The latest update on ancillary revenue from Wisconsin-based consulting group IdeaWorksCompany projects that it will drop by almost 50% this year to $58.2 billion worldwide, wiping out five years of annual gains. The just-released data are based on a larger list of 134 airlines—versus the 81 that reported for the CarTrawler 2020 Yearbook – in order to provide a better global projection. Importantly, while ancillary revenue has fallen, its share of airline income has actually increased this year, indicating that the collapse in overall sales for carriers has been far worse. Airlines will therefore be looking more keenly at ancillary revenue streams going forward. These streams are defined by IdeaWorks as any revenue “beyond the sale of tickets that is generated by direct sales to passengers, or indirectly as a part of the travel experience.”
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Wall Street Journal
IdeaWorks priced award tickets at each airline’s 10 busiest domestic routes and found the highest average price among the six biggest U.S. airlines was 21,800 miles at American. In IdeaWorks’s 2019 survey, which covered May-October travel dates, American averaged 23,700 miles, or 9% more. The gap at United was far wider: The survey for travel dates this November, including around Thanksgiving, averaged 12,833 miles, compared with an even 25,000 miles in the 2019 survey.
The latest airline ancillary revenue study reveals that 76 carriers made almost $52.7 billion in extra revenue last year. The CarTrawler Ancillary Revenue Yearbook, compiled by IdeaWorksCompany, highlights the top airlines according to total ancillary revenue and ancillary earnings as a percentage of total revenue. American Airlines took the top slot at $7.2 billion, followed by United Airlines at $5.8 billion and Delta at $5.5 billion. The top 10 carriers accounted for just over $35 billion of ancillary revenue and earnings from frequent flyer programs represents 55% of that total.
TR Business Travel
IdeaWorks Company has released a complimentary 17-page report designed to encourage confidence in travel as a result of the current climate. Sponsored by CarTrawler, the ‘Flight Plan 2020: Creating Traveler Confidence in the time of COVID’ report identifies 10 ways that airlines are assisting the recovery, with specific examples from the likes of Emirates, Etihad Airways, Korean Air, United Airlines, Xiamen Airlines and Hilton.
Travel Vision – Japan
This article appears in Japanese. This is a summary translation: According to a survey released on February 18 by CarTrawler, a technology platform in the B2B field of travel, airlines earned ancillary revenue of US $ 36.7 billion to US $ 75.6 billion in the four years from 2015, it increased 106%. The survey was conducted in collaboration with IdeaWorksCompany, which provides consulting services on airlines’ ancillary revenues, and generated revenues from charges other than the airfare itself, such as checked baggage charges, seat selection, paid meals, priority boarding, and in-flight entertainment.
A regional breakdown published by IdeaWorksCompany and CarTrawler shows that the Europe/Russia region leads the world when it comes to extracting revenue for extras. IdeaWorks looks regularly at what it calls “a la carte” extras such as fees for checked baggage, assigned seats buy-on-board meals, early boarding and inflight entertainment. It found Europe/Russia accounted for $US31.5 billion of a la carte revenue of an estimated global total of $US75.6 billion and that the figure had increased by 122 percent since 2015. The result was mainly due to big penetration of the European market by low-cost-carriers but legacy carriers such as SAS, Aeroflot, and Lufthansa were also increasingly jumping on the bandwagon.
According to consultancy Idea Works and ground transport company Cartrawler, airlines took $75.6 billion in ‘a la carte revenue’ globally in 2019. This was led by European airlines, which made $31.5 billion, followed by Asia Pacific airlines at $21.1 billion, Canadian and US airlines at $14.8 billion, African and Middle Eastern airlines at $5 billion, and Latin American and Caribbean airlines at $3.2 billion. However, Asia Pacific airlines reported the highest growth at 158 per cent year-on-year, above Europe at 122 per cent.
The Best Seats Airlines Hold Back from Frequent Fliers
Wall Street Journal
Consulting firm IdeaWorks did 3,600 searches for two business- or first-class awards on 18 different airlines. It found Turkish Airlines had the highest availability at 98% and Scandinavian Airlines the lowest at 2%. United had two seats available at the Saver level on only 4% of the queries made. Jay Sorensen, president of IdeaWorks, calls that result “a heart-stopping statistic.” Delta was only slightly better, at 14%, while American came in at a somewhat more respectable 28%. Bottom line: The ability for most members of frequent-flier programs at United, Delta and American “to take a business-class trip to Europe has gone,” Mr. Sorensen says.
Overhead bins are a battleground. Here’s what airlines are doing to fix the problem they caused.
“We’ve been living with the legacy of that since then,” says Jay Sorensen, president of IdeaWorksCompany, which consults with airlines on fees. Last year, according to an estimate from the consultancy, global airlines charged more than $28 billion in baggage fees. That includes checked luggage, charges for bags that are extra-heavy or oversize and some carry-on bags. That total is up from $13.4 billion in 2014.
Why Are Airline Websites So Bad at Inspiring Travel?
Airlines have a problem: They are pretty good at selling flights, but they fail again and again when it comes to inspiring travel, and selling related products, from hotels to vacation packages, and bottles of booze. Enter Jay Sorensen, a former director of marketing at Midwest Airlines, a consultant, and the president of IdeaWorksCompany, which recently published Finding the Path to Fix Airline Retail.