernière étude de CarTrawler et IdeaWorksCompany montre que les revenus annexes ponctionnés par les compagnies aériennes dans le monde devraient passer à 65,8 milliards de dollars cette année. Selon l’étude publiée la semaine dernière, les revenus complémentaires des 109 compagnies aériennes étudiées par CarTrawler et IdeaWorksCompany passeront en 2021 de 58,1 à 65,8 milliards de dollars dans le monde, soit une augmentation de 13%. Ces revenus accessoires proviennent des activités et services qui génèrent des flux de trésorerie pour les compagnies aériennes « au-delà du simple transport de clients de A à B » : ils comprennent les commissions perçues sur les réservations d’hôtels, la vente de miles de voyage aux partenaires et des services à la carte − offrant plus d’options pour les passagers et plus de revenus pour les compagnies aériennes Cette estimation reflète les gains de trafic passagers en 2021, avec le maintien du support des consommateurs pour les services à la carte et des cartes de crédit comarquées, précise le communiqué.

Airline Ancillary Revenue Begins Recovery With a 13% Increase to $65.8 Billion for 2021

November 12, 2021

Travel Daily News

CarTrawler, a leading provider of online car rental distribution systems, and IdeaWorksCompany, the foremost consultant on ancillary revenue, project airline ancillary revenue will increase to $65.8 billion worldwide in 2021, compared to $58.1 billion in 2020. The CarTrawler Worldwide Estimate of Ancillary Revenue represents an increase built upon 2021 passenger traffic gains, with consumer support for a la carte services and co-branded credit cards holding steady.

International Travel Comeback Grounded By Pandemic Realities

November 11, 2021

Adweek

When British Airways Flight BA1 left London and touched down at New York’s John F. Kennedy airport on Nov. 8, it was supposed to mark a return to normalcy for the entire travel industry after the widespread disruption caused by Covid-19.  As the world has discovered repeatedly during this pandemic, even a transatlantic flight can’t span the distance between this moment and “normal.”  “If you’re British Airways or Air France or Singapore Airlines, it has been a terrible two years,” said Jay Sorensen, president of international travel consulting firm IdeaWorksCompany. “There’s a double whammy: Your international cross-border traffic has been absolutely fried by border closures, and your premium cabins are empty because there’s no business travelers.”

Travel Brands Revamp Loyalty Programs to Keep Customers Engaged

October 26, 2021

Global Traveler

“Most frequent-flyer programs or loyalty programs are geared toward high-repeat travelers, which are usually business travelers,” said Ben Baldanza, an economist and former CEO of Spirit Airlines (2005–2016). “If business travel reduces, changes, and people work at home or meet using video, not earning miles on room nights, it’s harder to earn a free flight or hotel room. If consumers have to wait years to get their rewards, loyalty reduces.”  Jay Sorensen, president, IdeaWorksCompany, concurred: “At the present, business travel is largely missing. I would guess business travel is off 80 percent. That’s a huge number, so that is an uncertainty. Frequent- flyer programs are for business travelers, primarily.” IdeaWorksCompany specializes in brand development and developed frequent-flyer programs for international airlines.  “When the airline is uncertain what’s going on, it’s really hard to reengineer the program to perform for whatever the new environment is you end up with,” Sorensen continued. “What’s been happening with frequent-flyer programs is they want to keep you engaged, so they’re not allowing your miles to expire or your status to expire.”

Why Airlines Need Business Travel to Return

October 8, 2021

The Hustle

An illustrated explainer on the decline of business travel — and how it could wreak havoc on your cheap economy tickets.

Airlines Saw Boost in Revenue from Ancillaries in 2020

September 14, 2021

Phocuswire

While air passenger traffic and revenue were down more than 50% in 2020 due to the impact of COVID-19, several carriers got a boost in revenue from their ancillary products and services. According to the 2021 CarTrawler Yearbook of Ancillary Revenue, produced by IdeaWorksCompany, Allegiant, Spirit, Viva Aerobus and Wizz Air all earned more than 50% of their total revenue from ancillaries last year. Wizz Air is in the top stop – with ancillary revenue accounting for 55.9% of its total revenue, which the report says beats the prior record of 47.6% from Viva Aerobus in 2018. The report includes data voluntarily disclosed by 75 airlines around the world. Seventy-three of those airlines were part of the prior year’s report, and for them, total ancillary revenue was down $34.7 billion in 2020.

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