Airline ancillary revenues grew to $17.49 per passenger in
2014, up 8.5% from 2013, according to a study by airline consulting firm
IdeaWorks.
Meanwhile, ancillary revenue earned by the five largest U.S
carriers went up by $2.6 billion, or 18.7% year over year.
“By every measure, ancillary revenue continues to grow,”
reads the CarTrawler Yearbook of Ancillary Revenue study, which has been
published annually since 2007. “For the eighth consecutive year, airlines
tracked by IdeaWorks reported substantial increases in revenue gained from
retail activities and the sale of a la carte services and frequent flier
miles.”
In compiling the report, IdeaWorks researched financial
filings from 130 airlines worldwide. The report's data is based on the 63
airlines that disclosed ancillary sales. In addition to offerings such as meals
and premium seats, the study defines ancillaries to include bundled fares, the
sale of frequent flyer miles, revenue earned from in-flight advertising and the
commissions that airlines earn on sales of car rentals, travel insurance and
hotel rooms.
All told, the 63 airlines sold $38.1 billion in ancillary
products in 2014, up from $31.5 billion in 2013 (59 airlines disclosed
ancillary sales for that study.)
United, with $5.86 billion in ancillary sales, led all
airlines in 2014, followed by American with $4.65 billion and Delta with $3.21
billion. Among U.S. carriers, Southwest and Alaska also made the top 10, coming
in at sixth and tenth respectively.
Spirit, which aggressively markets a variety of a la carte
offerings, leads the way in the portion of its revenue that comes from
ancillary sales at 38.7%. Overall revenue leader United came in 15th on that
list, with 15.1% of its $38.9 billion in 2014 revenue coming from ancillary
offerings, according to the study.
This year marked the first time that IdeaWorks looked at the
impact GDS providers are having on the sale of a la carte services.
In an interview, study author Jay Sorensen said he was
surprised to learn that European discount carrier Ryanair, which as recently as
early 2014 wasn't selling tickets through the GDS at all, now has a robust list
of ancillary offerings available through Amadeus, Sabre and Travelport.
On the other hand, British Airways, Aer Lingus and Alaska
aren't offering ancillary products through the GDS at all.
“Certainly the GDS hasn't caught up with the activities
going on at these airlines' websites,” Sorensen said.