SHOREWOOD, WISCONSIN – IdeaWorksCompany continues a year-end tradition by identifying the airlines that have shown the greatest prowess in ancillary revenue, a la carte pricing, and loyalty marketing. This year, Kuwait-based Jazeera Airways takes the top spot.
Throughout 2016, we assessed the top ancillary revenue producing airlines and the most generous frequent flier programs; our reports described the industry’s service and product innovations; and we offered practical advice for airline executives. Along the way, a select group of airlines clearly stood apart in their quest for new sources of revenue success. This list of the Top 5 Revenue Innovation Champs for 2016 reflects the work of the front line employees and management teams who delivered exceptional results during the year:
1. Jazeera Airways tops this year’s list because its marketing and product presence goes far beyond what one might expect from an airline operating just 7 aircraft. This Kuwait-based airline is solidly profitable with an operating margin in excess of 20%. The big news for 2016 was the September opening of its Park & Fly facility. From drive-up through drop-off, this facility is truly designed to meet the needs of Gulf passengers. Park & Fly offers more than 500 covered parking spaces which protect customer vehicles from scorching sun while they are away. The uncluttered check-in process occurs in an air conditioned private building packed with amenities such as a Starbucks, cash machine, news agent, and money exchange. It’s an exceptional example of an airline building ancillary revenue from services and retail activity, while gaining even more by attracting higher yield business travelers.
2. Ryanair is also on this year’s list to acknowledge the significance of its “My Ryanair” customer profile initiative. More than 11 million customers have opened online accounts which allow the airline to fulfill its potential for personalized merchandising. Customers may build profiles which go far beyond the usual name, address, and form of payment. My Ryanair encourages consumers to describe the “who, what, why, where, and how” of their journeys. The Preferences section uses a breezy and speedy style to ask more than 15 questions to build the customer’s profile. The data collected allows Ryanair to create offers designed to boost ancillary revenue. But the information also undoubtedly helps the consumer experience a higher plane of personalized travel. During September 2016 the carrier offered a 10 euros flight credit to motivate enrollment and profile completion.
Revenue Innovation Champs for 2016.
3. Delta Air Lines appears for a second year as a top innovator determined to capture more revenue through continuous creativity. The airline has broken ranks with most others by investing a healthy $50 million of the revenue windfall from bag fees to actually improve service for the customer. Delta now attaches RFID tags to bags everywhere the airline flies. The tags transmit a bag’s whereabouts to the traveler via a mobile phone app. Reading the message “your bag has been loaded” provides a sense of tranquility that truly allows travelers to “sit back and enjoy the flight.”
4. Vueling seems to share Delta’s DNA for innovation. Savvy airlines use a la carte methods to meet customer service needs with new products. But Vueling’s new “Pending Passenger” feature is beyond savvy, because it fills a need that’s not yet anticipated by consumers. Imagine you are looking to book a flight for a trip with a good friend... but you don’t know which pal is going to say yes to the invitation. For the easy-to-digest price of 2 euros, Vueling allows you to book and confirm the seat and return within 72 hours to provide the travel companion’s name. Pending Passenger entices consumers to book Vueling... even when all the details of a trip are not yet confirmed.
5. Qantas completes this year’s top innovators with a health insurance and wellness offer tied to its frequent flyer program. Customers who purchase a Qantas Assure health insurance policy may download an app that delivers frequent flyer miles for remaining physically active. The program is endorsed by Australia’s National Heart Foundation and the campaign features actor Christopher Walken. Program members can accrue up to 15,000 Qantas points in a year (depending on the policy purchased) for walking, running, or even dancing. The program provides a powerful combination of benefits for Qantas by encouraging frequent flyer participation, generating policy revenue, and building the brand as one that cares for its customers.
IdeaWorksCompany looks forward to another year of ancillary revenue, a la carte, and loyalty marketing activity and will announce its 2017 selections a year from now. The complete collection of IdeaWorksCompany reports and surveys from this year, along with a trove of unpublished research, is included in The 2017 Airline Ancillary Revenue and Loyalty Guide which is set for release on 01 February 2017.