A REVIEW OF RECENT TRENDS IN AIRLINE ANCILLARY REVENUES

Airline ancillary revenue which refers to non-ticket revenue sold directly to passengers or indirectly as part of their travel experience, has become a mandatory component for the revenue mix of all airlines as well as a key reason for the improved financial performance of the airline industry in the recent years. It is generated by a large amount of activities that include „a la carte” services such as fees for checked bags, frequent flying miles to airline partners, miscellaneous sources like advertising and commission-based products such as inflight retail, and car rentals - virtually any service added to the core transportation service. Contribution of ancillary services to the total revenue streams of airlines has been increasing substantially over the past decade. In 2007, the top ten airlines, as rated by total ancillary revenue, generated $2.1 billion, while ten years later, the top ten airline total has reached $29.7 billion. The paper explores the recent growth and trends in ancillary revenue in the airline industry, particularly within in the last ten years and identifies significant differences in ancillary sources with regard to carrier type. Low-cost carriers pioneered the practice of charging for supplementary services that were previously provided free of charge by seeking revenue from checked bags, assigned seats and extra leg room seating. Traditional airlines moved from all-inclusive booking arrangement and started to adopt add-on bundling practice when selling flight tickets taking advantage of low headline price. Their ancillary revenue mostly comes from the use of frequent flyer program, a mix of baggage fees and premium seats. Top airlines in overall ancillary revenue performance measured as total revenue, a percent of revenue, or on a per passenger basis are determined in the paper and new trends in creating ancillaries are elaborated. In order to improve profit performance, the airline revenue management and distribution systems should consider total revenue from each passenger, by linking his ticket value and his ancillary revenue potential.

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Europe's airlines will see more restructuring

Emerald Expert Briefings ◽

10.1108/oxan-db211426 ◽

2016 ◽

Keyword(s):

Airline Industry ◽

Low Cost ◽

Terrorist Attacks ◽

Content Type ◽

Underlying Condition ◽

The Past ◽

Low Cost Carrier ◽

The Eu

Subject Europe's airline industry. Significance Despite good performance over the past year, the underlying condition of the European airline industry has not changed. Major carriers are still facing competitive challenges from long-haul airlines based in the Gulf, especially Emirates, Qatar Airways and Etihad Airways, and from the European low-cost carrier (LCC) sector. Impacts The fallout from recent terrorist attacks could hit the industry's fragile recovery. Labour unrest in France will affect Air France, as its pilots voted on May 30 to go on strike over pay conditions. A UK exit from the EU would force its airlines, some of the most efficient in Europe, to reconsider the focus of their operations. New opportunities may arise from the Commission's efforts to negotiate aviation agreements with such countries as Brazil as well as ASEAN.

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TRANSNATIONAL REPRESENTATION BY EUROPEAN WORKS COUNCILS IN THE PASSENGER AIRLINE INDUSTRY

Journal of Air Transport Studies ◽

10.38008/jats.v11i1.151 ◽

2020 ◽

Vol 11 (1) ◽

pp. 1-10

Author(s):

Stephen Havlovic

Keyword(s):

Mergers And Acquisitions ◽

Airline Industry ◽

Low Cost ◽

Strategic Decision ◽

Strategic Decision Making ◽

Works Councils ◽

The Past ◽

Start Up ◽

Subject Areas ◽

International Airlines

Mergers and acquisitions have reduced the number of European Works Councils (EWCs) in the airline industry over the past two decades. In addition, start-up low-cost airlines have been reluctant to form EWCs. Only 5 of the 11 eligible transnational passenger airlines have established EWCs. This limited number of airline EWCs reduces airline employees' opportunity to be involved in strategic decision making in areas such as tourism. All of the available EWC agreements provide the opportunity for management and employee member consultation, the offering of opinions, and providing information related to European transnational operations. The Lufthansa Group and the International Airlines Group EWC agreements contain more subject areas for discussion than the Air France-KLM agreement. Only the Lufthansa Group EWC agreement includes the topic of environmental protection.

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Empirical Validation of Blue Ocean Strategy Sustainability in an International Environment

Foundations of Management ◽

10.2478/fman-2018-0012 ◽

2018 ◽

Vol 10 (1) ◽

pp. 143-162

Author(s):

Jiri Dvorak ◽

Ilona Razova

Keyword(s):

Airline Industry ◽

Low Cost ◽

Competitive Environment ◽

Economy Of Scale ◽

The Third ◽

The Past ◽

International Environment ◽

First Mover Advantage ◽

First Mover ◽

Do So

Abstract This article investigates the applicability of blue ocean strategy in regard to low-cost airlines in the civil airline industry. To do so, the commercial offers of selected airlines were compared to validate any attempts to apply the blue ocean strategy concept. This is followed by examining the time limitation of the concept in a competitive environment and is illustrated by the changes in the industry for the past 30 years and a comparison of offers from similar companies. The third issue is the evaluation of the further contribution of blue ocean strategy when it is recognized as time-limited. The importance of first-mover advantage, which could be based on the ability to capture an economy of scale and advantageously shape the market, is also discussed.

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Seat assignment problem with the payable up-grade as an ancillary service of airlines

Annals of Operations Research ◽

10.1007/s10479-021-04329-0 ◽

2021 ◽

Author(s):

Moongil Yoon ◽

Habin Lee

Keyword(s):

Airline Industry ◽

Assignment Problem ◽

Low Cost ◽

Service Innovation ◽

Service Industries ◽

Ancillary Services ◽

Ancillary Service ◽

Total Revenue ◽

Assignment Method ◽

Low Cost Carriers

AbstractThe de-bundling and re-bundling of service products offered by low cost carriers from service innovation have become 'à-la-carte' services and chargeable ancillary services to generate additional revenues in the airline industry. In this paper, we focus on the payable upgrade option in airlines to increase revenue when customers' demands are uncertain. This study is as an extension of planned upgrade, which guarantees the use of low-quality services at a low price, but requires customers to pay to use upgraded benefits. In this paper, we focus on the seat assignment problem with the payable upgrade option to maximize revenue. Also, we set the condition under which payable upgrade options can generate more revenue. Furthermore, applying Belobaba's EMSR approach, we suggest an effective seat assignment method for multiple fare classes with a payable upgrade option to increase the total revenue. With a simple numerical example, we find that introducing a payable upgrade option can increase the revenue. Our method for allocating seats for multiple fare classes with a payable upgrade option can contribute effectively to revenue increases in airlines' branded fare products, as well as in other service industries.

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The Low Cost Carrier Revolution Continues: Evidence From The US Airline Industry

Journal of Business & Economics Research (JBER) ◽

10.19030/jber.v10i1.6732 ◽

2011 ◽

Vol 10 (1) ◽

pp. 37

Author(s):

Bogdan Daraban

Keyword(s):

Airline Industry ◽

Business Models ◽

Low Cost ◽

Font Size ◽

The Core ◽

The Past ◽

Considerable Cost ◽

The Us ◽

Low Cost Carrier ◽

Competing Models

Over the past twenty years the US airline industry has been marked by the intense competition between the Low-Cost Carriers (LCCs) and the Full-Service Carrier (FSCs). The fundamental differences between the two business models are reflected in considerable cost advantages of the LCCs. In this paper, I use a set of model specific metrics to investigate whether the competitive process has led to convergence in some of the key features of the competing models. I conclude that despite some evidence of convergence along certain dimensions, the LCCs are not ready to abandon the core LCC model.

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WestJet Airlines: hybrid but profitable

Strategic Direction ◽

10.1108/sd-07-2015-0106 ◽

2015 ◽

Vol 31 (8) ◽

pp. 23-25

Author(s):

Mark Thomas

Keyword(s):

Airline Industry ◽

Design Methodology ◽

Low Cost ◽

Strategic Positioning ◽

Hybrid Strategy ◽

Content Type ◽

The Past ◽

Low Cost Carrier ◽

One Year

Purpose – The article looks at a Canadian airline, WestJet, that began as a low-cost carrier and is now adopting a more hybrid strategy. It analyses the difficulty of such a strategy and makes the comparison with Singapore Airlines (SIA) which has attempted to do the same. Design/methodology/approach – The article is a case study primarily of WestJet, but also of SIA. Findings – The airline industry is notorious for its low profits in the good years and appalling losses in the bad ones. The Canadian airline, WestJet, is one of the few companies that has defied this trend over the past decade. Indeed, it has reported positive net incomes for all but one year since it was created in 1996. In doing so, the Alberta-based firm is bucking not just the trend on profitability but also on strategic positioning.

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Cross-culture outcomes of a brazilian professor Fulbright in the USA

Revista de Educação do Cogeime ◽

10.15599/0104-4834/cogeime.v26n50p115-123 ◽

2017 ◽

Vol 26 (50) ◽

pp. 115

Author(s):

Marcelo Da Silva Leite ◽

Celeste Gaia

Keyword(s):

Higher Education ◽

Low Cost ◽

Cross Culture ◽

College And University ◽

Governmental Agencies ◽

The Past ◽

University Curriculum ◽

Fulbright Scholar ◽

The Usa ◽

Higher Education Costs

Over the past decade due the expansion of globalization there has been an increasing emphasis on internationalization among faculty, administration and accrediting agencies in the Higher Education. Although to promote internationalization in the Higher Education, costs are a big challenge, one way to have the international actions with low cost, it is seeking for grants from different governmental agencies and foundations.The Fulbright Scholar program provides a long-standing and externally-funded means for internationalizing college and university curriculum. This article is going to share the perspective of a Brazilian Fulbright Scholar at an American college and the institution perspective of the Fulbright scholar participation at the College.

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An Assessment of a Low-Cost Wastewater Disposal System after Twenty-Five Years of Operation

Water Science & Technology ◽

10.2166/wst.1987.0249 ◽

1987 ◽

Vol 19 (5-6) ◽

pp. 701-710 ◽

Cited By ~ 3

Author(s):

B. L. Reidy ◽

G. W. Samson

Keyword(s):

Large Scale ◽

Low Cost ◽

Wastewater Disposal ◽

Industrial Base ◽

Industrial Wastewaters ◽

The Past ◽

Gasification Process ◽

Appropriate Treatment ◽

Environmentally Safe ◽

Coal Resource

A low-cost wastewater disposal system was commissioned in 1959 to treat domestic and industrial wastewaters generated in the Latrobe River valley in the province of Gippsland, within the State of Victoria, Australia (Figure 1). The Latrobe Valley is the centre for large-scale generation of electricity and for the production of pulp and paper. In addition other industries have utilized the brown coal resource of the region e.g. gasification process and char production. Consequently, industrial wastewaters have been dominant in the disposal system for the past twenty-five years. The mixed industrial-domestic wastewaters were to be transported some eighty kilometres to be treated and disposed of by irrigation to land. Several important lessons have been learnt during twenty-five years of operating this system. Firstly the composition of the mixed waste stream has varied significantly with the passage of time and the development of the industrial base in the Valley, so that what was appropriate treatment in 1959 is not necessarily acceptable in 1985. Secondly the magnitude of adverse environmental impacts engendered by this low-cost disposal procedure was not imagined when the proposal was implemented. As a consequence, clean-up procedures which could remedy the adverse effects of twenty-five years of impact are likely to be costly. The question then may be asked - when the total costs including rehabilitation are considered, is there really a low-cost solution for environmentally safe disposal of complex wastewater streams?

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Economic Consequences of War

The Journal of Economic History ◽

10.1017/s0022050700083844 ◽

1943 ◽

Vol 3 (S1) ◽

pp. 1-8

Author(s):

Curtis P. Nettels

Keyword(s):

Low Cost ◽

Economic Consequences ◽

Competitive Advantages ◽

Competitive Position ◽

The Past ◽

History Of ◽

Costs Of Production ◽

Foreign Competitors

One influence of war has repeatedly asserted itself in the past—an effect on the costs of production and on the competitive position of the industries and firms of victorious or neutral nations. This subject needs more study, but certain facts suggest a hypothesis, of three parts. First: war expands some industries or concerns, increases their efficiency, enables them to operate, at the end of the struggle, on a comparatively low-cost basis, intensifies their competitive advantages, and improves their position in relation to foreign competitors. Second: war—for the duration—bolsters up some high-cost units by enabling them to sell at a profit all they can produce. The end of the war places such high-cost units at a disadvantage in the process of absorbing the shocks of the transition to a peacetime economy. Third: the history of postwar periods usually exhibits a sharp contest between such low-cost and high-cost enterprises. While “low cost” and “high cost” may refer to the relative positions of units within the same country, in most of this discussion, the terms will be applied to the producers of one country (either victor or neutral) to mean that their costs are low or high in comparison with those of their foreign competitors.

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Normative Aspects of Nudging in the International Sphere

AJIL Unbound ◽

10.1017/aju.2021.35 ◽

2021 ◽

Vol 115 ◽

pp. 263-267

Author(s):

Doron Teichman ◽

Eyal Zamir

Keyword(s):

Energy Consumption ◽

Organ Donation ◽

Low Cost ◽

National Level ◽

The Past ◽

The People ◽

Posthumous Organ Donation ◽

Regulatory Problems

The use of nudges—“low-cost, choice-preserving, behaviorally informed approaches to regulatory problems”—has become quite popular at the national level in the past decade or so. Examples include changing the default concerning employees’ saving for retirement in a bid to encourage such saving; altering the default about consent to posthumous organ donation to increase the supply of organs for transplantation; and informing people about other people's energy consumption to spur them to reduce theirs. Nudges are therefore used to promote the welfare of the people being nudged, and of society at large. However, the use of nudges has sparked a lively normative debate. When turning to the international arena, new arguments for and against nudges can be raised. This essay focuses on the normative aspects of using nudges in the international arena.

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