Airlines collected $40.5 billion in ancillary revenue
globally in 2015, accounting for 8.7 percent of their total sales, according to
the CarTrawler Yearbook of Ancillary Revenue, published by IdeaWorksCompany.
To produce the report, CarTrawler scoured financial reports
and data from 67 airlines that report ancillary revenue. That revenue includes
fees for checked bags, amenities and special privileges, as well as frequent-flyer
program sales and commissions from sales of non-airline travel services. This
year, the report for the first time included services and amenities sold a la
carte through global distribution systems.
The three legacy U.S. carriers pulled in the most ancillary
revenue.
Source: CarTrawler Yearbook of Ancillary Revenue
Per passenger, however, low-cost carriers were the highest
earners.
Source: CarTrawler Yearbook of Ancillary Revenue
United Airlines was the only legacy U.S. carrier in the top 10 for per
passenger revenue. The top 10 also included Korean Air with $38.35 and Virgin
Atlantic with $36.08. Ancillaries for Qantas and Virgin Atlantic came largely
from their frequent-flyer programs.
The report illustrated the past decade's explosion in
ancillary revenue. On a per-passenger basis, none of the top 10 in 2008 would
have made the top 10 in 2015. In 2008, American Airlines was the top ancillary
earner with $2.2 billion. The threshold for the top 10 was less than $250
million, compared with $1 billion last year.
That trajectory is set to continue, as revenue from
ancillaries provides a "safety net" for airlines in times of high
competition and low fares, according to the report. "Some may mourn the
passing of simpler times when a long-haul ticket price included the promise of
a checked bag, seat assignment and an oftentimes inedible meal, but consumer
behavior supports the popularity of seat-only tickets that deliver a lower
price," the report said. "The potential for adding 10 percent or even
43 percent more revenue to the bottom line ensures ancillary revenue will
continue to grow."