Airlines are generating additional revenue streams by offering passengers personalised discounts on products and select seats via mobile apps.

Allegiant, EasyJet, Delta Airlines, Ryanair and Gol have been identified as the ‘Top 5 Revenue Innovation Champs’ by IdeaWorksCompany and CarTrawler, for generating the most ancillary airline revenue in 2017.

This includes the creation of additional airline revenues from sources such as inflight duty free sales, commissions from hotel bookings, the sale of frequent flyer miles to partners and the provision of customised services.

According to the analysts, Allegiant tops this year’s list because its latest endeavour creates an abundance of new revenue streams. The airline is building the largest ‘master-planned hotel-condo’ resort on Florida’s west coast to create an ‘airline-airport-resort relationship intended to become a pipeline for revenue’.

The huge development will fill 20 waterfront acres in Port Charlotte, Florida and include a resort hotel, nine condo towers, restaurants, bars, shops, and a marina. The airline estimates the Sunseeker Resorts project will bring an additional 300,000 visitors annually, with the potential to generate approximately $1bn over a ten-year period.

HARNESSING PARTNERSHIPS

EasyJet, in second place, is harnessing the power of long haul partnerships to add customers to its European network. EasyJet beat Ryanair in the connections race with its September 2017 announcement to sell connecting flights at easyJet between Europe and Argentina, Canada, Singapore, and the US. Canadian connections are provided by WestJet, while the other long-haul destinations are flown by its major competitor ― Norwegian.

The relationship, branded as ‘Worldwide by easyJet’, relies upon the GatwickConnects programme developed by Gatwick Airport and Icelandic technology company Dohop. IdeaWorksCompany and CarTrawler estimates the programme will generate approximately $200,000 (€163,464) per week in new revenue.

Delta Air Lines’ mobile app allows travellers to view their bag’s location, be it in the baggage room, on the ramp or planeside.

ADVANCED MOBILE APPS

Delta Air Lines ranks third, thanks to its mobile application that allows travellers to view a bag’s location, be it in the baggage room, on the ramp or planeside.

The application pushes out notifications to alert travellers when the bag has been loaded onto the flight and which carousel will receive the delivered bag.

Delta also guarantees to deliver checked bags to the carousel within 20 minutes of arrival, and provides 2,500 SkyMiles if the standard is not met.

According to the analysts, these enhancements treat baggage service as a true consumer product by providing added value for the fees paid by travellers.

Ryanair’s ‘advanced’ mobile application earned fourth place in this year’s listing. The analysts consider Ryanair to have ‘the most advanced ancillary revenue effort’ amongst the world’s top 25 airlines. Ryanair practices ‘good retailing’ by using personalised messaging to alert consumers to ‘on sale’ pricing for a la carte items, such as select seat assignments and product bundles.

‘EXCEPTIONAL’ VALUE

Finally, Brazilian airline Gol’s new bonus mileage programme, Clube Smiles, grabbed the attention of IdeaWorksCompany and CarTrawler, thanks to its powerful combination of a frequent flyer programme and subscription plan. This subscription-based mileage accelerator ‘lifts loyalty and ancillary revenue to new levels’, say the analysts. Benefits include select discounts on airline and retail rewards.

Commenting on the results, CarTrawler’s Chief Commercial Officer Aileen McCormack, said: “The five airlines recognised as revenue innovation champs for 2017 all share a common dedication to providing exceptional and transparent value to consumers. Airlines that allow consumers freedom of choice will be financially rewarded for treating their passengers as intelligent consumers.”

The IdeaWorksCompany and CarTrawler estimated the value of global airline ancillary revenues for 2017 to be $82.2bn (€67.2bn) – up 22% on 2016, as reported.