Allegiant Air Is 2017 Champ for Revenue Innovation Leadership

The top 5 revenue innovators also include Delta, easyJet, GOL, and Ryanair.

IdeaWorksCompany continues an annual tradition by identifying the airlines that have shown the greatest prowess in ancillary revenue, a la carte pricing, and loyalty marketing. This year, Las Vegas-based Allegiant Air takes the top spot.

Throughout 2017, we assessed the top ancillary revenue producing airlines and the most generous frequent flyer 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. These Top 5 Revenue Innovation Champs for 2017 represent the creativity of the front line employees and management teams who delivered exceptional results during the year:

1. Allegiant tops this year’s list because its latest endeavor 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 massive development will fill 20 waterfront acres in Port Charlotte, Florida and include a resort hotel, nine condo towers, restaurants, bars, shops, and a marina. Nearby Punta Gorda Airport (PGD) is served exclusively by Allegiant, which creates an obvious advantage. The airline estimates the Sunseeker Resorts project will bring an additional 300,000 visitors annually to the area with a ten-year economic impact of $1 billion.

2. EasyJet 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.com between Europe and Argentina, Canada, Singapore, and the US.  Canadian connections are provided by WestJet, while the other long-haul destinations are flown by a major competitor ― Norwegian. The relationship is grandly branded “Worldwide by easyJet” and relies upon the GatwickConnects program developed by Gatwick Airport and Icelandic technology company Dohop. IdeaWorksCompany estimates the program will likely generate $200,000 per week in new revenue.

3. Delta Air Lines returns to the top 5 list for a third year. The global carrier has reinvested a portion of its big baggage revenue into a mobile application that allows travelers to view a bag’s location, be it in the baggage room, on the ramp, or planeside. The application also pushes out notifications to alert travelers 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. These enhancements treat baggage service as a true consumer product by providing added value for the fees paid by travelers.

4. Ryanair and its Ryanair Labs group have obviously been very busy. Its mobile application was the most advanced for ancillary revenue retail efforts among those reviewed by IdeaWorksCompany for the world’s top 25 airlines. For instance, Ryanair provides an exceptional example of seat assignment done right. As the consumer scrolls through the rows, the icon and pricing change to reflect the seats being viewed. Color coding readily indicates seat pricing, while double arrows indicate more leg room. Ryanair practices good retailing by using personalized messaging to alert consumers to “on sale” pricing for a la carte items such as select seat assignments and product bundles.  

5. GOL’s new bonus mileage program is called Club Smiles in English. It’s a subscription-based mileage accelerator that charges a monthly fee ranging from BRL$42 ($13) to BRL$299 ($95) for 1,000 to 10,000 bonus miles per month. Membership in Clube Smiles is completely voluntary and is intended to augment regular membership, but the airline is offering a generous sign up bonus with a focus on “Plan 2,000” with an extra-large promotional bonus of 8,000 miles.  Members must subscribe and pay the monthly fee for a minimum of 6 months. In addition to the benefits listed in the table, Clube Smiles promises select discounts on airline and retail rewards, 10-year validity for miles accrued from Clube Smiles, and no reward issuance fees for up to 5 air rewards per year. The result is a program that lifts loyalty and ancillary revenue to new levels with the powerful combination of a frequent flyer program and subscription plan. 

The reports which assessed the service and product innovations for these five companies were sponsored by CarTrawler, which recently renewed its sponsorship relationship with IdeaWorksCompany for 2018. Aileen McCormack, CarTrawler’s chief commercial officer, said: “The five airlines recognized 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.”

IdeaWorksCompany and CarTrawler look forward to another year of ancillary revenue, a la carte, and loyalty marketing analysis and will announce the 2018 innovation selections a year from now.