Airlines are seeing healthy revenue from ancillary activities, going up nearly 21% in 2014 to US$38.1 billion from the previous year.
The data is revealed in the 2015 CarTrawler Yearbook of Ancillary Revenue by IdeaWorksCompany that compiled disclosures from 63 airlines worldwide, out of researched financial filings made by 130 airlines worldwide.
The US$38.1 billion ancillary revenue from these airlines for 2014 represented more than $35.6 billion increase since 2007, and that number is up 20.9% over $31.5 billion from 2013.
Airlines enjoying healthy revenue from ancillaries. (Image credit: intararit iStock)
The report said that ancillary revenue is a bottom-line-booster that can represent 38.7% of a carrier’s revenue, as it does for Spirit Airlines in the US, or US$56.28 per passenger for Jet2.com in the UK, and US$5.86 billion for global behemoth United Airlines
New for 2015 is a list of the a la carte items sold through Amadeus, Sabre, and Travelport for each of the 63 disclosing airlines. For example, optional extras for baggage, seat assignments and meals can be booked through Sabre-equipped agencies on Airberlin, and seat assignments and baggage can be booked for Qantas through the Amadeus system.
Examples of ancillary revenues by some airlines featured in the yearbook:
- AirAsia, Asia’s largest low cost carrier, offering inflight chat service through the aircraft WiFi network at a price of 8 Ringgit (US$3) to support WeChat, WhatsApp and LINE chat applications.
- Lufthansa’s Miles & More frequent flier programme contributed income in excess of $90 million which more than doubles the 2013 amount.
- Ryanair believes 25% of its passengers are business travellers, and up to 9,000 a day are buying its Business Plus fare bundle.
- Alaska introducing Preferred Seating (extra 7 to 9 inches of legroom, free drink, and priority boarding) in 2015 which is expected to initially provide $15 million annually.
- Volaris, a low fare airline in Mexico, generated more than $3.5 million from the sale of memberships in its V-Club, which provides access to members-only low fare deals.
- Vueling’s ancillary revenue per passenger was US$15.45 during 2014, but the average for bookings made exclusively via direct channels (such as the website) leaps to US$29.19.
