Sales from non-ticket sources in 2019 jump 20% for the top 10 airlines, while 2020 results show a la carte rates are holding.
SHOREWOOD, WINSCONSIN – The 2020 edition of the CarTrawler Yearbook of Ancillary Revenue by IdeaWorksCompany is the largest ever, with 81 airlines disclosing results. By every measure, 2019 was a year of overwhelmingly good ancillary revenue for airlines – which provided resilience for the challenges of 2020. The table below shows the top 10 airlines ranked by sales from non-ticket sources. Emirates’ increase is partially explained by a giant first-time disclosure; whereas prior years only revealed excess baggage. Clearly, Emirates has joined other major airlines by embracing ancillary revenue as an essential activity.
This year’s 81 airlines represent a very robust 68.6% of IATA’s worldwide airline industry traffic estimate for 2019. The list is a collection of the world’s best performing ancillary revenue airlines. Over all, ancillary revenue as a percentage of total airline revenue was 12.1% for 2019, which is a significant increase above the 10.7% for 2018.
“Covid-19 has had an enormous impact on the travel industry but there is also cause for optimism,” said Aileen McCormack, Chief Commercial Officer at CarTrawler. “Thankfully, a significant number of the world’s largest airlines have realised the value of investing in a superior ancillary revenue platform, which is apparent by the outstanding results we see from last year and which has cushioned the financial blow of Covid. The travel industry has work to do to regain the losses caused by the pandemic, but we have strong foundations on which we can recover and thrive. By working together we can drive recovery into the next decade.”
This yearbook includes first-ever current year projections. The pandemic requires an assessment of how this global event is affecting airlines and ancillary revenue. Airline activity has significantly decreased during 2020. IATA’s annual mid-year projection of current year activity indicates an approximate 50% drop in airline revenue and passenger traffic. Each individual airline listing includes an ancillary revenue projection for 2020. The projection is based upon 2019 ancillary revenue as a percentage of total revenue, with adjustments made to reflect the airline revenue and passenger traffic losses caused by the pandemic. The table below displays the results of this process for the top ten airlines.
The 2020 ancillary revenue projections are based upon the individual airline rates calculated for 2019. Research was conducted to assess how 2020 is comparing to last year. Second quarter 2020 financial disclosures collected from 17 airlines revealed the ancillary revenue average among these carriers was 21.7% for the first quarter of 2019 and 22.1% for 2020. Half the carriers showed increased ancillary revenue for 2020, while the other half showed decreases. The yearbook also includes tables which rank the 81 airlines by ancillary revenue as a percentage of total airline revenue and dollars per passenger. Please refer to the end of this press release for a graphic displaying the top 20 results on a percentage basis.
Feedback from ancillary revenue executives all over the world indicates consumer buying behavior related to a la carte services is comparable to 2019. Notably, seat location has become an important feature, as passengers want to be in the front of the cabin for a quicker and smoother exit upon arrival. Extra leg room, which provides more personal space, is also popular with consumers.
The world’s airline industry is facing an epic struggle, which has also created a crisis for employees. The exceptional ancillary revenue of 2019 added a layer of cash to airline balance sheets for the long, cold revenue winter of 2020. Just as important, the higher rates of ancillary revenue have remained durable during the pandemic. This delivers reliable cashflow while airlines experiment with very low fares to tempt consumers back into the air.
Prior reports issued by IdeaWorksCompany this year have used the following mantra to remind us of an enduring truth amid the challenges of the pandemic, “Travel is an essential element of being human. We work in a business that is a very meaningful part of modern life. People love to travel and business people need to travel. Travel will return again.” These words remain true and the resilience of ancillary revenue testifies to this.
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.
