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Amadeus

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Helping find a cure for the perpetual weakness of airline profits

Jay Sorensen

President of the IdeaWorks Company and author of the Amadeus Yearbook of Ancillary Revenue

Since the Amadeus Worldwide Estimate of Ancillary Revenue was first issued in 2010, the numbers posted in regions all over the world have demonstrated convincing increases.

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That’s my mission and it’s based upon a belief that ancillary revenue benefits consumers and the airlines that fly them.

I remember the folly of a prediction made by the chairman of one of Europe’s leading airlines about 20 years ago. He said European travelers would not embrace the “American sickness” known as frequent flier programs.

I shook my head in disbelief. The man didn't know his customers. Almost everyone on the planet enjoys the words “free of charge.” Years later, every major airline in the world undoubtedly considers their frequent flier program to be a crucial commercial element for revenue success.

There was similar doubt expressed by airline leaders in 2005 when the low cost airline industry was just taking off in India. I recall reading commentary that consumers in India would reject the low cost model if it didn't deliver a free hot meal on domestic flights.

Again, I shook my head in disbelief. Almost every consumer will defer curry and a Coke if they can save some cash. And now years later, the skies of India are filled with carriers that offer buy-on-board programs, such as GoAir, IndiGo, JetKonnect, and SpiceJet.

You can imagine my surprise when I read most airlines will never abandon the perk of a free checked bag.  In reality, it’s becoming a major area of consulting activity that airlines all over the globe now request. It’s only part of my humble goal to help cure this patient of its perpetual ailment of profit paralysis.

Have a look at the full press release for more details.