The $22.6 billion figure for 2011 only covers ancillary revenue reported in financial filings by about 100 carriers. Amadeus estimates the actual global figure to be higher, at $32.5 billion — nearly triple the amount earned in 2009. The project examined the disclosed financial performance of 108 airlines and the estimate includes revenue from unbundled services, such as baggage fees and food sold onboard aircraft, to new incremental income, such as commissions from the sale of accommodation and travel insurance, plus partner revenue generated by frequent flier programs.
The airline that collected the most ancillary revenue in dollar totals was the country’s largest airline, United Continental, with $5,047,477,000 last year. It was followed by next largest airline Delta, which raked in $2,473,469,000.
The carrier the earned the most ancillary revenue as a percentage of total revenue was Spirit, with a third of its revenue coming from revenue outside of the base fare. Next up was UK carrier Jet2.com and the U.S.’s Allegiant, tied at 27%.
Qantas was the winner if you measure ancillary revenue on a per passenger average, netting $50 a flier last year. Spirit and Jet2.com tied for second-place at $40 per passenger on average.
Airlines are increasingly innovative in their approach to ancillary revenue, with examples like this:
– Qantas sells its Q Bag Tag for AUD 49.95 (€39) as a permanent baggage tag with wireless RFID technology that links to a traveler’s booking and permits easy self-checking of bags on flights within Australia.
– AirAsia rolled out a Red Carpet Service offering elite-style perks from a low fare airline. Starting at MYR 80 (€21), passengers can enjoy fast track security, lounge access, early boarding, and a ride to the plane in an electric cart.
– KLM allows passengers to pre-order (at the time of booking) upgraded meals on intercontinental flights from Amsterdam.
Nevertheless, only a few of them are already matching the hanger of connectivity of their clients with the new technologies. The best example is Iberia, the spanish legacy carrier part of IAG Group, which has partnered with ConnectedtoGo to provide to their clients, frictionless, WiFi Everywhere ®in Spain (Router MiFi which generates 200MB a day for 5 devices) and the rental of ultraportable 7¨Tablets ConnectedtoGo, configured as «Travel Companions» with proprietary apps likeWork&Play® and LocalGuide®. (more info at www.connectedtogo.com)
Amadeus and other GDSes like Travelport and Sabre are working with airlines to make ancillary services easily booked by travel agents through GDS distribution becouse as says Holger Taubmann, senior vice-president distribution of Amadeus IT Group, «Airlines have a high base of ancillary offers on their websites but only limited implementation in the hugely important travel agency channel. The fact that 50% of airline sales are made in-directly means a huge portion of ancillary revenue isn’t being collected today that could be with a multichannel approach.»
