Worldwide Review of Ancillary Revenue
=====================================
EUR 7.68 billion ($10.25 billion) EUR 1.72 billion ($2.29 billion)*
Total Annual Result - Calendar Year Total Annual Result - Calendar Year
2008 2006
=================================== ===================================
* 2006 results were calculated in euros, the dollar value was re-stated
based upon a $1 = EUR 0.75 exchange rate.
Some carrier results were based upon the most recent fiscal year.
IdeaWorks has followed the success of the first-ever Guide on the topic of
ancillary revenue with a second edition for 2009. The 145-page Guide to
Ancillary Revenue and a la Carte Pricing by IdeaWorks, solely sponsored by
ezRez Software, will be available for online purchase September 8, 2009.
The Guide is the result of research, interviews and analysis conducted
during 2009 on a la carte pricing, commission-based services and frequent
flier activities. The Worldwide Review of Ancillary Revenue Statistics has
become a highly anticipated feature of the Guide. IdeaWorks analyzed
financial statements from 92 airlines to develop a picture of ancillary
revenue activity by carriers worldwide. Of the 92 airlines, 35 reported
revenue breakdowns identifying ancillary activities.
The current top 5 list demonstrates how much has changed since the last
Guide. Legacy airlines now fill the top three positions, which once
included low cost carriers Ryanair and easyJet. And the ancillary revenue
produced by individual carriers, such as United and Ryanair, has increased
dramatically. The top 5 club now requires far more revenue to join -- in
excess of EUR 450 million. That's more than any single carrier produced to
join the prior top 5 list.
Top 5 Airlines - Total Ancillary Revenue
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Annual Results - Calendar Year Annual Results - Calendar Year
2008 2006
================================= ===============================
EUR 1,650,000,000 American EUR 416,116,752 United
================= =============== =============== ===============
EUR 1,200,000,000 United EUR 362,104,000 Ryanair
================= =============== =============== ===============
EUR 1,125,000,000 Delta EUR 189,476,508 easyJet
================= =============== =============== ===============
EUR 625,350,240 Ryanair EUR 134,662,086 Alaska
================= =============== =============== ===============
EUR 458,622,000 Qantas EUR 63,407,000 Aer Lingus
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Source: Worldwide Review of Ancillary Revenue Statistics from the
2008 and 2009 Ancillary Revenue Guide.
Some carrier results were based upon the most recent fiscal year.
The Worldwide Review of Ancillary Revenue Statistics from this year's Guide
demonstrates the success of a la carte pricing and other activities such as
frequent flier programs. While ancillary revenue as a percent of total
revenue remains the best measure of overall revenue prowess, the 2009
edition reveals many surprises. For example, US-based Allegiant Air
appears on the top 5 list for the first time and unseats Ryanair from the
#1 position.
Top 5 Airlines - Ancillary Revenue as a % of Total Revenue
==========================================================
Annual Results Annual Results -
- 2008 Guide 2006 Guide
=================== =====================
22.7% Allegiant 16.2% Ryanair
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19.3% Ryanair 14.2% Vueling
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15.5% easyJet 12.8% Allegiant
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14.8% Jet2.com 9.0% Air Deccan
==== ========== ========= ==========
14.1% Vueling 8.8% easyJet
==== ========== ========= ==========
Source: Worldwide Review of Ancillary Revenue
Statistics from the 2008 and 2009 Ancillary Revenue
Guide.
"At the beginning of this decade, 'ancillary revenue' was not a buzz word
or strategy that businesses were building departments around with
multi-million-dollar revenue targets, but that has changed," said Tina
Fitch,
co-founder, president and CEO of ezRez Software, sponsor of The Guide to
Ancillary Revenue and a la Carte Pricing by IdeaWorks. "In today's
tightened market, we're seeing airlines and other travel companies
broadening the relevance of their brands to a larger set of consumers by
adding more travel offerings as means to diversify revenue and increase
customer loyalty. The Guide is a must-read for any travel executive who
wants to innovate, compete more effectively and boost a company's long-term
viability."
The following is a sampling of the information and best practices described
in the guide:
-- United Airlines generates an average of EUR 4.36 ($5.81) from checked
baggage charges per US domestic passenger.
-- Southwest Airlines sells about four Business Select tickets per flight
on average and the program contributed approximately $75 million (EUR 56.3
million) in revenue in 2008.
-- The Qantas Frequent Flyer program contributes whopping revenue of EUR
11.87 ($15.82) per passenger -- a record among the world's airlines.
-- AirAsia X, the Malaysia-based low cost airline, realizes EUR 2.06
million ($2.75 million) from the sale of pre-order meals to passengers on
its long haul flights such as London-Kuala Lumpur.
The Guide includes the following "what-works-best" and "how-to-do-it"
sections that describe how airlines can maximize ancillary revenue based
upon leading carriers in Europe, North America, and Africa:
-- The a la Carte Handbook
-- Successful Airlines Will Focus on These Five Strategies
-- Building a Better Revenue Aware Airline
-- How to be Better than Ryanair
-- United and SAS Use a la Carte Pricing -- You Can Too
-- Lessons Learned from Lodging
-- Tales from the Ancillary Revenue Front - Executive Interviews
NOTE: The Guide to Ancillary Revenue and a la Carte Pricing by IdeaWorks
will be available online for purchase, and will also be distributed by
ezRez free of charge at the Airline Information "FFP - ARAC Mega Event
2009" in Los Angeles. Simply stop at the ezRez booth at the conference to
pick up your free copy of the Guide. Learn more about this October 22/23,
2009 event by visiting the Conferences page under the News and Events tab
at the ezRez.com website. Jay Sorensen, president of IdeaWorks, will make
keynote presentations on a la carte pricing and frequent flier topics at
the Mega Event.
Not attending the conference? Or do you require immediate ancillary
revenue satisfaction? Order a copy of the Guide online starting September
8, 2009 for US$449 per copy (a $50 savings off last year's price of $499).
The Guide will be available for purchase and immediate download as a PDF
at: AirlineInformation.org/guide.
About ezRez:
ezRez Software, Inc. enables its partners to sell any combination of
travel products including air, car, hotel, trip activities, packaging and
travel insurance to anyone, anywhere in the world. Its robust
Software-as-a-Service (SaaS) platform allows clients that want to sell
multiple travel products to easily 'plug and play' software to launch full
online travel agency functionality -- including access to more than 200,000
travel suppliers -- in a matter of months while retaining the look and feel
of a customized implementation at a fraction of the cost. ezRez clients
include some of the world's largest airlines, hotels, travel agencies and
banking loyalty programs such as American Airlines, American Express,
JetBlue, InterContinental Hotels, LAN Airlines, and Starwood Hotels &
Resorts. Based in San Francisco, ezRez has secured $17.1 million in
venture funding led by Canaan Partners with participation from Azure
Capital Partners.
About IdeaWorks: IdeaWorks was founded in 1996 as a consulting
organization building brands through innovation in product, partnership and
marketing, and building profits through financial improvement and
restructuring. Its international client list includes the hotel, airline,
marine, railroad, consumer products and health care sectors. IdeaWorks
specializes in ancillary revenue improvement, brand development, customer
research, competitive analysis, creating partner-marketing strategies, cost
reduction programs and business restructuring. Learn more at
IdeaWorksCompany.com.
Contact Information: Contact: Jay Sorensen For inquiries: 414-961-1939 Kate Sullivan 973-568-7589