Photo courtesy of Thinkstock
Checked bags, onboard food, the ability to pick your seat, seat upgrades... As long as revenue growth continues like this, expect the airline industry to not only maintain their ancillary fee programs but to also find new and innovative ways to charge passengers even more.
Airlines made a whopping $31.5 billion globally in ancillary fees last year according to a new report, up 11 percent from the $28.1 billion they earned in 2012 and up more than 1,200 percent from 2007, generally considered the year ancillary fees first began.
"What began as a trickle has grown to a flood," the report stated.
To be fair, the totals for ancillary fees do include such things as affinity credit cards. But the worst part for fliers?
"We have a fair amount of room to grow yet," said Jay Sorensen, the president of IdeaWorksCompany, a Wisconsin-based airline consultancy which helps airlines find and implement new revenue streams.
IdeaWorksCompany and CarTrawler, a rental car services company, commissioned the survey, which includes data from 59 airlines. Leading the way is United Airlines, which brought in $5.7 billion in ancillary fees last year, more than double the No. 2 airline, Delta, which earned $2.53 million. American Airlines came in third with $2.1 million.
But nowhere are ancillary fees more important as a revenue stream than at Spirit Airlines, famous - or infamous, depending on how you look at it - for its low fares but numerous add-on fees. Ancillary fees accounted for 38.4 percent of Spirit's total revenue last year, according to the report.
Spirit made $51.22 per passenger on ancillary fees.
For the latest travel news, updates and deals, subscribe to the daily TravelPulse newsletter.
Topics From This Article to Explore
