The new CarTrawler Ancillary Revenue Yearbook by IdeaWorksCompany (2016 edition) revealed a total of US$40.5 billion in ancillary revenue, comprising nearly 8.7% of total sales, for 67 airlines.
Europe’s carriers performed well, contributing US$11 billion.
For the survey IdeaWorksCompany researched financial filings made by 135 airlines around the world, with 67 disclosing qualifying revenue activity − four more airlines than in the 2015 Yearbook.
The report, sponsored by CarTrawler, provides a detailed global review of a proven revenue source that delivers US$6.2 billion for United Airlines, 36.4% of sales for Wizz Air, and US$51.80 per passenger carried by Spirit Airlines.
The survey covers airlines that disclosed revenue in 2015 financial filings from activities such as frequent flier miles sold to partners, fees for checked bags, and commissions from car rentals.
Fees for checked baggage contributed to the revenue boost. (Image credit: RossellaApostoli/iStock)
This year’s edition also includes a list of the a la carte items sold through Amadeus, Sabre, and Travelport for each of the 67 airlines.
For example, optional extras for baggage, seat assignments, meals and sports equipment can be booked through Travelport-equipped agencies on AirAsia, and baggage, meals and unaccompanied minors can be booked for Pegasus through the Amadeus system.
Michael Cunningham: Airlines offering ancillary add-ons can become a one-stop shop for travel. (Image credit: CarTrawler)
“As one of the first products purchased for any journey, airlines have privileged access to customer travel itineraries before anyone else does. In order to capitalise on this competitive advantage, airlines need ensure they maintain ownership of their customer relationship and utilise the valuable data they already have access to, enabling them to act like a responsive travel assistant,” said Michael Cunningham, CarTrawler’s chief commercial officer.
“By offering their customers timely ancillary add-ons, they have the ability to become a one-stop shop for travel – driving brand loyalty, revenue and profit”,
The largest numbers were registered by US major carriers such as United, Delta and American. The leader in ancillary revenue share is Spirit, at 43.4%.
Other individual airline highlights found in the yearbook include :
- Air Canada’s share of payouts made by the Aeroplan loyalty programme for the purchase of reward travel was $548 million.
- Allegiant Air sold 453,272 hotel room nights and 1,204,982 car rental days to passengers, which contributed to ancillary revenue from third parties of US$40.2 million for the year.
- Delta enjoyed a revenue boost of US$125 million from its Comfort+ seating product during the Q4 2015.
- Jet2.com in the UK-based airline is truly a holiday-oriented airline (and an ancillary revenue leader) with package holiday customers representing 41.5% of all passengers flown.
- Qatar Airways posted stunning revenue of US$528 million from the sale of duty free goods and beverages associated with its Qatar duty free operation.
- Southwest’s revenue from EarlyBird check-on is estimated to be US$260 million for 2015.
- United disclosed mileage sales of US$2.99 billion for 2015 with the majority of miles sold to Chase Bank for the MileagePlus co-branded credit card.
The 2016 CarTrawler Yearbook of Ancillary Revenue by IdeaWorksCompany is a free report. Download it here.
• Featured image credit: kovalchuk/iStock
