News and Research

Selling Smarter in Difficult Times

May 1, 2021

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.”

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