IdeaWorksCompany reports US$40.5 billion in ancillary revenue at 67 airlines in FY2015

INTERNATIONAL. A total of US$40.5 billion in ancillary revenue, comprising 8.7% of total sales, was recorded by the 67 airlines featured in an annual IdeaWorksCompany survey.

The company researched financial filings made by 135 global airlines for the 2016 edition of the CarTrawler Ancillary Revenue Yearbook. Of these, 67 disclosed qualifying revenue activity from activities such as frequent flier miles sold to partners, fees for checked bags, and commissions from car rentals.

The report shows that United Airlines recorded US$6.2 billion in ancillary revenue in financial year 2015. The revenue source accounted for 36.4% of sales for Wizz Air, and US$51.80 per passenger carried by Spirit Airlines.

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For the first time, the 2016 edition of the report includes a list of the ‘a la carte’ items sold through Amadeus, Sabre and Travelport for each of the 67 airlines. The report noted: “For example, optional extras for baggage, seat assignments, meals and sports equipment can be booked through Travelport-equipped agencies on AirAsia, and baggage, meals and unaccompanied minors can be booked for Pegasus through the Amadeus system.”

CarTrawler Chief Commercial Officer Michael Cunningham commented: “As one of the first products purchased for any journey, airlines have privileged access to customer travel itineraries before anyone else does.

“In order to capitalise on this competitive advantage, airlines need to ensure they maintain ownership of their customer relationship and utilise the valuable data they already have access to, enabling them to act like a responsive travel assistant. By offering their customers timely ancillary add-ons, they have the ability to become a one-stop shop for travel – driving brand loyalty, revenue and profit.”

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Report highlights

ideaworks-5The largest numbers were registered by US carriers such as United, Delta and American, the report noted. The leader in ancillary revenue share was Spirit, at 43.4%. Other highlights include:

  • Qatar Airways posted revenue of US$528 million from the sale of duty free goods and beverages associated with its Qatar Duty Free operation.
  • Air Canada’s share of payouts made by the Aeroplan loyalty programme for the purchase of reward travel was US$548 million.
  • Allegiant Air sold 452,272 hotel room nights and 1,204,982 car rental days to passengers which contributed to ancillary revenue from third parties of US$40.2 million for the year.
  • Delta enjoyed a revenue boost of US$125 million from its Comfort+ seating product during the fourth quarter of 2015.
  • The UK’s Jet2.com is an ancillary revenue leader and package holiday customers represent 41.5% of all passengers flown.
  • Southwest’s revenue from EarlyBird Check-In is estimated to be US$260 million for 2015.
  • United disclosed mileage sales of US$2.999 billion for 2015 with the majority of miles sold to Chase Bank for the MileagePlus co-branded credit card.

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