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HomeRegional NewsAfrica2013 airline ancillary revenue lifts to $31.5 billion – up nearly 1200% since 2007
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2013 airline ancillary revenue lifts to $31.5 billion – up nearly 1200% since 2007

Analysis from IdeaWorksCompany, sponsored by CarTrawler, finds the top airline generated $55.61 per passenger… back in 2007 it was $14.36.

DUBLIN, IRELAND – What began as a trickle – $2.45 billion in 2007 – has grown to a flood. The annual CarTrawler survey of global airline ancillary revenue shows growth to $31.5 billion for 2013 – an increase of 1,200 percent since the first such survey in 2007.

IdeaWorksCompany researched the financial filings made by 114 airlines all over the world, 59 of which disclose ancillary revenue activity, to reveal that ancillary revenue reported by airlines reached $16 per passenger in 2013, easily surpassing global figures for profit per passenger  This latest report describes research highlights and a top 10 list of best performing carriers in three categories.

Ancillary revenue, consisting of a la carte charges, commissions on travel-oriented services, and the sale of frequent flier points, now provides the power to allow airlines to be profitable. Tony Tyler, Director General and CEO of IATA, stated at a recent conference the world’s airline industry hopes to achieve a 2.4% average net margin for 2014, which is less than $6 per passenger.

Average ancillary revenue per passenger for the 59 airlines disclosing results for 2013 was $16. The high margins associated with checked bags and loyalty points easily ensure this amount provides profits beyond the $6 threshold predicted by IATA.  Among the 59 disclosing carriers, 44 achieved ancillary revenue above $6, ranging from China Eastern at $6.43 to Jet2.com at $55.61 per passenger. The record number of airlines included in the 2013 review testifies to the importance ancillary revenue plays in the health of the global airline industry.

“Airlines the world over share a common evolutionary pattern; the shift in focus from being a purely aviation-based service to becoming multi-product travel retailers,” says Michael Cunningham, CarTrawler Chief Commercial Officer. “The shop window for travel is no longer static. It follows the customer across more devices and locations than ever before,” continues Cunningham. “The opportunity for airlines is to continue to evolve their ancillary strategy so they take full advantage of the new technology and retailing practices that will enable them to proactively service this growing customer appetite for goods and services that previously may not have been considered core to their business.”

This year’s CarTrawler Review of Ancillary Revenue Results takes a look back at the beginnings of this still-youthful method of boosting revenue. IdeaWorksCompany first tracked ancillary revenue activity seven years ago for 2007. That was before global airlines started charging extra for checked bags, early boarding, and extra leg room seating.  Total annual ancillary revenue of just $71 million placed Alitalia in the top 10 ranking for 2007. Today, the #10 slot is held by US Airways at $1.1 billion.

As a group, the 2007 top 10 carriers generated total ancillary revenue of nearly $2.1 billion. Seven years later, some of the original airlines remain on the top 10 list. But the total revenue volume for the top 10 has undergone drastic change by surging to $20.4 billion. It’s true, some have grown through mergers. But the primary reason for the bigger numbers is the fact that ancillary revenue has become so commonplace in today’s airline industry.

2013 Airline Ancillary Revenue Lifts to $31.5 Billion – Up Nearly 1200% Since 2007

News Editor - TravelDailyNews Media Network | + Posts

Tatiana is the news coordinator for TravelDailyNews Media Network (traveldailynews.gr, traveldailynews.com and traveldailynews.asia). Her role includes monitoring the hundreds of news sources of TravelDailyNews Media Network and skimming the most important according to our strategy.

She holds a Bachelor's degree in Communication & Mass Media from Panteion University of Political & Social Studies of Athens and she has been editor and editor-in-chief in various economic magazines and newspapers.

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