US airline ancillary revenue to grow

Eleanor Steed
By Eleanor Steed December 1, 2017 17:27

US airline ancillary revenue to grow

A new report from IdeaWorksCompany and CarTrawler, project airline ancillary revenue will reach $82.2 billion worldwide in 2017.  The CarTrawler Worldwide Estimate of Ancillary Revenue represents a 264% increase from the 2010 figure of $22.6 billion, which was the first annual ancillary revenue estimate.

Earlier this year, CarTrawler and IdeaWorksCompany reported the ancillary revenue disclosed by 66 airlines for 2016.  These statistics were applied to a larger list of 184 airlines to provide a truly global projection of ancillary revenue activity by the world’s airlines for 2017.

Revenue included in the report includes commissions gained from hotel bookings, the sale of frequent flyer miles to partners and the provision of a la carte services. Optional services such as the sale of food and beverages, checked baggage, premium seat assignments and wifi access are projected to be worth $57 billion of the total revenue, while the remaining $25.2 billion comes from non-fee activities such as the sale of frequent flyer miles to programme partners and commissions earned on the sale of car hire, hotel rooms and travel insurance.

The analysis divided carriers into four groups, with low-cost carriers such as Ryanair and Wizz Air making up the highest portion of ancillary revenue at 30.9 per cent. However, traditional airlines such as Air France, KLM, Lufthansa and United made up the biggest chunk of the 2017 increase, seeing ancillary revenue jump $6.1 billion, or 41 per cent of the total increase from 2016.

Aileen McCormack, CCO at Cartrawler, commented: “These figures indicate that ancillary profits are on a prolonged, upward trajectory and we are delighted to see more airlines looking further than traditional ancillary sources.”

Eleanor Steed
By Eleanor Steed December 1, 2017 17:27