Airline ancillaries earnings to reach $82B in 2017

Global airlines are expected to earn an estimated $82 billion in ancillaries this year, representing a 10.6 per cent of global revenue of $776 billion, according to a new report from IdeaWorksCompany and CarTrawler.

The CarTrawler Worldwide Estimate of Ancillary Revenue represents a 264 per cent increase from the 2010 figure of $22.6 billion, which was the first annual ancillary revenue estimate.

Earlier this year, CarTrawler and IdeaWorksCompany reported the ancillary revenue disclosed by 66 airlines for 2016. These statistics were applied to a larger list of 184 airlines to provide a truly global projection of ancillary revenue activity by the world’s airlines for 2017.

Ancillary revenue is generated by activities and services that yield revenue for airlines beyond the simple transportation of customers from A to B. This wide range of activities includes commissions gained from hotel bookings, the sale of frequent flyer miles to partners, and the provision of a la carte services − providing more options for consumers and more profit for airlines.

According to a CBC report, the 10 airlines with the highest ancillary revenues last year include (all figures in U.S. dollars):

• United Airlines ($6.2 billion)
• Delta ($5.1 billion)
• American ($4.9 billion)
• Southwest ($2.8 billion)
• Air France/KLM ($2.1 billion)
• Ryanair ($1.98 billion)
• easyJet ( $1.35 billion)
• Lufthansa Network ($1.35 billion)
• Qantas ($1.2 billion)
• Air Canada ($1.18 billion)

For traditional airlines outside of the U.S., a general category which represents the largest number of carriers worldwide, key ancillary revenue components include baggage fees - 27 per cent; onboard services (Food, Seating, Duty Free) 21 per cent; sale of FFP miles - 12 per cent; travel retail (hotel, car, insurance) 15 per cent; other a la carte services - 25 per cent.

The report is available here.