Ideaworkscompany and Cartrawler project that airline ancillary revenue will reach US$82.2 billion worldwide in 2017, an increase of 22 per cent above 2016.
The Cartrawler Worldwide Estimate of Ancillary Revenue report shows that ancillary revenue has increased 264 per cent since it started recording figures in 2010. Based on last year’s total revenue disclosed by 66 airlines, the group said it has applied the same statistics to 184 carriers to provide a more complete global projection 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. The research found that the 2017 estimate is 10.6 per cent of total global revenue of $776 billion.
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.”
Download the full report here.