If you feel as though airlines are hitting you with a new charge every time you turn around, it’s probably because they are.
Airlines have increased their ancillary revenue, or money earned from activities other than selling seats on planes, a whopping $20 billion in the past four years, according to monitoring.
The Amadeus Yearbook of Ancillary Revenue by IdeaWorks Company includes figures for 50 airlines and shows strong growth in “extra revenue” from sources such as charging for on-board meals, charging for baggage and collecting commissions on hotel bookings.
In 2008, when the first report was produced, ancillary revenue was a relatively new thing, with airlines’ combined earnings less than $2.5 billion. This year, the figure exceeds $22 billion, with revenue from frequent-flyer programs one of the biggest factors.
The Qantas group topped the list for revenue per passenger, thanks to its huge frequent-flyer program and co-branded credit cards.
No-frills carriers are earning up to a third of their revenue from extras, with Tiger Airways at about 19 per cent. In a sign of what could be to come, the US low-cost carrier Spirit Airlines last year collected more than $40 million for “advance seat selection” alone.
Virgin Australia was not included in the report as it does not reveal its ancillary revenue.
This article is an excerpt from Jane E. Fraser’s weekly travel column in The Sun Herald, Sydney.
