30-Oct-2012 1:32 PM

Airline ancillary revenue projected to jump 11.3% in 2012 to USD36.1bn

Amadeus and IdeaWorksCompany released (29-Oct-2012) its worldwide estimate of ancillary revenue, which forecasts airline ancillary revenue in 2012 will increase 11.3% year-on-year to USD36.1 billion in new receipts. Amadeus senior VP distribution Holger Taubmann said it was "encouraging to see ancillary revenue growing at over 11% this year which demonstrates the significant commercial potential for airlines. However, to capitalize on this, it is imperative that airlines adopt a multichannel approach, accessing the opportunity presented by in-direct travel agency sales of ancillary services". 

Ancillary revenue performance by airline category:

  • Traditional airlines: Expected to earn USD12.8 billion in ancillary revenue in 2012, up 17%. This category represents a catch-all for the largest number of carriers. Ancillary revenue activity may consist of fees associated with excess or heavy bags and limited partner activity for a frequent flyer programme. The average percentage of revenue remained at 2.9%;
  • Major US airlines: Expected to earn USD12.4 billion in ancillary revenue in 2012, down 0.8%. US-based majors generate strong ancillary revenue through a combination of frequent flyer revenue and baggage fees. The percentage of revenue for this group was 10.1%, which is a drop from the 2011 rate of 11.9%;
  • 'Ancillary Revenue Champs': Expected to earn USD5.6 billion in ancillary revenue in 2012, up 30.5%. These carriers generate the highest activity as a percentage of operating revenue. The percentage of revenue achieved by this group was 19.7%, which is down slightly from 19.8% for 2011;
  • Low-cost carriers: Expected to earn USD5.4 billion, up 12.8%. The percentage of revenue for this group was 7.2% and is above last year’s 6.5%.

 Ancillary estimates by region:

Want More News Like This?

CAPA Membership gives you access to all news and analysis on the site, along with access to many areas of our comprehensive databases and toolsets.
Find Out More