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The latest from IdeaWorksCompany.

Listed below are the most recent posts to the website.  Click on any item title or button to access our latest reports, press releases, and news items.  Or use the menu to the right to browse news, reports, articles featuring IdeaWorksCompany research, and press releases.

Frequent Flyer Programs Deliver Lower Reward Value in the Era of Basic Economy Fares and Co-Branded Cards – Press Release

April 2, 2024

The 2024 Reward Seat Availability Survey reviews Alaska, American, Delta, JetBlue, Southwest, and United flight rewards. The IdeaWorksCompany Reward Seat Availability Survey answers the question, “How costly is points redemption for the most popular basic reward type offered by top US airlines?” Key overall findings include:

• Prices of rewards (in miles or points) has increased significantly since 2019 and, moreover, by 7 points above the rate of inflation for the same period.
• Reward payback for 2024, which measures the reward value provided per dollar spent on base fares, dropped overall more than half from 2019.
• Basic economy fares are disrupting the value provided by frequent flyer programs through policies which reduce or eliminate mileage/points accrual

This year’s survey assesses six US airlines and repeats the same methods used 5 years ago in 2019. The IdeaWorksCompany Reward Seat Availability Survey is based upon 600 booking and fare queries made by the IdeaWorksCompany at the websites of six frequent flyer programs to assess low-priced everyday reward seat availability. Lowest-price rewards are an important benefit for most members and the primary topic of this survey.

Branded Fares Dominate Ancillary Revenue for New Airlines All Over the World – Press Release

March 19, 2024

New entrant airlines provide a unique marketing lesson because they begin with an empty canvas. In theory, start-up teams scan the competitive environment and select features they believe will produce success. Today, new airlines overwhelmingly rely upon branded fares as their primary ancillary revenue method. This is a significant change from ten years ago when these were much rarer. Branded fares provide the best ancillary revenue results and are based upon marketing research which has shown many consumers prefer a “middle choice” rather than opting for the lowest or highest price.  Seven Young Airlines Try Their Ancillary Revenue Wings was issued today as a 16-page report. It provides six recommendations for boosting ancillary revenue through the branded fares method.

Seven Young Airlines Try Their Ancillary Revenue Wings – Report

March 19, 2024

CarTrawler-sponsored analysis reviews the ancillary revenue strategies of seven new entrant airlines: Akasa Air, Air Japan, BeOnd, Bonza, Greater Bay Airlines, Jetlines, and Norse Atlantic.  New entrant airlines provide a unique marketing lesson because they begin with an empty canvas. In theory, start-up teams scan the competitive environment and select features they believe will produce success. Today, new airlines overwhelmingly rely upon branded fares as their primary ancillary revenue method. This is a significant change from ten years ago when these were much rarer. Branded fares provide the best ancillary revenue results and are based upon marketing research which has shown many consumers prefer a “middle choice” rather than opting for the lowest or highest price.  Seven Young Airlines Try Their Ancillary Revenue Wings was issued today as a 16-page report. It provides six recommendations for boosting ancillary revenue through the branded fares method. The report describes how each carrier generates ancillary revenue by highlighting their booking path features and unique retail methods

Global Bag Fee Revenue Rises to $33.3 Billion – Press Release

February 20, 2024

CarTrawler 2023 Global Estimate of Baggage Fee Revenue reveals 15% increase from 2022 figure of $29 billion.  IdeaWorksCompany, the foremost consultancy on airline ancillary revenues, and CarTrawler, leading global B2B provider of car rental and mobility solutions to the travel industry, recently estimated ancillary revenue at $117.9 billion worldwide for 2023. This CarTrawler Global Estimate of Baggage Fee Revenue identifies baggage as a $33.3 billion component and provides a summary of baggage fee policies for 20 top airlines.

Click here to download the graphic from the press release as a JPG file.

 

US Major Airlines Receive More Than $25 Billion in Ancillary Revenue from Co-Branded Cards – Press Release

January 23, 2024

CarTrawler sponsored research reveals US major airlines netted 32% of global ancillary revenue and nearly 68% of frequent flyer and commission-based revenue.  Following further analysis on the 2023 CarTrawler Worldwide Estimate of Ancillary Revenue, IdeaWorksCompany found that US major airlines, defined as Alaska, American, Delta, Hawaiian, Southwest, and United, achieved ancillary revenue results far above their estimated 24% global traffic share. This is largely due to the outsize share of frequent flyer cash from their co-branded credit card programs. Traditional airlines, the largest category by number, came in at $42 billion, while low cost carriers (both categories) posted combined ancillary revenue of $38.1 billion, which represents a 2nd place position.

Click here to download the graphic from the press release as a JPG file.

Premium Travel: The Upper Middle Class Seat Priced for the Upper Middle Class – Press Release

December 5, 2023

Long Haul Premium: Upper Middle Class ─ for the Upper Middle Class was issued today as a 14-page report. It includes the results of a review of 20 leading global network carriers regarding their long haul premium economy cabins. The report describes the trends which support the potential for premium economy to someday deliver more profits than business class:

• Loss of work-related traffic of around 25% since the pandemic. Airlines across the world are eager to find an attractive replacement for this missing revenue.
• The upper middle income market represents 32% of US households. This high spending group of nearly 42 million households has income in excess of $7.6 trillion.
• Major US airlines are growing premium seat capacity by 25% to 75%. Delta alone has added 15,000 seats to its daily schedule since the pandemic.
• Premium Select can offer more potential than business class. Analysis of Delta’s A330 aircraft revealed more revenue potential than business and economy.

Airline Ancillary Revenue Reaches Record $117.9 Billion Worldwide for 2023 – Press Release

October 31, 2023

The CarTrawler worldwide estimate posts 7.7% increase above the previous record of $109.5 billion in the pre-pandemic year of 2019.  CarTrawler, the leading B2B provider of car rental and mobility solutions to the global travel industry, and IdeaWorksCompany, the foremost consultant on ancillary revenue, project airline ancillary revenue will increase to $117.9 billion worldwide for 2023, compared to $102.8 billion for 2022 and well above the previous $109.5 billion record in 2019. The CarTrawler Worldwide Estimate of Ancillary Revenue represents an increase largely built on 2023 passenger growth and increasing market share gains by low cost carriers.

Click here to download the two graphics from the press release as a JPG file.

2023 CarTrawler Yearbook of Ancillary Revenue – Report

September 27, 2023

The 2023 edition of the CarTrawler Yearbook of Ancillary Revenue by IdeaWorksCompany, released today, describes the 2022 ancillary revenue activities and results for 65 airlines and provides an assessment for the industry as a whole.  This annual publication provides the best single source of information and intelligence on ancillary revenue, a la carte services, and commission-based travel products, for the world’s airline industry.  Ancillary revenue for each airline is presented as total revenue, a percentage of airline revenue, and on a per passenger basis.  The results reflect 2022 disclosed financial activity. The narrative for each airline features disclosures made in financial filings, investor presentations, historical results for 2019-2021, and information gathered from websites. The publication has 103 pages.

The Yearbook of Ancillary Revenue is now available for sale in the store.

Ancillary Revenue Increases 51% for 61 Airlines in 2022 – Press Release

September 27, 2023

The 2023 edition of the CarTrawler Yearbook of Ancillary Revenue by IdeaWorksCompany, released today, describes the 2022 ancillary revenue activities and results for 65 airlines and provides an assessment for the industry as a whole. Here’s a guide to key features of the 2023 edition:

• 65 pages of individual airline listings arranged by global region.

• Alphabetical listing of 65 airlines from Aegean to Wizz Air, as a table, with total ancillary revenue in US dollars; and ancillary revenue as a percent of total airline revenue, and per passenger.

• Ancillary revenue as a % of revenue, ranked in a graph, starting with Spirit Airlines at 51.5%, followed by Frontier, 50.8%, and Allegiant, 48.9%.

• Ancillary revenue per passenger, ranked in a graph, starting with Jet2.com at $84.72, followed by Qantas Airways, $73.23, and Allegiant, $67.74.

• Top 10 airlines for ancillary revenue, ranked in a table, starting with Delta’s $7,987,111,000, followed by United’s $7,881,371,000, and American’s $7,711,216,000.

• Frequent flyer program revenue for 20 airlines, ranked in a table, starting with American – AAdvantage at $5,800,000,000, followed by Delta – SkyMiles, $5,500,000,000, and Southwest – Rapid Rewards, $5,206,000,000.

The 2023 CarTrawler Yearbook of Ancillary Revenue by IdeaWorksCompany was released today as a 103-page report sponsored by CarTrawler.

Click here to download and use these JPG graphic files:  Ancillary Revenue as a Percent of Total Revenue – 2022 and Frequent Flyer Revenue Analysis – 2022

The Yearbook of Ancillary Revenue is now available for sale in the store.

2023 Big Book of Travel Data Reveals $1.28 Trillion in Revenue from Airlines, Hotels, Car Rentals & OTAs – Press Release

August 15, 2023

Allianz Partners, a global leader in travel protection and consumer specialty insurance, and IdeaWorksCompany, the foremost consultant on ancillary revenue, have released the second edition of The Allianz Partners Big Book of Travel Data by IdeaWorksCompany.  The 2023 publication, which expands on last year’s edition, provides a world of industry data for airlines, hotel groups, car rental companies, and online travel agencies (OTAs), and is collated by alphabetical order, size, region, and more. The 120-page “Big Book” is available free of charge via download at AllianzPartners.com and IdeaWorksCompany.com. The compilation of data allows for interesting comparisons; here is the list of revenue leaders in each category in 2022:

• OTAs: $121.3 billion: Booking Holdings (gross bookings). The company operates Agoda, Booking.com, Kayak, Priceline, and RentalCars.com websites.
• Hotel groups: $61.4 billion: Marriott International (estimated room revenue).
• Airlines: $49 billion: American Airlines (company revenue).
• Car rental: $30 billion: Enterprise Holdings (company revenue). The company operates the Alamo, Enterprise, and National brands.

The 120-page “Big Book” is available via download at IdeaWorksCompany.com.

Click here to download JPG graphic file of  the “Travel Data Comparison of Top 10 Results” table found on page 12 of the Big Book.

The Big Book of Travel Data is now available for sale in the store.

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