“Wealth is largely the result of habit,” German-American businessman John Jacob Astor once said. With ancillary revenue of $44.6 billion, it’s clear the airlines included in the 2017 edition of the ‘CarTrawler Ancillary Revenue Yearbook’ by IdeaWorksCompany have developed the habit of making money.
IdeaWorksCompany researched financial filings made by 138 airlines all over the world, discovering 66 which disclosed qualifying revenue activity. Airlines joining the list for 2017 include Azul, Eurowings, Jejuair, Jet Airways, South African, and Vietjet. Now available free online, the 110-page, 2017 Yearbook provides a detailed global review of a proven revenue source that delivers a whopping $6.2 billion for United Airlines, 39.4% of sales for Wizz Air, and $49.89 per passenger carried by Spirit Airlines. Overall, the $44.6 billion represents 9.7% of total sales for the 66 airlines covered by the survey, which is up from last year’s 8.7%.
The survey covers airlines that disclosed revenue in 2016 financial filings from activities such as frequent flyer miles sold to partners, fees for checked bags, and commissions from car rentals. This year’s edition includes a list of the a la carte items sold through Amadeus, Sabre, and Travelport for each of the 66 airlines. For example, optional extras for baggage, seat assignments, meals and sports equipment can be booked through Travelport-equipped agencies on AirAsia, and baggage, meals and unaccompanied minors can be booked for Pegasus through the Amadeus system.
Airlines are increasingly more revealing about their approach to ancillary revenue. During the course of its global review of ancillary revenue activities, IdeaWorksCompany uncovered the following examples for 2016:
- Air France/KLM sent members of its Flying Blue frequent flyer program more than 250 million emails during 2016, which is an average of 9.3 emails per member.
- AirAsia X broke with LCC tradition by opening an airport lounge. The Premium Red Lounge at Kuala Lumpur provides 24-hour service, a buffet, and even showers.
- Alaska Airlines issues credit cards to 30% of its frequent flyer members and its Mileage Plan program represents a healthy 12% of the group’s total revenues.
- Delta increased its Comfort+ load factor by 15 points to 46%. This premium economy product was introduced in May 2016 and was expected to generate up-sell revenue of $300 million during the second half of the year.
- EasyJet features the “Earlier Flight” option on its mobile application, which allows travelers to switch flights on short notice on the day of travel for the modest cost of £15.
- Qantas estimates its co-branded credit card activity represents an amazing 35% of all credit card spending in Australia.
- South African Airways had 31.4% of passengers active in the Voyageur frequent flyer program, with these members representing nearly 30% of airline revenue.
- Wizz Air sold 10,548,710 chocolate bars (a take rate of about 8%) and 8.9 million cups of coffee (a take rate of about 7%) to its customers during 2016.
The 2017 CarTrawler Yearbook of Ancillary Revenue by IdeaWorksCompany was released today as a free-of-charge report sponsored by CarTrawler.
