2010 Amadeus Guide to Ancillary Revenue by IdeaWorks, Page 1

2010 Amadeus Guide to Ancillary Revenue by IdeaWorks, Page 2

Table of Contents

Welcome Aboard the Third Ancillary Revenue Guide ......................................................................................... 8

Selections from a Global a la Carte Menu ........................................................................................................... 11

Long Live the Revolution ..................................................................................................................................... 11

Something New or Just Another Fee ................................................................................................................ 13

Managing Ancillary Revenue ................................................................................................................................ 16

Annual Pre-Paid Plans and Passenger Loyalty ................................................................................................. 18

Frequent Flier Programs Finally Participate ..................................................................................................... 20

Food is the Next Frontier ................................................................................................................................... 21

Test, Change, and Measure .................................................................................................................................. 25

The Revolution Continues .................................................................................................................................. 27

Discovering New Worlds of Onboard Merchandising ...................................................................................... 28

The Corps of Discovery ...................................................................................................................................... 28

Old World Catering Traditions ........................................................................................................................... 29

The State of Catering Today................................................................................................................................ 30

Exploring Bold New Worlds ............................................................................................................................... 31

Building the Restaurant Check ........................................................................................................................... 32

Boosting Revenue by Breaking Routines .......................................................................................................... 34

Selling by Making it Easy to Buy ......................................................................................................................... 37

Menus, M&Ms, and Offering More ..................................................................................................................... 39

Chart Your Own Course ..................................................................................................................................... 41

Worldwide Financial Statistics from Leading Airlines ........................................................................................ 44

Airlines Posting Ancillary Revenue Results ...................................................................................................... 46

Europe and Russia ................................................................................................................................................. 50

The Americas ......................................................................................................................................................... 64

Asia and the South Pacific ................................................................................................................................... 84

Middle East and Africa .......................................................................................................................................... 90

Currency Exchange Rates Used for the Worldwide Statistics .................................................................... 93

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AirAsia X Stretches a la Carte to Fit the Globe ................................................................................................ 94

Low Cost Long-Haul Becomes a Success ........................................................................................................ 94

London to Kuala Lumpur and Beyond .............................................................................................................. 95

AirAsia X is an a la Carte Hybrid ...................................................................................................................... 96

Going Upscale in a Big Way ................................................................................................................................ 98

AirAsia X Defines Long-Haul a la Carte .......................................................................................................... 99

More a la Carte All Over the World ............................................................................................................... 100

How Ryanair is Trying to Change the World ..................................................................................................... 101

The Psychology of Michael O‘Leary ............................................................................................................... 101

Love the Fare, Hate the Airline ........................................................................................................................ 103

The Ryanair Way of Passenger Behavior ........................................................................................................ 105

Sell, Sell, Sell .......................................................................................................................................................... 107

Lowest Price Wins .............................................................................................................................................. 109

Stories from the Field ............................................................................................................................................. 110

Peter Gerstle ‒ easyJet ...................................................................................................................................... 111

Azran Osman-Rani ‒ AirAsia X ....................................................................................................................... 112

Damien Paries ‒ Corsairfly ............................................................................................................................... 113

Michel Teychené ‒ Air France/KLM ................................................................................................................. 114

Pia Viljaniemi ‒ Finnair ........................................................................................................................................ 115

The Amadeus Guide to Ancillary Revenue by IdeaWorks

Published by the IdeaWorks Company

Shorewood, Wisconsin, USA

IdeaWorksCompany.com

October 2010

2010 Amadeus Guide to Ancillary Revenue by IdeaWorks, Page 4

About Jay Sorensen, Writer of the Report

Jay Sorensen‘s research and reports have made him a

leading authority on frequent flier program

development and the ancillary revenue movement.

For 2010 he is a keynote speaker at Mega Event 2010

(FFP/ARAC) the annual worldwide conference for

ancillary revenue and frequent flier programs. This

event, developed by Airline Information, has been a

resounding success for many years. More than 300

executives representing 75 airlines from all over the

world are expected to attend the October 2010

event in Montreal. In addition, he will also speak on

the topic of ―Moving to Merchandise Methods in the

Cabin‖ at the global Amadeus airline conference ―Horizons‖ which will be held in San Francisco

October 2010. The 2010 Amadeus Guide to

Ancillary Revenue by IdeaWorks is the third edition

of this guide.

Mr. Sorensen is a veteran management professional with 26 years experience in product, partnership,

and marketing development. As president of the IdeaWorks consulting firm, he has enhanced the

generation of airline revenue, started loyalty programs and co-branded credit cards, developed

products in the service sector, and helped start airlines and other travel companies. His career

includes 13 years at Midwest Airlines where he was responsible for marketing, sales, customer

service, product development, operations, planning, financial analysis and budgeting. His favorite

activities are hiking, exploring and camping in US national parks with his family.

About Eric Lucas, Editor of the Report

Eric Lucas is an international travel and business writer and editor whose

work appears in the Los Angeles Times, Michelin travel guides, MSN/Bing

Travel, Alaska Airlines Magazine, Westways Magazine and numerous other

publications. Founding editor of Midwest Airlines Magazine, he is the

author of five books, including the 2009 Michelin British Columbia Green

Guide. Eric has followed and written about the travel industry for more

than 20 years. He lives in Seattle‘s Ballard neighborhood, where he grows

and sells organic garlic; visit him online at www.TrailNot4Sissies.com.

Jay Sorensen with sons Anton and Aleksei in Mount Rainier National Park in Washington.

Eric, at his favorite summer

retreat, Steens Mountain, Oregon.

2010 Amadeus Guide to Ancillary Revenue by IdeaWorks, Page 5

Disclosure to Readers of this Guide:

IdeaWorks makes every effort to ensure the quality of the information in this guide. Before relying on

the information, you should obtain any appropriate professional advice relevant to your particular

circumstances. IdeaWorks cannot guarantee, and assumes no legal liability or responsibility for, the

accuracy, currency or completeness of the information.

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