By every measure, ancillary revenue continues to grow, for the eighth consecutive year, tracked airlines reported substantial increases in revenue gained from retail activities and the sale of a la carte services and frequent flier miles.
- Ancillary revenue per passenger among the 63 airlines is $17.49, which is 8.5% more than the 2013 result.
- Activity among low cost carriers (LCCs) jumped more than $2.9 billion, or 32.8%.
- Ancillary revenue among US major airlines increased more than $2.6 billion, or 18.7%.
IdeaWorksCompany researched financial filings made by 130 airlines all over the world, 63 of which disclosed qualifying revenue activity, to reveal that ancillary revenue1 reported by these airlines increased $6.6 billion for 2014.
This article describes highlights from this research and includes a top 10 list of best-performing carriers in three categories.
Airlines all over the world benefit from ancillary revenue, but the degree to which airlines disclose financial results does vary. Financial statements for US-based airlines universally provide a high level summary of ancillary revenue results.
Publicly-held LCCs almost always make direct reference to ancillary revenue achievements due to investor interest in this topic.
From time to time, global network airlines in Europe refer to the pursuit of ancillary revenue to provide evidence they can compete with LCCs such as easyJet and Ryanair.
As displayed in the adjoining graph, these factors favour the Americas and Europe as leading areas for ancillary revenue activity and financial disclosure.
“Ancillary revenue is an increasingly important indicator of commercial success, and a major contributor to the bottom line of airlines across the globe,” says Michael Cunningham, Chief Commercial Officer at CarTrawler.
“The secret to unlocking this revenue stream can be found in the data that customers generate with every transaction. It is no longer just the preserve of low cost carriers " it is something from which all airlines are benefiting. The question is not who is doing it, it’s how well it is being done.”
Full story
Note:
1 The figures in this release relate to the revenue earned by the 63 airlines which disclosed through financial filings some type of ancillary revenue activity in 2014; including a la carte, or unbundled, services, commission based services " such as hotel or car rental bookings " and other ancillary services revenue from co-branded credit cards, loyalty programs and other activities.
