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Low Cost Meets Loyalty was issued today as a 15-page report to analyze the FFPs of these ten airlines: Air Arabia, AirAsia, Azul, Frontier, GOL, IndiGo, JetBlue, Pegasus, Viva Aerobus, and Vueling. Decades ago airline executives predicted “low cost” and “loyalty” were an impossible combination. But today, loyalty is now firmly embraced by LCCs.
The CarTrawler worldwide estimate leaps nearly 26% above 2023 and nearly $39 billion above 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 $148.4 billion worldwide for 2024, compared to $117.9 billion for 2023 and well above the previous $109.5 billion record in 2019. This CarTrawler Worldwide Estimate of Ancillary Revenue represents an increase largely built on 2023 passenger growth and increasing market share gains by low cost carriers.
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Click here to view/download the graphic from page 2 of the press release as a JPG file.
IdeaWorksCompany, a foremost consultant on ancillary revenue, frequent flyer programs, and airline retail, has released the 5th edition of its annual data compendium: The Big Book of Airline Data by IdeaWorksCompany.
The new edition provides a world of data for individual airlines, regional compilations, airline alliances, employment data, and frequent flyer membership totals. The collection of data allows for interesting comparisons; here is a sampling of global results for 2023:
• Asia & Pacific airlines experienced the largest year-over-year traffic growth of 116.2%; the region also has the largest share of global traffic at 32.1%.
• Canada and US airlines remain the world’s largest revenue producers with a 29.4% share of global airline revenue. However, Asia & Pacific had the highest year-over-year growth of airline revenue at 80.9%.
Top-performing LCCs gain 13.1% on a per passenger basis, but traditional airlines drop 4.3% in the 2024 CarTrawler Yearbook of Ancillary Revenue. The 2024 edition of the CarTrawler Yearbook of Ancillary Revenue by IdeaWorksCompany, released today, describes ancillary revenue activities and results for 68 airlines in 2023, revealing divergences in trends and providing an assessment of the industry as a whole. While total ancillary revenue for the top 10 airlines surpassed pre-pandemic levels by over 41%, the report highlights the changing fortunes among air carriers.
Airport Lounges Are the Hottest Ticket was issued today as an 18-page report to describe the economics of lounges and consumer fascination with these airport retreats. The following are key findings from the report:
Co-branded credit cards deliver wheelbarrows of money for some airlines. The latest IdeaWorksCompany report explores how this has transformed frequent flyer programs (FFPs) and contemplates the effect upon customer loyalty. Many airlines have shifted from sole reliance on behavioral loyalty, which relies upon a customer’s expectations for service and quality. Carriers now embrace transactional loyalty which emphasizes exchange relationships where something is given and something is received. The report advises caution about over-reliance on the co-branding bounty and suggests focusing more on the overall customer experience. Airline Loyalty Becomes a Multi-Billion Dollar Club was issued today as a 16-page report. It describes how airline FFPs generate revenue in the billions and provides abundant analysis and research on the business of co-branded credit cards.
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.
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.
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.
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.
