The weekly news roundup: IdeaWorksCompany airline ancillary ancillary revenue review, 2016 Global Flight Price Ranking from Rome2rio, Apple Pay for Klook users
AVIATION: Revenue from add-on services makes 10 airlines “billionaires”
Ancillary revenue doubles for 10 airlines in past seven years. (Image credit: parys/iStock)
Ancillary revenue for airlines have doubled between 2008 and 2015 reveals a new report, 2015 Top 10 Airline Ancillary Revenue Rankings, helping to create a group of “billionaire” airlines.
According to findings from the review, published by IdeaWorksCompany and sponsored by CarTrawler, the top 10 airlines generated US$26 billion that year.
This is a big leap for these carriers, which reported just US$8.4 billion in revenue for add-on services when IdeaWorksCompany published the first ancillary revenue review of top-performing airlines back in 2008.
This group is now a billion-dollar club with annual ancillary revenue ranging from just over US$1 billion to US$6.2 billion.
Top performer per passenger is Florida-based carrier Spirit at US$51.80 per customer (also tops the list for revenue share, at 43% of total sales). It is followed by Jet2.com at US$50.84, Allegiant at US$49.94, United at US$44.16 and Qantas Airways at US42.70 – making the top five (see chart below).
Of the 135 airlines reviewed by IdeaWorksCompany, 67 revealed figures related to ancillary revenue. The results for all the 67 disclosing airlines will be released in September 2016 as the annual CarTrawler Yearbook of Ancillary Revenue. A companion report, scheduled for November 2016, will use these results to extrapolate total ancillary revenue generated by 180 airlines around the world.
Michael Cunningham, chief commercial officer at CarTrawler, said airlines now face a challenge now that they have a wide range of ancillary products and technology.
“The challenge is to ensure that the ancillary benefits do not overshadow the core principles of customer experience that airlines have built their brands on. The opportunity is to deliver a personalised offering that complements their brand promise. Airlines that do this will see ancillary revenue gains, increased brand loyalty and a boost in customer lifetime value.”
Download the 2015 Top 10 Airline Ancillary Revenue Rankings report.
SECTORS: Rome2rio releases 2016 Global Flight Price Ranking
Flight pricing tends to fluctuate with supply and demand. (Image credit: william87/iStock)
Rome2rio, the multimodal search specialist, has released the 2016 edition of its Global Flight Price Ranking, which provides a snapshot of aviation pricing across domestic and international carriers.
The ranking, which was first released in 2013, compared 1,180,000 fares from 312 international and domestic carriers to determine each carrier’s average price per kilometre. It also includes a top 50 global ranking by price.
Key insights from the ranking include:
- Flight prices are more prone to fluctuate with supply and demand, unlike train, bus, ferry and taxi fares that are comparatively more stable over time.
- Many factors can influence per km costs including the type of aircraft flown, routes flown, local salary and fuel costs, ancillary revenue, and airport landing fees.
- Budget carriers such as Lion Air and AirAsia are at the low end of the cost per km scale, relying on an LCC business model and operations based in countries with lower average salaries.
- Innovative airlines such as KLM are more expensive; high service levels and initiatives such as the introduction of biofuels on some European routes don’t come cheap.
“Our analysis is intended to be a conversation starter, not a definitive statement on pricing trends or a given airline’s place in any particular pecking order. With global uncertainty around oil prices, economic stability, geopolitical pressure and the UK’s recent decision to leave the European Union, we expect there will be many changes to these rankings over the coming months,” said Rome2rio CEO, Rod Cuthbert.
“The EU’s open skies policy, which stimulated the growth of lowcost airlines and lowered fares as a result, will now be under pressure. We may well see a rise in costs as a result,” he added.
MOBILE: Klook brings Apple Pay to its users
Apple Pay for Klook users
Klook, a Hong Kong-based company that sells travel activities across Asia, has introduced Apple Pay to its users.
The company said that with Apple Pay its customers could make activity bookings at popular destinations in Asia even faster and more convenient on its iOS app.
When a Klook user adds a credit or debit card to Apple Pay the actual card numbers are not stored on the device or on Apple servers. Instead, a unique device account number is assigned, encrypted and securely stored in the secure element on the device. Each transaction is authorised with a one-time unique dynamic security code.
“We always aspire to fine-tune the ways our customers can discover the world. Technology is essential to that, and adding Apple Pay makes the Klook experience even more intuitive,” said Eric Gnock Fah, Klook president & co-founder.
• Featured mage credit: intararit/iStock
