Table of Contents
Scope and Themes
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- What you need to know
- Definition
- Data sources
- Sales data
- Consumer survey data
- Advertising creative
- Abbreviations
- Terms
Executive Summary
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- Airline industry starts to recover in 2009, despite lower revenues
- Travel market faces competition from online business meeting options
- Fees account for increasing share of the market
- Airline positioning more affected by mergers than changes in revenue
- Brand perception muddled by copycat tactics
- Social media creates brand differentiation—not always benefitting airlines
- Serving up premium perks
- DOOH, product placement, sponsorship, sweepstakes driving branding
- HH income primary driver of frequency
- Nickels and dimes adding up…
- … but majority of flyers not buying
- Price remains primary
- Frequent flyer programs have limited efficacy
- Asians and online English-language Hispanics carry special weight
Insights and Opportunities
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- Key points
- Going Green
- Southwest lightens load
- Continental tests biofuel
- Expedia offering carbon offsets through TerraPass
- Environmental concerns motivate vocal minority of passengers
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- Figure 1: Willingness to pay a premium for environmentally-sound practices, by age, February 2010
- Upgrades as sweepstake prizes
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- Figure 2: Attitudes towards flying first class, by age, February 2010
- His and her tickets
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- Figure 3: Factors in selecting airline, by gender, February 2010
- Branded food to lift in-flight sales
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- Figure 4: Taking food on to the plane, by age, February 2010
- Branding around timeliness
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- Figure 5: Checking on-time arrival record, by age, February 2010
- Flexibility to attract passengers
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- Figure 6: Buying two one-way tickets, by age, February 2010
- First-time on board airline promotions
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- Figure 7: Attitudes towards airline choice, by age, February 2010
- CBT to fight fear
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- Figure 8: Flying less because of fear of flying, by age, February 2010
- Time and convenience add-ons
- Carry-on bags and early boarding
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- Figure 9: Concern over carry-on space and interest in early boarding, by age, February 2010
- The quiet area
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- Figure 10: Willingness to pay extra for a designated quiet area, by age, February 2010
- Re-thinking full fare ticket pricing
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- Figure 11: Willingness to pay for extra for tickets that can be changed without penalty, by age, February 2010
Inspire Insights
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- Digital Natives Creating Mini Generations
- How it impacts the market
- Making the OTT connection
- Freedom to experiment with web entertainment, for all ages
Market Size and Forecast
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- Decreased revenue masks story of decreased losses in 2009
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- Figure 12: U.S. sales and forecast of leading airlines at current prices, 2004-14
- Figure 13: U.S. sales and forecast of leading airlines at inflation adjusted prices, 2004-14
Competitive Context
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- Key points
- Business travel hurt by face-to-face online meetings
- Corporate travel spending down
- The role of video conferencing
- Automotive travel most preferred option for domestic travel
- Buses, recreational vehicles may have similar appeal but to different age groups
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- Figure 14: Means of travel used (car vs. plane vs. bus vs. boat vs. train), by age, November 2008-December 2009
Segment Performance
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- Key points
- Incidentals rise as ticket sales fall
- Lower-cost tickets come with high change fees
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- Figure 15: U.S. airline revenues, by segment, 2004-14
- Figure 16: U.S. airline operating revenue, by segment, 2007 and 2009
Leading Companies
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- Key points
- Despite decreased revenue, positioning remains unchanged
- Merger makes United leading airline
- Low-cost airlines weather challenges, revenues turn black in ‘09
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- Figure 17: Operating revenues of top airlines, 2008 and 2009
Brand Qualities
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- Key points
- Following the leader limits brand differentiation
- Brands perceived under the gaze of social media
- Easy access to digital distribution gives consumers a voice for complaints
- Low-cost carriers appear more on-the-ball with social media
- United (and Continental) Airlines
- Merger between Continental and United
- Southwest Airlines
- American Airlines
- Jet Blue
- US Airways
- JetBlue, Southwest skew young
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- Figure 18: Airline used for last domestic trip, by age, November 2008-December 2009
- Low-cost airlines benefited from weak economy
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- Figure 19: Airline used for last domestic trip, trended, January 2005-December 2009
- Under-25s vacation in Mexico
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- Figure 20: Airline used for last foreign trip, by age, November 2008-December 2009
Innovation and Innovators
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- Key points
- Segmented marketing
- American Airlines courts African-American flyers
- United specializes in college frequent flyer program
- New tiers for preferred customers
- In-flight cocktails
- Southwest donates with Medical Transportation Grant Program
- Jet Blue re-writes frequent flyer book
- Credit card programs innovating with super-premium options
Advertising and Promotion
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- Key points
- United sweeps
- The sport of flying
- … and in the movies
- Delta does DOOH
- Television advertising
- JetBlue: Entertainment options and seat pitch at a low cost
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- Figure 21: JetBlue television ad, 2009
- Figure 22: JetBlue television ad, 2009
- Delta chases local market
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- Figure 23: Delta television ad, 2009
- American knows why business travelers fly
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- Figure 24: American Airlines television ad, 2009
- Southwest trumpets bags flying free
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- Figure 25: Southwest Airlines television ad, 2009
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- Figure 26: Southwest television ad, 2009
Usage
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- Key points
- Domestic travel drops—particularly vacation
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- Figure 27: Trended domestic airline travel, January 2005-December 2009
- Foreign travel remains more stable
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- Figure 28: Trended foreign airline travel, January 2005-December 2009
- Half have flown in the last year
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- Figure 29: Flights taken in last 12 months, by age and income, November 2008-December 2009
- Average two roundtrip flights per person
- Income central driver in frequency of trips
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- Figure 30: Domestic flights taken in last 12 months, by household income, November 2008-December 2009
- Two fifths have traveled out of the U.S. in the last three years
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- Figure 31: Foreign flights taken in last three years, by household income, November 2008-December 2009
- Class flown: Men, under-35s more likely to fly high-class
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- Figure 32: Class flown on most recent flight, by gender and age, February 2010
In-flight Purchasing
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- The nickel-and-dime business adds up
- Room for growth remains
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- Figure 33: Items bought in-flight, by gender, February 2010
- Younger flyers make more purchases in-flight
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- Figure 34: Items bought in-flight, by age, February 2010
Choosing an Airline
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- Selection by price makes unbundling an industry priority
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- Figure 35: Considerations in selecting airline, February 2010
- Under-35s more interested in food, entertainment
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- Figure 36: Considerations in selecting airline, by age, February 2010
Booking Tickets
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- Figure 37: How flight reservations were made, by age, February 2010
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Frequent Flyers
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- Key points
- Young passengers less enrolled in frequent flyer programs
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- Figure 38: Any frequent flyer membership, by age, April 2008-June 2009
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- Figure 39: Any frequent flyer membership, by household income, April 2008-June 2009
- Membership of specific programs
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- Figure 40: Specific frequent flyer program memberships, by age, April 2008-June 2009
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- Figure 41: Specific frequent flyer program memberships, by household income, April 2008-June 2009
- The need for lower-mileage awards
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- Figure 42: Attitudes towards frequent flyer programs, by age, February 2010
- Encouraging lower-income flyers to sign up
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- Figure 43: Attitudes towards frequent flyer programs, by household income, February 2010
Impact of Race/Hispanic Origin
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- Key points
- Asians, whites take more domestic flights
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- Figure 44: Flights taken in last 12 months, by race and Hispanic origin, November 2008-December 2009
- Asians flyers lead in frequency
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- Figure 45: Flights taken in last 12 months, by race and Hispanic origin, November 2008-December 2009
- Marketing to Hispanics online likely to yield more attractive demographic
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- Figure 46: Items bought in-flight in the last year, by race/Hispanic origin, February 2010
- Black respondents seek legroom, online Hispanics/Asians want internet
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- Figure 47: Considerations in selecting airline tickets, by race/Hispanic origin, February 2010
Cluster Analysis
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- High-class flyers
- Characteristics
- Demographics
- Opportunities
- Loyalists
- Characteristics
- Demographics
- Opportunities
- Infrequent flyers
- Demographics
- Characteristics
- Opportunity
- Characteristic tables
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- Figure 48: Airline clusters, February 2010
- Figure 49: Frequency of air travel, by airline clusters, February 2010
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- Figure 50: Class flown on most recent flight, by airline clusters, February 2010
- Figure 51: In-flight purchases, by airline clusters, February 2010
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- Figure 52: Factors in selecting carrier, by airline clusters, February 2010
- Figure 53: Frequent flyer status and attitudes, by airline clusters, February 2010
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- Figure 54: Attitudes toward air travel, by airline clusters, February 2010
- Figure 55: Opportunities in incremental sales, by airline clusters, February 2010
- Demographic tables
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- Figure 56: Airline clusters, by gender, February 2010
- Figure 57: Airline clusters, by age, February 2010
- Figure 58: Airline clusters, by household income, February 2010
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- Figure 59: Airline clusters, by race, February 2010
- Figure 60: Airline clusters, by Hispanic origin, February 2010
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- Figure 61: Airline clusters, by employment, February 2010
- Cluster methodology
Appendix: Enplanements Data
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- Domestic enplanements dwarf international enplanements
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- Figure 62: U.S. enplanements, domestic vs. international, 2004-09
- Figure 63: U.S. enplanements, domestic vs. international, 2007-09
Appendix: Additional Useful Tables
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- Interest in fast passes through security
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- Figure 64: Interest in a priority line at security, by age, February 2010
- Limited changes seen in international airline selection 2005-09
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- Figure 65: Airline used for last foreign trip, trended, November 2008-December 2009
Appendix: Trade Associations
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