BULLETINS

As per a recent travel research report, U.S. airlines notched a second consecutive year of 5% revenue growth in 2018. Steady capacity additions, an uptick in passenger volume, improved yield and growth in demand for ancillaries

Here are the four most notable trends and stories that are impacting the U.S. airline segment in 2019:

1. Merchandising: basic economy and beyond

Through their unbundled services Airlines are allowing full-service carriers to compete with low-cost carriers much more effectively and putting an extra effort to make their products appear more promising in an online travel agency search. Carriers are also experimenting with customized bundles, sometimes referred to as "fare families." 

2. Ancillaries: a growing slice of the revenue pie

In 2018, ancillaries accounted for 12%, and is expected to continue trending upward. Over time, it is likely that an airline's process for determining optimal ancillary pricing and positioning within the online shopping and purchasing workflow will become just as complex and sophisticated as that used for its basic fare yield management. 

3. Airlines looking to metasearch to trim online distribution costs 

Faced with high distribution costs in the form of OTA commissions and global distribution system fees, airlines are committed to strengthening direct-to-consumer distribution. This trend has been catalyzed by airlines' growing push with ancillaries.

4. New Distribution Capability (NDC): coming slowly to an airline near you

While NDC adoption has been slow, airlines now see the new standard as a way to raise the product merchandising capabilities of their indirect channels to the same level as their direct channels.