Buying ‘extras’ when flying? You’re making airlines billions
Airlines are making an enormous profit from all the ‘extras’, leaping more than 10 times in the last 10 years.
According to a report from NZ Herald, a study of 10 airlines that make the most money from ancillary products shows the revenue number sits at around $40 billion.
That’s a big number, especially when compared to previous figures – US$2.1 billion in 2007, and over US$28 billion last year.
Per NZ Herald, the study from IdeaWorksCompany shows that despite airfares being darn close to historic lows, passengers wanting meals inflight, checked baggage, and frequent flier schemes are getting stung with bigger price tags.
Airlines in the top 10 biggest ancillary earners included United Airlines, which actually makes the most with US$6.2 billion earned from ‘extras’ last year alone, AirAsia, Ryanair, easyJet and Qantas.
Following on from United Airlines, other US carriers took the next top three spots, with most profits coming from frequent flier programs and co-branded credit cards linked to the programs.
- United: $6.22 billion
- Delta: $5.17 billion
- American: $4.9 billion
- Southwest: $2.83 billion
- Air France/KLM: $2.10 billion
Per NZ Herald, Ryanair and easyJet made the entirety of their ancillary revenue from a la carte services such as bags or food, clocking up nearly US$2 billion and US$1.3 billion, respectively.
And when looking at ancillary revenue per passenger, around the world the top earners included Spirit in America at US$49.9; Jet2.com in Europe and Russia at $42.46; AirAsia X in the APAC region with $34.41.
- Spirit: $49.89
- Allegiant: $48.93
- Frontier: $48.60
- United: $43.46
- Jet2.com: $42.46
- Qantas: $42.38
- Virgin Atlantic: $42.25
- AirAsia X: $34.41
- Korean Air: $32.59
- Alaska Air: $31.41
Our own national carrier, Qantas, saw 90 per cent of its ancillary dollars coming from its points scheme, per NZ Herald, with US$1.2 billion all together.
“Low cost carriers rely upon a la carte activity by aggressively seeking revenue from checked bags, assigned seats, and extra leg room seating,” the report claimed, per the Herald.
“Some of the best in this category have extensive holiday package business with route structures built upon leisure destinations.”
Meanwhile, Air New Zealand, and carriers from the Middle East and Africa did not rank in the top 10 ancillary revenue lists.
Per NZ Herald, the President of IdeaWorksCompany, Jay Sorensen, said there are two main reasons that airlines would refrain from sharing their ancillary revenue figures publicly.
“One would be a competitive fear, that other airlines would take note,” he said, per Herald.
“The second is a public relations fear, that reporters would pen articles that lampoon airlines which are successful at this.”
Apparently, Britain’s easyJet airline stopped revealing its numbers for the latter reason, per Sorensen.
“Of course, airlines that report results are happy to show investors the results of their effective management.”
Email the Travel Weekly team at traveldesk@travelweekly.com.au
ancillary revenue extras united airlinesLatest News
Travel DAZE Exec Agenda REVEALED: top execs to speak on airline competition
As the industry reels from Bonza's implosion, it is more important than ever to ask the big questions.
Skroo says Rex will need deep pockets to fill lost Bonza slots
The door is open for Rex, and anyone else who wants to launch a regional Aussie airline...
Hilton Expands Presence in North Queensland with the signing of Hilton Garden Inn Townsville
Heading to a North Queensland Cowboys clash? Hilton Garden Inn Townsville is set to open, but not until 2026.
Amy Poehler joins Vivid Sydney event
Oh Joy! Hit comedian Amy Poehler will make an emotional appearance at the Sydney Opera House for Vivid.
Emirates unveils future plans with new hub at Al Maktoum International Airport
We've also been looking into our future. It involves plenty of famils, we hope.
Two thirds of Australians support introduction of tourism tax, survey reveals
Can you guess which generation was the most outraged at the news? Hint: It is exactly who you think!
“The consumer really just wanted more classic reward availability” – customers underwhelmed by Qantas FF shakeup
All this consumer wants is to sit behind someone that doesn't push their seat back to near-horizontal levels.
Aussie travellers warned of ‘significant’ visa shifts in destinations including Chile, US and Vietnam
To be honest are biggest advice for having a layover in the US, is just don't.
Profile: Delta CEO Ed Bastian
Bastian says the airline business isn't for the faint hearted. We're sure Alan Joyce would agree!
Final Call: Travel DAZE Exec early birds are about to expire
Much like the auctioneer at the hottest sale of the year, we're giving you one more chance to jump at this deal!
Forget the weekend! Experience Gold Coast launches mid-week travel campaign
Your boss might be a bit bothered if you jet off mid-week, but you'll be the envy of all of your Instagram followers.
Victorian Tourism Industry Council warns of losing tourism dollars to NSW & QLD
Trendy cafe's hidden in CBD laneways can only get so many tourism dollars, clearly!
AIME 2024 rustles up $330m for APAC economy
This figure is a 65 per cent increase on 2023, much alike The Nibbler staff's alcohol consumption.
Amex GBT to purchase CWT for $871m
It's big deals like this that get a firm handshake - hence the sore hands over at the CWT and Amex GBT offices.
Boeing cleanout: CEO, chair to go as safety crisis plagues the manufacturer
CEOs are falling thick and fast these days. We should have started up a bingo game with their headshots in the office.
Star boss resigns, admits retaining NSW casino licence unlikely under his leadership
The CEO resigned after 18 months in the role. 'Another one bites the dust' rumoured to be heard playing in Pyrmont.
Corporate Traveller swings amateur golfers around the globe for World Golf Competition
How're your golf skills? Consider yourself a Tiger Woods or often get quadruple bogeys? We take after the latter.
Corporate travellers to spend big on Melbourne F1 despite financial pressures
Part of the attraction is sick days after the event as corporate travellers suffer creaked necks and blown eardrums.
Bonza officially kicks off Gold Coast-Darwin route
The Flying Purple Thumb is back at it with another route. We swear, we're going to make this nickname stick!
South West Sydney Tourism launches Western Sydney Tourism Awards
Penrith's 3 consecutive NRL premierships wasn't enough? The people of Western Sydney could fill the trophy cabinet more!
Hotels vs. Airbnb: Industry leaders at odds over who should pay accommodation levy
There's not as much gore in the Hotels vs. Airbnb saga as there is in Alien vs. Predator, but it's just as thrilling!
Singapore Airlines revamps premium economy with new menu, amenity kit
Felt Singapore Airlines was lacking "the sauce" (as the kids say). Bolster belief in the carrier's je na sais quoi here.
Business Events Adelaide set for 20th Destination SA event
Destination SA turns 20! Hopefully it's not celebrated with vodka cruisers and vapes like most 20th birthdays.
Boeing’s woes delay massive Virgin Australia order
This delay means Virgin staffers will be without that new plane smell, inspiring us to sell it in a can.
All the winners from the 2023 Qantas Australian Tourism Awards
Somehow missed this news recently? Good thing you're subscribed to our fabulous newsletter!
Corporate international travel from Brisbane up 30% YOY: Flight Centre
Queenslanders seem keen to go somewhere that actually serves good beer! Sorry, we actually like Great Northern.
Amora Brisbane undergoes $30m remodelling, geared up for MICE offerings
When $30m goes into an amazing hotel to get it geared up for MICE offerings, that's amore!
Corporate Travel Management’s CEO Laura Ruffles steps down
CTM confirmed that Ruffles will be stepping down due to a personal health issue, effective immediately.
Qatar Airways crowned World’s Best MICE Airline at World MICE Awards
You could say Qatar Airways really 'nabbed the cheese' with this one! Alright, we'll see ourselves out...
Qantas, Jetstar & Virgin hike airfares as supplier costs inflate
Supplier increases means you'll pay more. It's like pass the parcel, but instead of getting a present, you owe money.
NSW Central Coast wins global sustainability award for promoting ecotourism at ITB
NSW Central Coast jumped the gun on St. Patricks Day and got the green celebrations going early!
PHOTOS: RuPaul’s Drag Race stars hit Kings Canyon for Priscilla’s 30th anniversary
The stars have renamed the iconic spot 'Queens Canyon'. No name change to the adjacent 'Priscilla's Crack', however.
Air NZ to suspend Auckland-Chicago route amid aircraft troubles
Sorry Kiwis, your craving for authentic deep dish pizza will go unsatiated (or you could just fly with another airline).
Tasmanian Premier promises to build the world’s largest chocolate fountain if re-elected
If only sticky 6-year-old children could vote. Then the Tassie Premier would be guaranteed a victory!
The staggering amount invested in 2022/23 Australian tourism projects revealed!
Any guesses on how much it was? We'll give you a hint: It's between $1 and $9 trillion (hope this helps).
Marriott’s Bonvoy Lounge makes it a 5-peat at Formula 1 in Melbourne
If Formula 1 is so good, then why isn't there a Formula 2? Oh there is one... Never mind.