IdeaWorks-2017年航空公司辅助服务收入报告（英文版）-2018-110页-7mb

2017 CarTrawler Yearbook of Ancillary Revenue Summary

Core Content

The 2017 CarTrawler Yearbook of Ancillary Revenue provides an in-depth analysis of how airlines generate revenue beyond ticket sales, focusing on ancillary revenue growth and strategies. It outlines the financial performance of top airlines, the role of frequent flyer programs (FFPs), a la carte services, and commission-based products in driving ancillary income. The report also highlights the increasing importance of ancillary revenue in the airline industry and offers insights into how airlines can effectively leverage it.

Main Points

• Ancillary Revenue Growth: From 2007 to 2016, the total ancillary revenue of the top ten airlines increased from $2.1 billion to over $28 billion, showing a significant rise in the industry's reliance on ancillary income.

• Ancillary Revenue Sources:

  • Frequent Flyer Programs (FFPs): These are a major source of ancillary revenue, especially for global carriers like United, Qantas, and Delta, where revenue is generated from the sale of miles or points to partners and customers.
  • A la Carte Services: Low-cost carriers (LCCs) such as Ryanair and easyJet primarily rely on a la carte fees for services like checked baggage, assigned seating, and onboard amenities.
  • Commission-Based Products: Airlines earn commissions from travel retail activities such as car rentals, hotel bookings, and travel insurance through their websites or GDS platforms.
  • Advertising and Inflight Sales: Revenue from inflight magazines, onboard advertising, and branded products is also part of ancillary income.
  • Fare Bundles: Some airlines allocate a portion of revenue from bundled products (e.g., checked baggage, extra legroom) as ancillary revenue.

• Global vs. Low-Cost Carriers:

  • Low-Cost Carriers (LCCs): These airlines generate higher ancillary revenue as a percentage of total revenue due to their focus on a la carte services and fare bundling.
  • Global Carriers: They benefit from FFPs and other indirect revenue streams, such as travel retail and advertising, which contribute to a more diversified revenue model.

• Per Passenger Ancillary Revenue:

  • The top ten airlines in per passenger ancillary revenue include both LCCs and global carriers, with some LCCs like Frontier and Spirit achieving high per passenger revenue through their a la carte strategies.
  • Global carriers such as United and Qantas also generate substantial per passenger ancillary revenue, often due to their FFPs and branded credit cards.

• Strategies for Ancillary Revenue Growth:

  • Airlines should adopt a structured approach to ancillary revenue, including understanding the opportunity, branding the mission, leading the initiative, listening to employees, and focusing on customer-centric products.
  • The report emphasizes the need for alignment between the airline's brand, employees, and customers to ensure successful implementation of ancillary revenue strategies.

Key Information

• Ancillary Revenue Definition: It refers to revenue beyond ticket sales, generated through direct sales to passengers or indirectly as part of the travel experience.
• Data Sources: The report uses annual reports, investor presentations, press releases, and executive quotes to compile data.
• Currency Considerations: Per passenger revenue figures are presented in local currencies for accurate comparison, as global currency fluctuations can skew results.
• Technological Influence: Dynamic pricing and personalized services are becoming more prevalent, allowing airlines to adjust prices based on demand and customer preferences.
• Consumer Behavior: Most passengers are willing to pay for additional services when offered the choice, indicating that ancillary revenue can be a powerful tool for airlines.

Summary of Top 10 Airlines by Ancillary Revenue (2016)

Ancillary Revenue as a % of Total Revenue

Ancillary Revenue per Passenger (2016)

Ancillary Revenue from FFPs (2016)

Ancillary Revenue Strategies

• Branded Fares: Airlines are increasingly using "basic economy," "main cabin," and "premium" fare structures to generate ancillary revenue.
• Dynamic Pricing: Technology enables airlines to adjust prices based on demand, which can lead to higher revenue if customers are willing to pay more.
• Employee Alignment: Successful ancillary revenue strategies require alignment with the airline's brand and employee support.
• Customer-Centric Products: Airlines should focus on services that are valuable to customers and hard for competitors to replicate.

Conclusion

Ancillary revenue is a critical component of airline financial performance and a growing trend in the industry. The report highlights the success of LCCs in generating high ancillary revenue as a percentage of total revenue and the importance of FFPs for global carriers. It also outlines a five-step approach for airlines to effectively build and manage their ancillary revenue strategies, emphasizing the need for clarity, branding, and customer alignment.