Better economy cabins, fewer fuel surcharges, and more.
Phocuswright reported that 2015 was the fourth straight year for growth in the U.S. travel market, worth a total $341 billion and projected to reach $381 billion in 2017. Of that, $149 billion is expected to go to airlines.
Takeaway: Yes, U.S. travel is expected to surge across the board, but the report notes that airline growth will remain in the low single digits for the next five years, trailing other verticals. An area of investment, if you want to stave off flat growth? Mobile bookings: Phocuswright notes that mobile ballooned 49% last year and should account for a full quarter of online travel bookings by 2017.
CAPA calls the AA-US merger essentially well-executed. The carrier, now the largest in the U.S., boasts a streamlined passenger system and improved operational performance going into 2016.
Takeaway: The carrier now holds nearly one quarter of the total U.S. seats. Up next: Continue to improve on lost-baggage and on-time metrics (2015 was a start) and reverse a trend of falling per-passenger revenues. New partnerships, new fare classes, and new routes should add to AA's top-line growth.
They did the math: Skift calculated the costs to optimize economy-class cabins for comfort and the effect different configurations would have on airline bottom lines. Skift found that "Economy Plus" seats are generally priced about 18% above regular economy fares, or $13.33 per degree of recline. The problem is, only 36% of these seats are occupied by revenue passengers.
Takeaway: While the hypothetical exercise is entertaining, it's also telling that passengers haven't totally bought into the added value of extra-legroom seats. I agree with Skift that passengers are better off when airlines offer highly differentiated ticket tiers, multiple sub-classes within economy, and a few optional comfort upgrades, to satisfy all leisure flyers.
Travel Pulse challenges the idea that the future of airline food is bleak, noting that Delta has recently announced a partnership with celeb chef Danny Meyer as well as calling out Qantas and Virgin Atlantic for their in-flight foodie amenities.
Takeaway: Add to this United's announcement of the return of free snacks in economy class (coming in February). While airlines have turned toward ancillary fees for most services, free meals may still win flyers' hearts. Will more airlines test the waters? Note the love for JetBlue's snack service; is this one of the many small reasons they and Virgin Atlantic have leveraged such strong brands, as I've explored?
As fuel prices fall worldwide, Japan Airlines and ANA are reviewing and cutting fuel surcharges for flights to, from, and within Japan about 10 years after they were introduced. Other Asian carriers have already lowered or cut surcharges as far as back as January 2015.
Takeaway: This trend is noteworthy (and notable) for passengers. At one time, fuel surcharges added as much as $563 to the price of a round-trip trans-pacific ticket from the U.S. and Europe. At home, fares have also slipped as oil prices slump to a 10-year low of $1.01/gallon.