Car Rental Continues as Leading Revenue Source for Airlines

Car rental continues to be a top source of global ancillary revenue for airlines and the travel industry, according to a report shown on the Moodie Report.

The 13-page report, titled "Planes, Cars, and Ancillary Revenues," was conducted by airline ancillary revenues consultancy IdeaWorks.

The report on the $35 billion global car rental industry states that the health of the airline industry traditionally determines the success of any car rental company. Car rentals are among the top commission-generating services sold on airline Web sites, along with hotel bookings and travel insurance.

These commission-based services finished ahead of checked baggage, priority boarding, seat assignments and pre-ordered meals.

The report states that multi-supplier and broker methods provide more auto rental choices for consumers, while exclusive relationships limit brand choice to a single supplier.

The report lists Hertz as a leader in the category of exclusive deals. For example, it is the sole booking partner for Aer Lingus, Air France and Ryanair. The company paid €29.9 million to Ryanair for the carrier's fiscal year ended March 31, 2010.

Virgin Blue, which uses multi-supplier method, offers Europcar, Hertz and Thrifty as preferred partners along with more than 550 car rental suppliers. The report states that consumers respond positively to a larger choice of brands, vehicles, and prices.

Virgin Blue's policy of making car rental a part of the online booking process and by rewarding customers with bonus frequent flier points is a "best practice," according to the report. The airline's rental bookings increased 38 percent when it moved from a single supplier relationship.

To read the full report, click here.

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