The 'Amadeus Worldwide Estimate of Ancillary Revenue for 2011' reveals ancillary revenue increased to more then US$32 billion worldwide, lifting the airline industry from losses and provides an effective hedge against runaway fuel bills.

Amadeus and IdeaWorks, which earlier this year reported on the ancillary revenue disclosed by 47 airlines in 2010, applied these statistics to a larger list of more than 200 airlines to provide a truly global projection of activity for 2011.



Holger Taubmann, Amadeus VP distribution, Amadeus (pictured below right)  said the rapid growth of ancillary revenues would lead to an increasing interest from full service carriers around the world, such as.

KLM and Iberia, joining the ranks of carriers implementing the Amadeus Ancillary Services solution for travel agencies.

"The model is now focusing on services which increase the scope of the product offering and reinforce the brand rather than unbundle the ticket price," he added.

The IdeaWorks analysis reveals four natural groupings or categories (listed below), which are based upon a carrier's ability to generate ancillary revenue.

Ancillary revenue champs: These carriers generate the highest activity as a percentage of operating revenue. The average achieved by this group was 19.8%, which is slightly up from 19.4% for 2010. Examples include AirAsia, Aer Lingus, easyJet, Ryanair, and Spirit Airlines.

Major US airlines:  US-based majors generate strong ancillary revenue through a combination of frequent flier revenue and baggage fees. The average for this group was 11.9%, which is a sizable increase above the 2010 rate of 7.2%.  Examples include Alaska, American, and United.

Low cost carriers:  LCCs throughout the world typically rely upon a mix of à la carte fees to generate good levels of ancillary revenue. The average in this group was 6.5% and is above last year's 5.4%.  Examples include AirTran, Blue1, IndiGo, Jazeera Airways, Pegasus, and Spring Airlines.

Traditional airlines:  This category represents a catch-all for the largest number of carriers.  Ancillary revenue activity may consist of fees associated with excess or heavy bags and limited partner activity for a frequent flier program. The average here remained at 2.9%.  Examples include Air China, Emirates, Finnair, LAN, Qatar Airways, and Singapore Airlines.

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