20 January 2011

2010 In the USA. Its all Up and it was all Change.

In looking at the numbers from the travel agency community – everything looks positive. By any metric the numbers are very positive. Top line. ARC (US) reports 2010 domestic US travel increased 7 percent, reaching levels near pre-crisis in 2008, with 76 of top 100 airports gaining traffic.

No ifs ands or buts – its all good in the distribution hood. http://www.arccorp.com/news/stat/2010-12.jsp

The newly revised annual figures from ARC are a good way to look at the numbers. However note there is one metric not listed here. Ancillary Revenues. These numbers will take perhaps until April to get a complete picture of what has transpired. We know that the airlines made a boat load of cash in 2010. We further know that the move to ancillary services has been growing. On my recent DL flight the price of a drink internationally has grown to $7.

Despite a lot of hand wringing on the issue of ancillaries and even a little bit of wrist slapping (FR) clearly Ancillaries are here to stay and will be a critical part of the airline product mix.

In the USA that move is inescapable. In other markets it will not be quite as easy a sale. Further evidence that while the airlines are changing – the process of splintering of different business models as well as different strategies of distribution are now fully under way. No amount of GDS interference nor pseudo (or real) customer annoyance can derail that process. The cusp of change has already arrived. This is an immutable force. Like it or like it now we are going through radical change.


1 comment:

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