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Carriers eye paid add-on services to lift revenue

11/30/2018| 9:45:29 AM|

In the past decade, the ancillary revenues of the top 10 carriers with the biggest portion of such revenues surged from USD 2.1 billion in 2007 to USD 29.7 billion in 2017, at an annual compound growth rate of 30%.

Cabin upgrades, pre-booked in-flight meals, paid priority security checks and boarding, and other additional services will soon become more commonplace for most passengers in China, according to industry experts.

In China, smaller and budget airlines, such as Tianjin Airlines, Spring Airlines and Lucky Air, have been actively trying to operate more ancillary services, such as the prebooking of paid food and paid luggage check-in services. State-owned carriers, however, have been more cautious, and they only provide options like prepaid seat selection on international flights.

In the past decade, the ancillary revenues of the top 10 carriers with the biggest portion of such revenues surged from USD 2.1 billion in 2007 to USD 29.7 billion in 2017, at an annual compound growth rate of 30%.

United Airlines, Delta Air Lines, American Airlines, Air France-KLM Group, Lufthansa Group, and Air Canada, respectively, make up the top six, according to IdeaWorksCompany, a US airline consulting firm.

The ancillary revenues of State-owned airlines in China, including Air China, China Southern Airlines and China Eastern Airlines, make up 4% of their total revenues, lower than the average 10% for global carriers, according to consultancy firm Roland Berger.

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TAGS: ancillary revenue | add-on service
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