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Profit from innovation: Ancillary revenue examples from around the world

IdeaWorksCompany and CarTrawler offer a global a la carte buffet from 20 companies including Aer Lingus, Amazon, American Airlines, Lufthansa, and Tune Hotels.

DUBLIN, IRELAND – “All EU network carriers, including Lufthansa carriers, are losing money on EU routes.” That’s the quote by Lufthansa Chairman and CEO Christoph Franz as he spoke at the European Aviation Club in March 2012.  The challenges faced by Lufthansa Group provide an example of why airlines of all types are eagerly seeking the profit relief provided by ancillary revenue. In this environment, retail-oriented airlines are trying new concepts, testing results in the marketplace, and quickly tossing those that don’t produce results.

The latest IdeaWorksCompany report sponsored by CarTrawler, reviews innovations that rely upon consumer desire for more comfort, convenience, and certainty. A la carte options place consumers in control of the travel process. The companies featured in this report know that when a service provides good retail value, consumers will click to buy it. The following is a sampling of the revenue boosting retail methods from the low cost carriers, traditional airlines, and other companies featured in the report:   

  • Lufthansa passengers transiting Frankfurt may pre-order goods from the Lufthansa Worldshop and arrange for delivery at the gate before boarding their flight for 19.95 euros or 5,300 frequent flier miles.
  • Jeju Air, an LCC based in Korea, provides free in-city lounges (complete with free refreshments and Wifi) specializing in the booking of commission-based services for travelers. These “ancillary revenue incubators” book airport transfers, car rentals, accommodations, and sightseeing.
  • Norwegian Cruise Line taps the natural desire for parents to create special experiences for their kids with a $39.95 Nickelodeon Bedtime Kit featuring official SpongeBob sheets and pillows.
  • Amazon Prime is probably the most successful ancillary revenue initiative ever. The $99 annual fee likely delivers annual revenue of $5 billion tied to ancillary businesses in online entertainment.

“Profit From Innovation: Ancillary Revenue Examples From Around the World” was released as a free 19-page report available at CarTrawler’s website: cartrawler.com. The 2014 Ancillary Revenue Report series is sponsored by CarTrawler. CarTrawler powers car rental partnerships worldwide, working with some of the biggest names in travel including more than 60 airline partners around the world; plus industry-leading OTAs and top global hotel groups. The CarTrawler booking engine connects customers with more than 1,300 car rental agents at 30,000 locations in 174 different countries in the language and currency of their choice.

Co-Founder & Chief Editor - TravelDailyNews Media Network | Website | + Posts

Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales.

She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.

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