Airlines Earn Nearly $30 Billion in Ancillary Revenue

Over the last few years many airlines have tweaked their business models. While they obviously still want to generate revenue from selling tickets for flights many have turned to ancillary sources of revenue to boost their bottom line.

But how much are they earning?

According to figures reported by CarTrawler airlines have earned close to $30 billion from ancillaries – and that’s just based on disclosed data, the actual amount could be higher.

The report is based on analysis of figures from 143 airlines. Of those examined 72 revealed numbers related to their ancillary revenue. Since 2007 the overall revenue from ancillary products and services has grown 14 fold with many of airlines reporting a very proportion of their overall revenue being due to ancillaries:

  • Wizz Air 41.6% (Europe & Russia)
  • Spirit 46.6% (Americas)
  • Hong Kong Express 25% (Asia & South Pacific

The revenue per passenger varies, but the average per passenger when reported can be quite high:

  • Spirit $50.97 (Americas)
  • WOW air $48.87 (Europe & Russia),
  • AirAsia X $33.12 (Asia & South Pacific)

“Ancillary revenue keeps on growing and has become a mandatory component for the revenue mix of all airlines. Investors were first delighted by it, and now have come to expect it. That expectation also occurs with consumers who appreciate the flexibility and array of services delivered by airlines. The best producing airlines have become expert retailers of travel-related services, which includes the ability to book hotels, attractions, and of course ground transport,” said Michael Cunningham, Senior Vice President of Distribution at CarTrawler.

CarTrawler and IdeaWorks Company will be issuing a detailed report on airline ancillary revenue later this year.

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