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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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Wizz Air Tops Ancillary Revenues Chart as Pandemic Slashes Fares

September 14, 2021

Travel Weekly – UK

Rates for add-on services such as checked baggage and assigned seating were higher for airlines as the pandemic forced fares to be slashed last year, new data reveals.  Wizz Air emerged as the top carrier out of 27 airlines in terms of ancillary revenue as a percentage of total revenue in 2020.  The result came at a time when passenger traffic and sales fell by more than half.  Four airlines managed to surpass the 50% threshold for ancillary revenue, led by Wizz Air, up by more than ten percentage points over 2019 to 55.9%.  Ryanair was in seventh position at a level of 36.7%, a year-on-year rise of 2.2 points.  The results are published today (Tuesday) in the CarTrawler Yearbook of Ancillary Revenue by data firm IdeaWorksCompany.

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Consumer Groups Pressure White House Over Family Seating on Planes

September 13, 2021

Travel Pulse

Consumer advocates are pressuring the Biden Administration to have the Department of Transportation revisit its decision on how families are split up while traveling on airplanes. Meanwhile, consumer advocates aren’t the only ones who say airlines need to do more to put families at ease. A study released in June by the firm IdeaWorks, which consults airlines on how to boost ancillary revenue, noted the rapid embrace of seat assignment fees by global, full-service carriers in recent years. IdeaWorks president Jay Sorensen also pointed out that charging for seat assignments can cause consumer confusion, especially as it relates to family travel. Often, he added, airlines do a poor job of disclosing their rules for paid seat assignments, including cancellation and refund policies. “I am an advocate for ancillary revenue, but it needs to be ancillary revenue done smartly and correctly,” Sorensen said. “Too often, in their rush for ancillary revenue, airlines are remiss in dotting every I and crossing every T.”

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La Pandemia se Ceba con las Aerolíneas de Bajo Coste

August 23, 2021

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.

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Hotels Try Out Fees for Using the Pool and Checking In Early

August 17, 2021

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.

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Asian Carriers Dominated 2020 with China Southern Bumping American Airlines from Top Slot

August 17, 2021

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.”

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Will Airport Mobile Ordering and Deliveries Have a Future Post-Pandemic?

August 13, 2021

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.

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Airline Comments On Business Travel Encouraging, But Ignore Some Realities

August 2, 2021

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.

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Fringe Benefits Take Centre Stage

July 1, 2021

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.

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Why Airline Rewards Programs Are Trying Harder to Keep You Loyal

May 5, 2021

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.

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