Hopper Insights Cheat Sheet: 17 November 2015

Nick Young - Nov. 11, 2015

Airline fees are up, routes are competitive, and mobile booking is surging in China.

1. Airline Fee Revenue Expected to Reach Nearly $60 Billion in 2015

Ancillary revenue is projected to increase another 19% over last year, reaching a total $59.2 billion in 2015. Baggage fees represent about 20% of that total, with other a la carte services like Wi-Fi and meals making up another 20%.

Takeaway: Ancillaries are taking off ... and proving profitable. New product offerings like unbundled fares and branded fare tiers, such as JetBlue Flex, allow consumers distinct choices. They're also good for airlines' bottom lines. Is this becoming the new standard?

2. American Airlines on Cuba: 'We're Ready to Go Now'

As Cuba and the U.S. continue to mend fences, legacy airlines are preparing to operate commercially to Havana. Among them, American Airlines is the first to call Cuba a "high priority" in its future plans.

Takeaway: New routes are always exciting, but rarely does an entire country open for an airline's business. Better yet, Havana has the potential to be both a leisure and a business market for U.S. carriers. The only question remaining is, which airline will make the first move?

3. Skyscanner to Provide Voice Flight Search for Amazon Echo

Skyscanner will be integrating with Alexa, Amazon's new cloud-based voice service, to allow users to research flight options via "conversational search" by directly connecting Skyscanner's API into the system.

Takeaway: Alexa systems cost $200, and industry insiders are skeptical of adoption rates. But even if conversational search doesn't prove a success, this news is yet another sign that third-party sites and applications are innovating the flight-search experience quicker than airlines can.

4. Airbus Eyes Gulf Carriers or New Ultra Long-Range Crafts

Reports say that the Airbus' new A350-900 ultra-long-range commercial jet (which can fly for up 19 hours without stopping) is being shopped to the three rapidly expanding Gulf airlines: Emirates, Etihad, and Qatar.

Takeaway: Singapore Airlines has already ordered seven of the new jetliners, and the Gulf carriers seem like obvious buyers, too: All three have quickly become long-haul powerhouses while actively exploring new non-stop routes. Airlines with older fleets stand to lose a lot of ground.

5. Travel's New Digital Funnel: Consumer Buying Continues to Evolve

Phocuswright's new study finds that travelers are more likely to use mobile devices to shop for air compared to hotel and that specifically China and Brazil are using their smartphones to shop for travel the most, with a full 53% of Chinese travelers shopping for hotels and flights on their phones.

Takeaway: Emerging markets going mobile, smartphone apps taking a bigger slice of the booking pie, and larger phone screens driving better mobile conversion rates? Phocuswright is right: mobile has fundamentally changed how global consumers travel.

6. WOW Air Launches Flights to Los Angeles, San Francisco, More

The Icelandic low-cost carrier announced that it's launching flights from two California cities and two Canadian points (Toronto and Montreal), to Europe in 2016. The new West Coast routes will use WOW's newly leased wide-body A330s instead of the narrow-body aircraft currently serving the East Coast.

Takeaway: The transcontinental routes are a sure sign of growth for WOW as it competes with other low-cost competitors in the U.S. This West Coast service will almost certainly drive down prices to Europe, as we've already seen on the East Coast. Good news for flyers; uncertain futures for once-dominant carriers.


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