Ancillary revenues to jump to over 12% of worldwide airline revenues this year and next

Airlines around the world of all shapes and sizes are busy mining the potential of ancillary revenue sources. That is because the lifeblood of the airline industry – ticket sales – are weak and yields are depressed and the outlook for a recovery is not especially promising. IATA this week estimated that USD80 billion in revenues would vanish from global airline industry coffers this year, falling to USD455 billion, or 15% lower than 2008 levels. But a little reported feature in IATA’s forecast is the expectation that “other revenue” (ie non passenger/cargo) would grow by almost 6% this year to around USD56 billion worldwide. [1795 words]

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This report contains the following subheadings:

• Ancillaries = profit
• 12% of total revenue – and rising
• Ancillary revenue outlook firmer than airline tickets
• Leading LCCs generating 15% or more of total revenues from ancillary sources

This report contains the following charts and tables:

• IATA other revenue: 2001 to 2010F
• IATA other revenue share: 2001 to 2010F
• Allegiant Air home page
• Select carriers’ ancillary revenue as a portion of totally revenues: 2008
• Select carriers’ ancillary revenue as a portion of total revenues: 2Q2009
• Allegiant ancillary revenue as a portion of total revenue:  1Q06 to 2Q09
• easyJet unit revenue figures: Three months ended 30-Jun-09
• AirAsia ancillary revenue growth and % of total revenue: 1Q2008 to 2Q2009
• Vueling revenue highlights for three months ended 30-Jun-09