Articles about IdeaWorksCompany

La Vanguardia

Translated: The pandemic is primed with low-cost airlines

La covid ha trastocado el mercado aéreo: estos son los ganadores y perdedores. La pandemia ha trastocado el dominio del mercado aéreo y ha modificado los equilibrios de poder en la industria. El terremoto económico del 2020 no ha afectado a todas las compañías por igual y ha dejado claros vencedores y perdedores que ahora encaran la recuperación con gran diferencia de fuerzas. Entre las diez aerolíneas que más ingresos han perdido en todo el mundo sobresalen tres europeas, dos de ellas con una fuerte presencia en los aeropuertos españoles, especialmente el de Barcelona. Así lo recoge el informe sobre el estado de las aerolíneas en el mundo publicado esta semana por la consultora IdeaWorksCompany, el análisis más exhaustivo hasta la fecha del impacto de la pandemia en el tráfico y la facturación de las compañías.

Wall Street Journal

One of the largest U.S. hotel owners is experimenting this year with a new business strategy: Charge guests for most services and amenities, just like in the airline industry.  In 2019, airlines world-wide collected $75.6 billion in a la carte revenue, more than doubling what they collected in 2015, according to a study from the consulting firm IdeaWorksCompany and CarTrawler, a firm that works with car-rental and travel companies. A la carte revenue included fees for checked baggage, assigned seats, onboard meals and entertainment.

Travel Daily News Asia

Datalex, a market leader in digital commerce for retail travel, and IdeaWorksCompany, the foremost consultant on ancillary revenue, have released the second edition of The Datalex Big Book of Airline Data by IdeaWorksCompany. The 2021 edition provides a world of airline industry data collated by alphabetical order, size, airline type, region, and alliance. The 78-page “Big Book” is available free of charge via download at Datalex.com and IdeaworksCompany.com.  “Datalex is delighted to sponsor the second edition of the Datalex Big Book of Airline Data by IdeaWorksCompany,” said Alison Bell, SVP Global Sales & Marketing at Datalex. “This edition offers particularly interesting data comparison points between 2019 and 2020, a year like no other, in which airlines had to take unprecedented actions to survive. We applaud their resilience and hope that this Big Book will be a useful resource for all those interested in our industry.”

Skift

Some may wonder if airport mobile ordering and delivery is a pandemic fad or a trend. The answer will come quickly for anyone who’s spent an extended amount of time in airports. It’s only a matter of time before competitors start popping up. “There is a big future for online ordering of food within the airport environment,” said Jay Sorensen, president of IdeaWorksCompany, a product, partnership, and marketing practice. “The low profit margin of food, and the complexities of holding fresh food, dissuades airlines from making major effort here. That food is already available on airport concourses, and freshly prepared, is huge advantage for on-airport sources,” Sorensen adds.

Forbes

People travel for business for a number of reasons. Often, when people think of business travel, they equate this to sales calls or relationship building. This is a common and important reason, and represents the single largest category of pre-pandemic travel according to an IdeaWorksCompany report. Yet, this category still accounts for only 35% of business travel. This is the amount that best aligns with people going to back into offices and with companies trying to re-build relationships with their customers.  The same report shows that trade shows and conventions make up another 20% of the travel, as do intra-company meetings. The balance comes from professional services, IT/technical services, and commuting by air. The likelihood that each type of business traveler will return at the same rates is small. All of some categories may return in 2022, but it doesn’t seem likely that everything will. Return to offices, something highlighted by all four airlines, is not especially correlated with running trade shows and people wanting to attend them, for example.

Low Fare and Regional Airlines Magazine – LARA

Passenger numbers have plummeted, ticket prices are falling but per-passenger spend on ancillaries is up. So, is this the big opportunity for low-airfare airlines to lift their game and broaden their horizons to capture more of a traveller’s spending? Michael Doran mines the data.  The 2020 CarTrawler Yearbook of Ancillary Revenue by IdeaWorksCompany reported 2019 global ancillary revenues of US$109.5 billion and per-passenger spend at $23.91. Their estimate for 2020 is for revenues around $58.2bn and per-passenger spend of $25.90, although a third-quarter 2020 survey showed spending of $26.91. IdeaWorks President Jay Sorensen says he is currently collecting the 2020 data, and without revealing too much, he took LARA through some initial findings of the 2021 yearbook. He believes Frontier Airlines will be the top carrier globally on a percentage basis and that there is a shift in revenues from fares to ancillaries, particularly in the case of ULCCs.

Wall Street Journal

While top-tier travelers fervently covet their status, many travelers have found that status isn’t the golden goose it used to be, says Jay Sorensen, president of IdeaWorksCompany, a Shorewood, Wis.-based consulting firm specializing in loyalty programs.  Being in the lower or middle rungs of the status ladder no longer wins upgrades, since airlines are selling more first-class seats at discounted prices. You can earn early-boarding and baggage-fee waiver perks just by having an airline’s credit card.  In addition, the programs have become significantly more complex, with thresholds built around complicated measures like elite-qualifying points.

Inflight Magazine

Henry Canaday delves into the creative measures that helped lift airline revenues despite the collapse of passenger air travel.  The latest report from IdeaWorks and CarTrawler estimated that carriers grossed US$58.2 billion in ancillary revenue in 2020, one of the few bright spots in a terrible year. Per-passenger ancillary revenue actually rose more than 13% from the previous year. IdeaWorks CEO Jay Sorensen ticks off some of the most popular ancillary products: co-branded credit cards (from which airlines get paid for miles), seat assignments, large bag fees, checked bags, change fees and preordered meals. One reason ancillaries rose in a disastrous revenue year was that airlines were discounting at least some fares so steeply that passengers could afford to splurge on extras, Sorensen argues. Business travellers almost disappeared for a while, and cabins were full of first-time and inexperienced travellers. “Low fares drew out a new
category of passengers.”

Wall Street Journal

“You have travel returning, pent-up demand and an oversupply of miles,” said Jay Sorensen, president of airline consulting firm IdeaWorksCompany. “We are set for a devaluation.”  Frequent-flier programs’ job is to make fliers spend more than they otherwise would. A 2011 paper found they account for a 5% to 6% price premium.  Airlines typically list dollar and points prices for flights. Based on the exchange rate, IdeaWorksCompany calculates that each of Delta’s SkyMiles is worth roughly 1 cent, meaning rational customers should never pay more than that for a mile.

Washington Post
“We are now going on a year where many corporations have cut business travel almost completely,” said Jay Sorensen, president of IdeaWorks, an aviation industry consulting firm. “That’s never happened before. Any time you reduce travel for that length of time, it has staying power.”  International business travel is most at risk, Sorensen said, as outbreaks have made border-shutting more common. “I sense this is an end of an era in terms of the ease and cheapness of long-haul travel,” he said.