ATME 2015 Forecast & Think Tank
Venue: The New York Times, New York
Date: January 21, 2015 • Time: 10:15am – 2:30pm
Host: Michael Carroll, The New York Times
Henry Harteveldt, industry analyst and founder of Atmosphere Research Group, opened the meeting by sharing his perspective of the airline industry, focusing on the US market.
After years of battling thin margins and unsteady demand, airlines are performing well, producing excellent business results. The event coincided with airlines starting to report their December 2014 quarterly earnings, so Henry began his presentation by reviewing US airlines’ results. A key point: US airlines’ profits were attributable to their ongoing focus on “ancillary revenues,” the revenue earned from the sale of optional products. Henry shared how Atmosphere’s research shows airlines earned about 12% of their revenues from ancillary products in 2014 – and expect that to grow to represent 19% of their revenues by 2017.
Henry concluded with highlights from Atmosphere’s Q4 2014 global survey of 38 airline marketing, distribution, and eCommerce executives. Marketing remains a function that struggles to get the funding and respect it truly deserves, and is accorded at hotels and cruise lines. Just one in five of the executives surveyed anticipate marketing will be more important to their carriers in 2015 (73% expect their airlines’ focus on marketing will not change). Most (82%) expect their 2015 budgets will stay flat from 2014 – good news, if you view that they’re not being cut, but a concern given media inflation. The three media categories where they expect budgets to grow the most will be SEO, loyalty marketing, and mobile, channels where attribution models can point to revenue contributions and, in mobile’s case, a channel that is truly the new gateway to the traveler.
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