Reported airline ancillary revenue $27.1 billion in 2012 – up 19.6% from 2011
Globally the amount of money that airlines made from ancillary services is growing faster than the amount they make from tickets. Research figures indicate that airlines made some $27 billion from ancillary services in 2012, up about 19% from 2011. Ancillary services include baggage fees, onboard food and drink, early boarding benefits, commission based activities, frequent flier activities, insurance, holiday booking, car hire and hotel booking. According to the research by Idea Works and Car Trawler, ancillaries now account for 6% of all airline revenue. Optional services such as onboard food and drinks, checked baggage and early boarding access now account for a bit over half (56%) of total airline ancillaries. The other 44% is “business opportunities linked to a passenger’s trip such as hotel and car rental bookings, and even the use of a co-branded credit card to accrue frequent flier miles or points.” Based on the total amount airlines earn from ancillary services, globally Ryanair was 6th in 2012 with € 1,064,200,000, AirFrance/KLM 7th with €924,000,000 and easyJet was 8th with €880,903,848.
Reported Airline Ancillary Revenue Surged to $27.1 Billion in 2012—Up 19.6% in One Year
research from Ideaworks and Cartrawler reported in their press release at
Once largely limited to low fare airlines, ancillary revenue is now a priority for many airlines
worldwide with new activity among global carriers in Europe. The disclosures of ancillary
revenue, which IdeaWorksCompany has analyzed since 2007, demonstrate how far the
industry’s approach to ancillary revenue has developed in the past six years.
Annual Financial Disclosures of Ancillary Revenue
Posted by 53 Airlines = $27.1 billion
Posted by 50 Airlines = $22.6 billion
Posted by 47 Airlines = $21.46 billion
Posted by 47 Airlines = $13.47 billion
Posted by 35 Airlines = $10.25 billion
Posted by 23 Airlines = $2.45 billion
Annual results are associated with a fiscal period that ended in the year indicated.
The trend for 2012 indicates increased disclosure of ancillary revenue results by airlines. In
addition to Air France/KLM and Korean Air, the list includes four new global airline additions
to the total of 53 disclosing carriers. easyJet flew against this trend by opting to not provide
ancillary revenue results for 2012. easyJet results were estimated by IdeaWorksCompany
using last year’s reported ancillary revenue with adjustments applied for a la carte initiatives described by the company for 2012. The airline simply has too large an ancillary revenue presence to be excluded from the top 10 lists.
Details and tables at
Airlines benefit from boom in ancillary sales
Airlines are continuing to make more money from the sale of ancillary services, according to research.
The world’s carriers are predicted to pull in total revenue of €42.6 billion in add-on services such as baggage fees, onboard food and drink and early boarding benefits, according to the report from consultant Idea Works Company and online car rental specialist Car Trawler.
This represents an 18 per cent increase in revenue from 2012’s figure of $36.1 billion.
According to the research, ancillaries now account for 6% of all airline revenue and total add-on sales have almost doubled in the last three years when they were around $22.6 billion in 2010.
Optional services such as onboard food and drinks, checked baggage and early boarding access now account for about 56 % or $23.7 billion of total airline ancillaries.
“This leaves a significant 44% share provided by business opportunities linked to a passenger’s trip such as hotel and car rental bookings, and even the use of a co-branded credit card to accrue frequent flier miles or points,” said Jay Sorensen, president of Idea Works Company.
The major seven US airlines are leading the way with the charging of ancillary fees with predicted total revenue of $14.3 billion in 2013 – baggage charges alone make up around 25 per cent of this add-on income.
Mike McGearty, CEO of Car Trawler, added: “Airlines are not just competing with each other for a share of the passenger market, they’re also competing for a cut of each passenger’s total travel budget.
“The airlines that will win the ancillary revenue race will be those who adopt a proactive approach to online retailing by focusing on satisfying the needs of the customer along every step on the sales journey and by ensuring that their ancillary partners do the same.”