Airline outlook: unbundling, fare families, ancillaries

Low fuel prices and new competition forced airlines to pass on savings to consumers, which drove traffic growth as price sensitive travellers took advantage of low fares. Nevertheless, unit revenue fell at a slower rate, partly thanks to ancillaries.

Rising oil prices now put the focus on revenue growth, although fare increases could temper demand from leisure markets. As airlines adjust to the new operating conditions, they are seeking alternative revenue optimisation strategies.

Finding the right mix of unbundled fares and fare families and also developing genuine ancillary (i.e. new) revenues will be crucial.

The CAPA World Aviation Outlook Summit 2018 on 27-28 November in Berlin will include a panel discussion on the commercial outlook for airlines and their revenue optimisation strategies. This report provides some background for that discussion.