Airlines could generate $12bn revenue in ancillary revenue by adopting the practices of low-cost carriers such as Ryanair and easyJet.
Carriers globally are missing out on an average of $6 per passenger by not offering services above and beyond ticket sales. The study conducted by ancillary revenue programmes speciaist, Collinson Latitude, was based on airline industry figures from IATA which showed that there was a total market of 2 billion passengers worldwide in 2008.
The ancillary revenue model has become an important financial component for the airline industry with leading budget carriers Ryanair and easyJet documenting that approximately an additional $12 per passenger was made through ancillary revenues in 2007.
The report argues that ancillary revenue programmes also deliver further benefits for airlines by providing opportunities to implement loyalty building initiatives that deliver detailed customer insight, further strengthening the brand’s long-term relationship with the customer.