"A billion here, a billion there − pretty soon you're talking real money," American politician Everett Dirksen once said. That's precisely the case in the 2016 edition of the CarTrawler Ancillary Revenue Yearbook by IdeaWorksCompany, which reveals a total of $40.5 billion in ancillary revenue, comprising 8.7% of total sales, for 67 airlines covered by the survey.
IdeaWorksCompany researched financial filings made by 135 airlines all over the world, discovering 67 which disclosed qualifying revenue activity − four more airlines than in the 2015 Yearbook. Now available free online, the 105-page, 2016 Yearbook provides a detailed global review of a proven revenue source that delivers a whopping $6.2 billion for United Airlines, 36.4% of sales for Wizz Air, and $51.80 per passenger carried by Spirit Airlines.
The survey covers airlines that disclosed revenue in 2015 financial filings from activities such as frequent flier miles sold to partners, fees for checked bags, and commissions from car rentals. This year's edition also includes a list of the a la carte items sold through Amadeus, Sabre, and Travelport for each of the 67 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.
“As one of the first products purchased for any journey, airlines have privileged access to customer travel itineraries before anyone else does. In order to capitalise on this competitive advantage, airlines need ensure they maintain ownership of their customer relationship and utilise the valuable data they already have access to, enabling them to act like a responsive travel assistant. By offering their customers timely ancillary add-ons, they have the ability to become a one-stop shop for travel - driving brand loyalty, revenue, and profit,” said Michael Cunningham, Chief Commercial Officer, CarTrawler.
The largest numbers were registered by US major carriers such as United, Delta and American. The leader in ancillary revenue share is Spirit, at 43.4%. Other individual airline highlights found in the Yearbook:
1. Allegiant Air sold 452,272 hotel room nights and 1,204,982 car rental days to passengers which contributed to ancillary revenue from 3rd parties of $40.2 million for the year.
2. Delta enjoyed a revenue boost of $125 million from its Comfort+ seating product during the 4th quarter of 2015.
3. Qatar Airways posted stunning revenue of $528 million from the sale of duty free goods and beverages associated with its Qatar Duty Free operation.
4. Southwest’s revenue from EarlyBird Check-In is estimated to be $260 million for 2015.
5. United disclosed mileage sales of $2.999 billion for 2015 with the majority of miles sold to Chase Bank for the MileagePlus co-branded credit card.
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