Ancillary airline revenue grows by 66% in two years

Ancillary airline revenue grew by 66% over two years to €18.23 billion in 2011.

The growth from €10.95 billion in 2009 is based on a study of financial filings made by 108 airlines, 50 of which disclose ancillary revenue activity.

Once largely limited to low fare airlines, ancillary revenue is now a priority for many carriers worldwide with United-Continental topping the list of the top ten followed by Delta, American, Qantas and Southwest.

EasyJet passed Ryanair for the first time to come in sixth place followed by the Irish budget carrier, US Airways, Tam and Alaska Air.

The 10 airlines delivered revenue in excess of €13.7 billion, or 75% of the total amount disclosed by airlines for 2011.

The findings come from an Amadeus review of ancillary revenue results for last year conducted with consultancy IdeaWorksCompany.

Amadeus distribution senior vice president Holger Taubmann said: “We’ve seen the industry move swiftly to grasp some clear opportunities for providing ancillary services, such as baggage fees, extra legroom and on-board catering.

“The next wave of innovation in ancillary services will come from those airlines which develop new products that support their brand positioning and deliver value to the traveller by meeting their individual needs and preferences.

“A multi-channel approach to the distribution of ancillary services is key to realising this.”

He added that Amadeus was working with 46 airlines that have signed up for Amadeus Ancillary Services Solution to deliver an offer that will tailor the travel experience and provide new revenue sources.

IdeaWorksCompany president Jay Sorensen added: “Our first report into ancillary revenue was issued in 2007, when only 23 airlines worldwide disclosed ancillary revenue activity in financial filings, and the result was a modest €1.72 billion ($2.45 billion).

“Four years later, 50 airlines today disclose ancillary revenue activity of €18.23 billion ($22.6 billion). It’s clear that airlines recognise the importance of ancillary revenue and are developing increasingly innovative ways to generate this.”

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