Aviation News

July 24, 2012

Airline Fee Revenue Up 66 Percent Since 2009

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Written by: Nate Strong
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United Airlines led the world in ancillary fee revenue last year. (Photo by Brian Gershey)

Despite constant complaints by air travelers, airline fees and other non-airfare charges have generated 66 percent more revenue for carriers in the past two years. Airlines around the world rang up $22.6 billion worth of such revenue in 2011, according to a report published Monday by IdeaWorksCompany, a Wisconsin-based consulting firm that helps airlines implement such fees.

The report comes as airlines are shifting their business model from including services in the full ticket price to reducing ticket price and asking passengers to choose the services that they wish to pay for individually. Some of the most common examples are paying for checked bags, food, WiFi and In-Flight Entertainment and Frequent Flier credit card fees.

The biggest collectors were United Continental at $5.17 billion, Delta at $2.54 billion and American at $2.11 billion. Southwest Airlines came in fifth place at $1.18 billion and Seattle-based Alaska Air group rounded out the top ten at $610 million. Qantas and TAM were the only two in the top ten collectors who had over 75% of their ancillary revenue come from Frequent Flier programs; the rest collected from many different areas.

As a percentage of total revenue, US Ultra Low-Cost Carrier Spirit topped the charts with 33.2% of all revenue not coming from its ticket sales. Also on this list were Allegiant at 27.0% and Ryanair at 20.5%. United Airlines was on the list in 2010, however it was edged off in the current 2011 report, despite its place at the top of total dollars collected through ancillary revenue.

Per passenger, Qantas rounds out the top at $50.82, Spirit comes in at $41.75, and Jet2.com wins third place at $41.37. If flying United Continental, you will pay an average of $36.47, $34.00 on Allegiant, and $24.61 on Alaska Air, which were 5th, 6th and 7th place, respectively.

IdeaWorksCompany identified some of the more interesting ancillary revenue ideas, such as Vueling, which for $72 (€60) will keep the middle seat in your row empty, give you early boarding and a snack and drink, and Qantas will affix a radio chip to your checked luggage for $48.

IdeaWorksCompany 70 Ancillary Revenue Top 10



About the Author

Nate Strong





 
 

 
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