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Ancillary revenue per passenger for 2013 was $16, up nearly 129% from 2007

The first IdeaWorksCompany ancillary revenue report for 2007 identified $2.45 billion from just 23 airlines for an average of $6.99 per passenger. Now, six years later, every aspect of ancillary revenue has dramatically increased, to include a 1,200 percent increase of ancillary revenue disclosed by airlines globally.

DUBLIN, IRELAND – Ancillary revenue now provides the power for airlines to be profitable. The global airline industry hopes to achieve an average net margin of 2.4% for 2014, which is less than $6 per passenger. The first IdeaWorksCompany ancillary revenue report for 2007 identified $2.45 billion from just 23 airlines for an average of $6.99 per passenger. Now, six years later, every aspect of ancillary revenue has dramatically increased, to include a 1,200 percent increase of ancillary revenue disclosed by airlines globally. This has allowed the world’s airline industry to tilt into the column of profitability while keeping fares modest as consumers recover from recession.

The new 2014 CarTrawler Yearbook of Ancillary Revenue by IdeaWorksCompany, now available free online, provides the most detailed global assessment of a bottom-line-booster that can represent more than 38 percent of a carrier’s revenue. The full 85-page report examines 59 airlines that disclosed revenue in financial filings during 2013 from activities such as frequent flier miles sold to partners, fees for checked bags, and commissions from car rentals.

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 ?ier miles to partners” or “revenue from onboard cafe sales.”  Other airlines provide robust details and seem very proud of their ancillary revenue accomplishments.

The following is a sampling of the ancillary revenue details found in the Yearbook:

  • Air Greenland generated $8.1 million from the operation of its wholly-owned Hotel Arctic, the world’s “most northerly 4-star hotel.”
  • Allegiant has an exclusive agreement with Enterprise Holdings for rental cars packaged with air travel.  The relationship generated 844,858 car rental days during 2013.
  • Hawaiian realized revenue of $6.6 million from the sale of preferred seating for a 12-month period during 2013.
  • Norwegian donated 1 krone from the sale of each water bottle sold onboard to UNICEF. The carrier sold 1.3 million bottles during 2013 and donated $212,000 to UNICEF.
  • Southwest realized $195 million during 2013 from its EarlyBird check-in feature which provides earlier boarding and better access to overhead carry-on space.

 

CarTrawler Ancillary Revenue Yearbook 2014

Co-Founder & Chief Editor - TravelDailyNews Media Network | Website | + Posts

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.

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