Airlines see ancillary revenues jump

Airlines see ancillary revenues jump

Ancillary revenue achieved by the top ten airlines in the world leapt to almost $26 billion last year from $8.4 billion in 2008.

The figures appear in new analysis which shows that the best ancillary revenue results have doubled in the seven year period.

Annual ancillary revenue ranges from just over $1 billion to $6.2 billion achieved by United Airlines.

The top performer per passenger in 2015 was US carrier Spirit, at $51.80 per passenger.

Spirit also tops the list for revenue share, at 43% of total sales, according to the CarTrawler-sponsored report by IdeaWorksCompany.

“Ancillary revenue represents the safety net which determines whether low fares can coexist with airline profitability,” the report says.

“Even with a dramatic fall in oil prices, ever-present competition requires successful airlines to be ever-innovative in the quest for revenue.

“The potential for adding 10%, or even 43%, more revenue to the bottom line ensures ancillary revenue will continue to grow.”

CarTrawler chief commercial officer Michael Cunningham said: “Airlines can now choose from an ever more sophisticated range of ancillary products and technology.

“The challenge is to ensure that the ancillary benefits do not overshadow the core principles of customer experience that airlines have built their brands on.

“The opportunity is to deliver a personalised offering that complements their brand promise. Airlines that do this will see ancillary revenue gains, increased brand loyalty and a boost in customer lifetime value.”

Results from 67 airlines that disclosed information will be released in September.

A companion report, scheduled for publication in November, will use these results to extrapolate total ancillary revenue generated by 180 airlines around the world.


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