The 2015 CarTrawler Yearbook of Ancillary Revenue by IdeaWorksCompany provides the most detailed global assessment of a bottom-line-booster that can represent 38.7% of a carrier’s revenue, as it does for Spirit Airlines in the US, or $56.28 per passenger for Jet2.com in the UK, and $5.86 billion for global behemoth United Airlines.
SHOREWOOD, WINSCONSIN – IdeaWorksCompany researched financial filings made by 130 airlines all over the world, 63 of which disclosed qualifying revenue activity, to reveal that ancillary revenue reported by these airlines was $38.1 billion for 2014. That represents a more than $35.6 billion increase since 2007, and the 2014 number is up 20.9% over $31.5 billion from 2013.
The 2015 CarTrawler Yearbook of Ancillary Revenue by IdeaWorksCompany provides the most detailed global assessment of a bottom-line-booster that can represent 38.7% of a carrier’s revenue, as it does for Spirit Airlines in the US, or $56.28 per passenger for Jet2.com in the UK, and $5.86 billion for global behemoth United Airlines.
The full 98-page report examines 63 airlines that disclosed revenue in financial filings during 2014 from sources such as frequent flier miles sold to partners, fees for checked bags, and commissions from car rentals. The complete alphabetical list of carriers is provided on page 3 below in a carrier-by-carrier table, followed by a graph of ancillary revenue expressed as a percent of total revenue.
The Yearbook’s individual airline listings clarify the type of ancillary revenue activity for each carrier. Some airlines are vague in their descriptions and merely provide an “ancillary revenue” line on the income statement without further details. Some of the carriers don’t specifically list ancillary revenue, but describe qualifying activities such as “revenue from the sale of frequent flier miles to partners” or “revenue from onboard cafe sales.” Other airlines, such as AirAsia, Hawaiian, and Spirit, provide robust details and seem very proud of their ancillary revenue accomplishments.
New for 2015 is a list of the a la carte items sold through Amadeus, Sabre, and Travelport for each of the 63 disclosing airlines. For example, optional extras for baggage, seat assignments and meals can be booked through Sabre-equipped agencies on Airberlin, and seat assignments and baggage can be booked for Qantas through the Amadeus system.
The information for these entries was collected from GDS websites or materials provided by the GDS; IdeaWorksCompany is not responsible for the accuracy or veracity of the claims made by these vendors.
The following examples illustrate the ancillary revenue details found in the Yearbook:
- Aeroflot sales of frequent flier miles to partners jumped again for 2014 to $223 million for its 4.2 million members, which is more than $53 per member.
- AirAsia began offering inflight chat service through the aircraft Wifi network at a price of MYR 8 (less than $3) to support WeChat, WhatsApp and LINE chat applications.
- Alaska is introducing Preferred Seating (extra 7 to 9 inches of legroom, free drink, and priority boarding) in 2015 which is expected to initially provide $15 million annually.
- Allegiant earns a 30.1% gross margin on the sale of services provided by third parties (hotel rooms, rental cars, hotel shuttles, attractions and show tickets).
- American and US Airways issued approximately 287.1 billion frequent flier miles during 2014, of which 61% were sold to program participants.
- JetBlue introduced bundled fares (with the lowest type not including a checked bag) during 2015, which is expected to provide annual income of $200 million.
- Lufthansa’s Miles & More frequent flier program contributed income in excess of $90 million which more than doubles the 2013 amount.
- Ryanair believes 25% of its passengers are business travelers, and up to 9,000 a day are buying its Business Plus fare bundle.
- Spirit generated revenue of $76,270,000 from assigned seating during 2014, representing an average of $5.33 per passenger.
- Tigerair offers Tigerconnect for a fee of SGD 22 (about $18) which provides a city center shuttle and sightseeing tour for travelers with 8+ hour connections at Singapore.
- Virgin Australia completed the sale of a 35% share of its Velocity Frequent Flyer program during October 2014 for AUD 336 million (approximately $295 million).
- Volaris, a low fare airline in Mexico, generated more than $ 3.5 million from the sale of memberships in its V-Club, which provides access to members-only low fare deals.
- Vueling’s ancillary revenue per passenger was $15.45 during 2014. But the average for bookings made exclusively via direct channels (such as the website) leaps to $29.19.
2015 Ancillary Revenue Yearbook
Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales.
She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.
