1、 2017 CarTrawler Yearbook of Ancillary Revenue IdeaWorksC LLC Page 1 The CarTrawler Yearbook of Ancillary Revenue by IdeaWorksCompany Table of Contents Summary of the Results . 4 Ancillary Revenue Defined . 12 About Individual Airline Listings . 13 A la Carte Services Sold through GDS . 13 Ancillary
2、 Revenue Data and Graphs . 15 Europe and Russia . 22 The Americas . 49 Asia and the South Pacific . 77 Middle East and Africa . 100 Currency Exchange Rates Used for the Worldwide Statistics . 108 The free distribution of this report is made possible through the sponsorship of CarTrawler. CarTrawler
3、is the worlds leading B2B travel technology platform providing car rental and ground transportation options to over 700 million airline passengers annually, through our 100 airline partnerships. We connect travellers in real-time, on any device, to every significant car rental and ground transportat
4、ion supplier globally. CarTrawlers unique technology is an easy to implement platform, personalised based on your customers trip details. Our technology provides you with higher conversion rates and increased revenue. For more information visit Issued September 2017 by IdeaWorksC LLC Shorewood, Wisc
5、onsin, USA IdeaWorksC 2017 CarTrawler Yearbook of Ancillary Revenue IdeaWorksC LLC Page 2 About Jay Sorensen, Writer of the Report Jay Sorensens research and reports have made him a leading authority on frequent flyer programs and the ancillary revenue movement. He is a regular keynote speaker at th
6、e annual MEGA Event, spoke at IATA Passenger Services Symposiums in Abu Dhabi and Singapore, and has testified to the US Congress on ancillary revenue issues. His published works are relied upon by airline executives throughout the world and include first-ever guides on the topics of ancillary reven
7、ue and loyalty marketing. He was acknowledged by his peers when he received the Airline Industry Achievement Award at the MEGA Event in 2011. Mr. Sorensen is a veteran management professional with 30 years experience in product, partnership, and marketing development. As president of the IdeaWorksCo
8、mpany consulting firm, he has enhanced the generation of airline revenue, started loyalty programs and co-branded credit cards, developed products in the service sector, and helped start airlines and other travel companies. His career includes 13 years at Midwest Airlines where he was responsible fo
9、r marketing, sales, customer service, product development, operations, planning, financial analysis and budgeting. His favorite activities are hiking, exploring and camping in US national parks with his family. About Eric Lucas, Editor of the Report Eric Lucas is an international travel, culture and
10、 natural history writer and editor whose work appears in Michelin travel guides, Alaska Airlines Magazine, Westways Magazine and numerous other publications. Founding editor of Midwest Airlines Magazine, he is the author of eight books, including the 2017 Michelin Alaska guide. Eric has followed and
11、 written about the travel industry for more than 25 years. He lives on San Juan Island, Washington, where he grows organic garlic and heirloom corn; visit him online at TrailNot4S. Disclosure to Readers of this Report IdeaWorksCompany makes every effort to ensure the quality of the information in th
12、is report. Before relying on the information, you should obtain any appropriate professional advice relevant to your particular circumstances. IdeaWorksCompany cannot guarantee, and assumes no legal liability or responsibility for, the accuracy, currency or completeness of the information. The views
13、 expressed in the report are the views of the author, and do not represent the official view of CarTrawler. Eric, at his favorite summer retreat, Steens Mountain, Oregon. Jay, with son Aleksei and daughter Annika, in North Cascades National Park in Washington. 2017 CarTrawler Yearbook of Ancillary R
14、evenue IdeaWorksC LLC Page 3 2017 CarTrawler Yearbook of Ancillary Revenue IdeaWorksC LLC Page 4 2017 CarTrawler Yearbook of Ancillary Revenue Summary of the Results The importance and prevalence of ancillary revenue continues to move forward with an ever larger footprint on airline financial statem
15、ents and the products offered to consumers. Back in 2007 the top ten airlines, as rated by total ancillary revenue, generated $2.1 billion. Fast forward to financial results of 2016 (shown in Table 1) and the top ten tally has leapt to more than $28 billion. Yet the challenges faced by the worlds ec
16、onomy reinforce the need for airlines to rely upon ancillary revenue as a tool to serve the needs of consumers and investors. Table 1: Top 10 Airlines Total Ancillary Revenue (US dollars) Annual Results 2016 Approximate Sources of Revenue Frequent Flyer Program A la Carte Such As bags Travel Retail
17、Commissions $6,222,000,000 United 48% 52% $5,172,400,000 Delta 52% 48% $4,901,000,000 American 43% 57% $2,832,800,000 Southwest 80% 20% $2,100,771,801 Air France/KLM 33% 67% $1,982,255,301 Ryanair None 100% $1,355,078,078 * easyJet None 100% $1,349,812,715 * Lufthansa Network 57% 43% $1,193,698,000
18、Qantas (excludes Jetstar) 90% Limited disclosure $1,179,131,138 Air Canada 45% 55% 2016 carrier results were based upon recent 12-month financial period disclosures. * IdeaWorksCompany estimate based upon updated past disclosure and other sources. Total ancillary revenue is presented in a different
19、manner this year to emphasize how airlines produce it. Most top ten airlines earn their place on the table through the robust revenue contribution of a frequent flyer program. Specifically, these billion-dollar amounts are generated by the sale of miles or points to banks that issue a carriers co-br
20、anded credit card. But on this table of giants, Ryanair and easyJet are the exception; their ancillary revenue ranking occurs through a reliance on a la carte fees and the commissions earned from travel retail activities at the website, such as car hire bookings and travel insurance sales. The full
21、description of ancillary revenue is offered on the next page. 2017 CarTrawler Yearbook of Ancillary Revenue IdeaWorksC LLC Page 5 Financial documents for 138 airlines were reviewed Every year since 2007, IdeaWorksCompany searches for disclosures of financial results which qualify as ancillary revenu
22、e for airlines all over the globe. Annual reports, investor presentations, financial press releases, and quotes attributed to senior executives all qualify as sources in the data collection process. Of the 138 airlines reviewed, 66 were found to reveal financial results related to ancillary revenue.
23、 This represents a nearly threefold increase from the 23 airlines which disclosed ancillary revenue 11 years ago. IdeaWorksCompany offers a definition of Ancillary Revenue Revenue beyond the sale of tickets that is generated by direct sales to passengers, or indirectly as a part of the travel experi
24、ence. IdeaWorksCompany further defines ancillary revenue using these categories: 1) a la carte features, 2) commission-based products, 3) frequent flyer activities, 4) miscellaneous sources such as advertising, and 5) the a la carte components associated with a fare or product bundle. From this list
25、, total airline revenue and ridership data were collected to determine the top ten airlines in overall ancillary revenue, as a percentage of company revenue, and on a per passenger basis. The results for the 66 disclosing airlines are described in the airline listings which follow this summary secti
26、on. Ancillary revenue as a percent of total revenue favors low cost carriers Its a logical corollary that airlines with low average fares achieve the best “percent of total revenue” results. Table 2 is dominated by the leading low cost carriers in the world, and nearly all demonstrate sizeable incre
27、ases since 2011. Measurement by percentage is a reliable indicator because it removes the factor of global currency fluctuations. Table 2: Top 10 Airlines Ancillary Revenue as a % of Total Revenue Annual Results 2016 Ancillary Source Compared to their 2011 Results 46.4% Spirit Various 33.2% 13.2 poi
28、nts 42.4% Frontier Various 7.7% 34.7 points 40.0% Allegiant Various 27.0% 13.0 points 39.4% Wizz Air Various 27.9% 11.5 points 26.8% Ryanair Various 20.5% 6.3 points 26.0% J Various 27.1% -1.1 points 24.3% Volaris Various 9.5% 15.3 points 24.0% HK Express Various Carrier began operations in 2013 22.
29、0% Jetstar Various 15.3% 6.7 points 22.0% Pegasus Various 10.1% 11.9 points 2016 and 2011 carrier results were based upon 12-month financial period disclosures. 2017 CarTrawler Yearbook of Ancillary Revenue IdeaWorksC LLC Page 6 Lets examine the results for Frontier Airlines as a very robust example
30、. Thanks to Frontiers 2017 filing for an initial public offering of shares, there are new disclosures of the carriers ancillary revenue prowess. The carriers systemwide total revenue per passenger was a modest $114.75 for 2016. Thats the average revenue associated with a passenger and includes about
31、 $49 generated by ancillary revenue. A good portion of this amount includes the optional extras passengers can buy such as checked bags, seat assignments, and snacks onboard. A small portion of the $49 is also composed of revenue produced by Frontiers frequent flyer program and commissions from car
32、hire and hotel bookings. The airline was remade as an ultra low-cost carrier (ULCC) during 2014 after Indigo Partners acquired Frontier.1 For 2013 the airline carried 10.8 million passengers2 and for 2016 this jumped to 14.9 million on the strength of new ownership, management, and the low fares mad
33、e possible by the a la carte method. Numbers reveal the truth consumers embrace the choices delivered by the branded fare approach. They can click to choose maximum savings or buy up to add comfort and convenience. Worldwide the a la carte approach long embraced by low cost carriers has been adopted
34、 by network airlines. Within the US, American, Delta, and United recently introduced basic economy fares (sometimes called seat-only fares) to compete with Frontier and Spirit. These fares reduce the product to a minimalist experience with fees charged for bags and early seat assignments, no elite u
35、pgrades, and a ban on flight changes. Yet when presented with higher fare, better service options, the majority of consumers opt to spend more. Recent comments by Scott Kirby, the president of United, reveal 60 to 70 percent of passengers buy a higher fare when presented with the Basic Economy optio
36、n.3 American disclosed similar results with 50 percent of customers buying the Main Cabin product when presented the opportunity to consider the lower priced Basic Economy branded fare.4 Elsewhere in the world, the practice has been adopted by Air France/KLM, British Airways, and Lufthansa as these
37、airlines compete with the likes of Ryanair, easyJet, and Norwegian. In other regions of the world, basic fares remain a concept to be considered for the near future. Thats the revenue power implicit when consumers are offered a choice to save money or spend more . . . most often they spend more. The
38、 ancillary revenue pie is unique for every airline In the process of collecting data for this Yearbook, IdeaWorksCompany makes note when details regarding the sources of ancillary revenue are identified. For some airlines, such as British Airways, Delta, and easyJet, the range of disclosures from fi
39、nancial filings and government data provides a rather complete picture of ancillary revenue. Some airlines, such as HK Express, have chosen to directly disclose their ancillary revenue to IdeaWorksCompany for inclusion in the Yearbook. 1 Frontier Group Holdings SEC Form S-1 Registration Statement da
40、ted 31 March 2017. 2 Frontier Group Holdings SEC Form S-1 Registration Statement dated 31 March 2017. 3 SkyMoney section of Airline Weekly dated 12 June 2017. 4 American presentation at Bank of America Merrill Lynch Conference dated 18 May 2017. 2017 CarTrawler Yearbook of Ancillary Revenue IdeaWork
41、sC LLC Page 7 IdeaWorksCompany reviewed the data and made a few adjustments. For example, for British Airways, revenue information was found in the annual reports and investor presentations of IAG, British Airways Holidays, and Avios, and in UK government data. “Other activities” were added to equal
42、 0.5% of airline revenue to account for sources such as car hire and trip insurance commissions. Colors assigned to pie slices vary, however blue shading always designates baggage revenue with red for frequent flyer programs/co-branded credit cards. Global Carrier Examples Low Cost Carrier Examples
43、The large slices of blue demonstrate the importance of fees for checked baggage. The slices are smaller for global carriers which continue to include a checked bag on their long-haul routes, such as transatlantic flights. But where Delta and British Airways may have a smaller slice of bag revenue, t
44、hey certainly generate lots of cash from their frequent flyer programs. The vast majority of activity occurs when airlines sell miles to the banks that issue co- branded cards such as the Delta SkyMiles card issued by American Express. Branded fares, based upon the “good, better, and best” method of
45、 retailing, also contribute to ancillary revenue as shown in the Delta and easyJet examples. The entire fare is not counted as ancillary revenue, but rather the premium above the basic economy fare level is measured. Fees assessed for assigned seating are another method for airlines to boost the bottom line. These fees do tread close to the model defined by low cost carriers; adoption of this practice does pose a risk to the perceived quality of global airlines. Comfort+ Seati
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