Transportation

Delta Among Most Innovative Airlines of 2014: IdeaWorksCompany

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courtesy of Delta Air Lines
From an airline’s point of view, the most innovate product of the past several years has got to be the checked baggage fee. The fee’s best feature, again from an airline’s point of view, is that it has become a key revenue generator as airlines have been hit by high fuel costs and tight profits.

This year has been good to airlines, with the three U.S. legacy carriers posting share price gains of at least 72% and the country’s largest low-cost carrier more than doubling. Falling fuel prices in the second-half of the year have helped, but it is those fees that have turned things around. In fact, IdeaWorksCompany, a firm that consults with airlines on ways to increase ancillary revenues, and car rental distribution firm CarTrawler estimated that ancillary revenues will reach $49.9 billion worldwide in 2014, more than double the $22.6 billion total reached in 2010.

Now IdeaWorksCompany has announced its list of the five airlines that have demonstrated “the greatest prowess in the areas of ancillary revenue, a la carte pricing, and loyalty marketing.” That is, the good ideas that have paid off the best in 2014.

Vueling Airlines, a low-cost Spanish carrier, introduced a My25% program this year that delivers a simple 25% discount to travelers who subscribe to one of its plans. For example, a three-month subscription for a 25% discount on a flight to any airport in Spain costs €99 and a three-month subscription for the discount to any destination Vueling serves costs €149. Six-month subscriptions are also available.

Delta Air Lines Co. (NYSE: DAL) is the only U.S. carrier to make the list, and that is due to the company’s decision to switch its frequent flyer program from a distance-based reward to a reward based on the price of the ticket.

Wizz Air, a Hungarian carrier, makes the list for “a continuous roll out of a la carte services and a very transparent and effective online booking process.”

Ireland-based RyanAir Holdings PLC (NASDAQ: RYAAY) gets the nod for fixing things that its customers don’t like in an effort to reduce the conflict between front-line staff and passengers.

Jeju Air is a low-cost Korean airline that makes the list for its free travel lounges that “specialize in the booking of commission-based services for travelers and operate as ‘ancillary revenue incubators.’”

IdeaWorksCompany noted that it did not have a business relationship with any company on this list in 2014.

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