Airlines took €18.23 in ancillary revenue in 2011, reveals Amadeus

Airlines took €18.23 in ancillary revenue in 2011, reveals Amadeus

IdeaWorksCompany and Amadeus have announced the results of the Amadeus Review of Ancillary Revenue Results for 2011.

IdeaWorksCompany researched the financial filings made by 108 airlines all over the world, 50 of which disclose ancillary revenue activity, to identify that the ancillary revenue reported by airlines grew to €18.23 billion in 2011. 

This represents ancillary revenue growth of 66 per cent in two years from the 2009 result of €10.95 billion.

Once largely limited to low fare airlines, ancillary revenue is now a priority for many airlines worldwide, and the Review announced shows how far the industry’s approach to ancillary revenue has developed in recent years.

“We’ve seen the industry move swiftly to grasp some clear opportunities for providing ancillary services, such as baggage fees, extra legroom and on-board catering.

“The next wave of innovation in ancillary services will come from those airlines which develop new products that support their brand positioning and deliver value to the traveller by meeting their individual needs and preferences,” said Holger Taubmann, senior vice president, distribution at Amadeus.

“A multi-channel approach to the distribution of ancillary services is key to realising this. Amadeus is working with the 46 airlines that have signed up for Amadeus Ancillary Services Solution to deliver an offer that will tailor the travel experience and provide new revenue sources, now and in the future.”

Big companies generate big results, and the current analysis confirms the largest ancillary revenue results are delivered by large airlines.

The top ten ‘Total Ancillary Revenue’ list is dominated by major brands in the global network and low fare categories. 

American and Delta attain their status through a blend of activities which notably features checked baggage and the sale of frequent flier miles to bank partners. 

Qantas and TAM are unique because frequent flier program revenue is the primary reason for placement in the top ten. 

As a group, these ten airlines delivered revenue in excess of €13.7billion, or 75 percent of the total amount disclosed by airlines for 2011. 

Airlines generally moved up the chart for 2011 in terms of overall ancillary revenue produced.

easyJet passed Ryanair for the first time.

Delta’s ancillary revenue results decreased during 2011 for a combination of reasons.

The airline refined how it discloses ancillary revenue results, now excluding revenue from some aviation-related businesses.

IdeaWorksCompany also believes the large advance payment received from American Express during 2010 boosted the cash amount registered that year.

Southwest is a new member of the top ten list for total ancillary revenue, although the carrier has steadily and gradually moved up the rankings since it first appeared in the 2009 list.

While Southwest has chosen not to generate revenue from checked baggage fees, it has embraced the sale of convenience-adding services.