Airlines find new ways of making you pay
Global airlines are pocketing record amounts from ancillary revenues.
Ancillary revenue is derived from – a la carte, or unbundled services, commission-based services – such as hotel or car rental bookings – and other ancillary services revenue from co-branded credit cards and loyalty programmes.
Based on research by IdeaWorksCompany for Amadeus, ancillary revenue grew to €18.23 billion (US$22.09bn) in 2011. This represents ancillary revenue growth of 66% in two years from the 2009 result of €10.95 billion.
The figures relate to the revenue earned by the 50 airlines (of 108 researched) which disclosed some type of ancillary revenue activity in 2011.
“We’ve seen the industry move swiftly to grasp some clear opportunities for providing ancillary services, such as baggage fees, extra legroom and on-board catering,” says Holger Taubmann, senior VP, distribution at Amadeus.
United Airlines was the clear winner with ancillary revenue of €4.16bn
Analysis of the top ten results show that American (€1.7bn) and Delta (€2.03bn) attain their status through a blend of activities which notably features checked baggage and the sale of frequent flier miles to bank partners.
Qantas (€1.14bn) was helped by its frequent flier programme to take fourth place in the top ten.
Ian Jarrett
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