Airline ancillary revenue projected to reach £59bn this year

Airline ancillary revenue projected to reach £59bn this year

Airline ancillary revenue is projected to rise by $10 billion to reach $59.2 billion worldwide this year.

The figure represents an increase of 163% from the 2010 figure of $22.6 billion and compares wit last year’s level of $49.9 billion, a study by CarTrawler and specialist consultancy IdeaWorksCompany reveals.

Revenue from optional services, such as onboard sales of food and drink, checked baggage, premium seat assignments, and early boarding benefits, was determined to represent $36.7 billion of the projected total for 2015.

The smaller share, at $22.5 billion, comes from non-fee activity such as the sale of frequent flier miles to programme partners, and commissions earned on the sale of services to travellers, such as hotel accommodations and car rentals.

The ancillary revenue disclosed by 63 airlines for 2014 was disclosed earlier this year by the two companies.

These statistics were applied to a larger list of 180 airlines to provide a global projection of ancillary revenue activity by the world’s airlines in 2015.

CarTrawler chief commercial officer, Michael Cunningham, said: “These figures show the impact that ancillary revenue has on the bottom lines of airlines, but it is also a critically important element of the customer experience.

“Airlines that offer a rounded, sophisticated customer experience by drawing on data science insights and the right ancillary offerings have a better chance of backing up revenues with increased loyalty and a stronger brand promise, which in turn leads to increased repeat bookings.”

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