Survey: Airline Ancillary Revenue Jumps Again
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United Airlines collected nearly $6 billion in ancillary fees last year, the most among any global airline according to research done by Wisconsin-based IdeaWorksCompany.
IdeaWorksCompany researched financial filings made by 130 airlines all over the world, 63 of which disclosed qualifying revenue activity. For the eighth consecutive year, airlines tracked by the company reported substantial increases in revenue gained from retail activities and the sale of a la carte services and frequent flier miles.
For 2014, that was a total of $24.9 billion, up from $20.3 billion the previous year.
“Ancillary revenue is an increasingly important indicator of commercial success, and a major contributor to the bottom line of airlines across the globe,” Michael Cunningham, chief commercial officer at CarTrawler, said in a statement. CarTrawler commissioned the research along with IdeaWorksCompany. “The secret to unlocking this revenue stream can be found in the data that customers generate with every transaction. It is no longer just the preserve of low cost carriers – it is something from which all airlines are benefiting. The question is not who is doing it, it’s how well it is being done.”
Ancillary revenue per passenger among the 63 airlines is $17.49, which is 8.5 percent more than the 2013 result. Activity among low cost carriers (LCCs) jumped more than $2.9 billion, or 32.8 percent. And ancillary revenue among U.S. major airlines increased more than $2.6 billion, or 18.7 percent.
United Airlines collected more ancillary fees than anybody at $5.8 billion last year. That meant 15.1 percent of its revenue came from baggage, assigned seating, beverage and other fees.
United’s $5.8 billion came in ahead of the $4.6 billion raked in by the merged American/US Airways and the $3.2 billion collected by Delta.
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