The hype at the moment over ancillary revenue is well founded; check the news-wires and everyone is talking about Ryanair’s profit margin of 24% for the first half of 2007. Their forecasted net profits for 2007 have now been raised to 17.5%. Miraculously, an extra £326m of profit has been generated in unfavourable economical conditions – airport charges have soared 50%, fuel is up 19% and even Ryanair’s famously low staff costs have risen.

 

Compensating for all of this is their 54% rise in ancillary revenue to £175.2m.

Michael O’Leary states that increasing ancillary revenue to their target of 20% is Ryanair’s key future strategy - the conclusion is clear: ancillary revenue works. Ryanair does not comment on the profit-margins of ancillaries, but with their strategy for the future it is clear that ancillary revenue is responsible for a large chunk of their
profits.

Ancillary revenue has sent shockwaves throughout the industry, it’s now not just the airlines looking at how they can maximise revenues. Hotels, car hire, cruises, tour operators and OTAs are all eagerly looking at ancillaries to recapture high-margins in an extremely competitive online travel climate.

Santina Doherty, Head of Ancillary Revenue for Ryanair will speak at EyeforTravel’s Ancillary Revenue in Travel 2008 conference which is taking place on 20-21st February at the Clontarf Castle Hotel, Dublin. The event brings together Ryanair, Delta, Flybe, American, Continental, Lot, Norwegian and many more.

TravelDailyNews International is the Media Partner of the event.