The latest airline ancillary revenue tome is out and yes, you guessed it, airlines continue to see significant gains with some reaping more than a third of total revenue from these additional services.
Tnooz touched on findings from the summary of the IdeaWorksCompany survey back in July with some interesting points around how the definition of ancillary is changing to allow for developments such as fare bundles.
Some of the detail from the full report, sponsored by CarTrawler, is worth a look just to see how much the top carriers are earning per passenger as well as expressed as a percentage of revenue.
For example, while the top five earners are the likes of United Airlines, American Airlines, Delta, Air France-KLM and Ryanair - it is only the Ireland-based carrier that makes the top five when it comes to ancillary revenue as a percentage of the total.
And, it is the low-cost carriers that dominate when it comes to ancillary sales as a percentage of total revenue:
- Spirit 38.7%
- Wizz 33.7%
- Allegiant 32.4%
- Jet2.com 28.%
- Ryanair 24.6%
On a revenue per passenger basis some of the same names appear in the top five as well as a few new ones:
- Jet2 $56.28
- Spirit $52.35
- Qantas $50.16
- Allegiant $45.16
- Air Asia X $43.22
It should be noted that Qantas is said to glean much of its ancillary revenue from its frequent flyer program.
For the first time, the IdeaWorks report lists the ancillary services available for booking via the global distribution systems - Amadeus, Sabre and Travelport.
The companies have been shaping up their merchandising technology in the past couple of years and the study says "progress is rapidly occurring" in terms of the availability of a la carte services via the distribution giants.
Further highlights of the report include:
- The average ancillary revenue per passenger is $17.49, an increase of 8.5% over 2013 figures
- Ancillary revenue for low cost carriers has increased almost a third OR $2.9 billion
- Revenue for ancillary services for US carriers has increased almost 19% OR $2.6 billion
And finally, a few 'did you knows?':
- AirAsia now has an inflight chat service over its wifi to support the growing use of WeChat, WhatsApp etc for less than $3
- Tigerair offers a Tigerconnect service which is a city-centre shuttle and sightseeing tour for about $18 and available to travellers waiting for a flight connection of at least eight hours
- Vueling's average ancillary per passenger is $15.45 but the figure almost doubles for bookings made via its direct channels such as its website
- Air Astana has just announced a MyUpgrade service enabling passengers to bid online for an upgrade.
The full report can be downloaded
here.
Don't forget Tnooz is bringing THack to Hamburg from Friday 16 October to Sunday 18 October when developers will be able to get their hands on IATA's APIs.
NB: Airline seats image via Shutterstock.