Study shows the scale of airline ancillary sales
The amount of ancillary revenue earned by airlines has increased by a staggering 778% since 2007.
That was one of the findings of a new report by IdeaWorks into the sale of ancillary products such as premium seats, checked baggage and inflight entertainment.
“The oil price peak of 2008 caused huge losses and prompted US airlines to start charging travellers for checked baggage,†said the report.
“Ultimately, the ripple effect of these fees has eased the path for more airlines to consider à la carte additions and catalyzed a stunning increase of 778% since 2007.â€
The report said that while the list of top players in 2007 was dominated by carriers such as Ryanair, easyJet and Aer Lingus, other carriers have since jumped on the bandwagon.
“American, Delta, and United have been very pleased by the payout from baggage fees, which now contribute hundreds of millions of dollars to the income statements of US-based carriers,†it said.
“Consumers have grumbled, but they too are aware of the higher prices paid when they fill their automobile tanks. The price of oil has been testing the same levels as it did back in 2008, and this will likely trigger the spread of baggage fees to more global markets such as Asia and South America. The tightly woven world of airline alliances and codeshare operations will almost certainly require the alliances to accept a new wave of bag fees.â€
According to the report, the top 10 airlines based on ancillary revenue per passenger in 2010 are:
AirAsia € 29.45
Qantas € 26.24
United Continental € 24.23
Jet2.com € 24.20
Allegiant € 23.20
Spirit € 17.76
Aer Lingus € 17.67
Alaska Airlines € 16.72
Delta € 16.06
Flybe € 14.84
The top 10 airlines in relation to ancillary revenue as a percentage of total revenue in 2010 are:
Allegiant 29.2%
Spirit 22.6%
Ryanair 22.1%
Jet2.com 21.0%
Tiger Airways 20.5%
easyJet 19.2%
AirAsia 18.7%
AirAsia X 18.1%
Flybe 15.7%
United Continental 14.7%
by Bev Fearis
Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
Vegas’s Billion-Dollar Secrets – What They Don’t Want Tourists to Know
Visit Florida’s New CEO Bryan Griffin Shares His Vision for State Tourism with Graham
Chicago’s Tourism Renaissance: Graham Interviews Kristin Reynolds of Choose Chicago
Graham Talks with Cassandra McCauley of MMGY NextFactor About the Latest Industry Research
Destination International’s Andreas Weissenborn: Research, Advocacy, and Destination Impact
Graham and Don Welsh Discuss the Success of Destinations International’s Annual Conference
Graham and CEO Andre Kiwitz on Ventura Travel’s UK Move and Recruitment for the Role
Brett Laiken and Graham Discuss Florida’s Tourism Momentum and Global Appeal
Graham and Elliot Ferguson on Positioning DC as a Cultural and Inclusive Global Destination
Graham Talks to Fraser Last About His England-to-Ireland Trek for Mental Health Awareness
Kathy Nelson Tells Graham About the Honour of Hosting the World Cup and Kansas City’s Future
Graham McKenzie on Sir Richie Richardson’s Dual Passion for Golf and His Homeland, Antigua
ADS PRO 
Airlines suspend Madagascar services following unrest and army revolt
TAP Air Portugal to operate 29 flights due to strike on December 11
Qatar Airways offers flexible payment options for European travellers
Airbnb eyes a loyalty program but details remain under wraps
Air Mauritius reduces frequencies to Europe and Asia for the holiday season