Airline ancillary revenue projected to be $92.9 billion worldwide in 2018
Ancillary revenue as a portion of total revenue appears to have reached a ceiling of 50 percent with the top producer being Spirit at 46.6 percent.
IdeaWorksCompany, the foremost consultancy on airline ancillary revenue, and CarTrawler, the leading provider of online car rental distribution systems, project airline ancillary revenue will reach $92.9 billion worldwide in 2018. The CarTrawler Worldwide Estimate of Ancillary Revenue represents a 312% increase from the 2010 figure of $22.6 billion, which was the first annual ancillary revenue estimate.The CarTrawler global estimate forecasts 13% increase above 2017, with $64.8 billion of the total consisting of a la carte fee activity.
Earlier this year, CarTrawler and IdeaWorksCompany reported the ancillary revenue disclosed by 73 airlines for 2017. These statistics were applied to a larger list of 175 airlines to provide a truly global projection of ancillary revenue activity by the world’s airlines for 2018.
Ancillary revenue is generated by activities and services that yield cashflow for airlines beyond the simple transportation of customers from A to B. This wide range of activities includes commissions gained from hotel bookings, the sale of frequent flyer miles to partners, and the provision of a la carte services − providing more options for consumers and more profit for airlines.
Since IdeaWorksCompany began searching airline financial documents in 2007, ancillary revenue has grown every year. Ten years ago, the top ten airlines, as rated by total ancillary revenue, generated $2.1 billion. For 2017, the top ten airline total has jumped to $29.7 billion. Passenger fares may dip and climb, but ancillary revenue has grown steadily in its contribution to the industry’s bottom line.
Read Original Report