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Ancillary revenues: Airlines to earn USD58 billion in 2010; CAPA to review Asia Pacific prospects

The world’s airlines are expected to generate USD70 billion in ancillary revenues this year – or almost one in every eight dollars of revenue earned, according to CAPA research.

“Other Revenue” (ie ancillary, USD billion):
IATA’s Jun-2010 forecast (blue line) vs Dec-2009
forecast (red line): 2001 to 2010F

Source: Centre for Asia Pacific Aviation & IATA

“Other Revenue” share of total revenue:
IATA’s Jun-2010 forecast (blue line) vs Dec-2009
forecast (red line): 2001 to 2010F

Source: Centre for Asia Pacific Aviation & IATA

Ancillary revenue is a hot topic for the airline industry, as it seeks to cope with pressures on top line revenues from ticket sales amid intense competition. The ancillary revenue (merchandising) revolution centres on airlines unbundling their service offering and charging passengers for items they wish to purchase. Baggage fees are one of the fast growing items in ancillary portfolios that also includes seat allocation, inflight services and products, related travel products (including insurance, car hire and accommodation), inflight advertising, airport lounges access and increasingly diverse opportunities, including concert tickets, mobile phone credits and more.

CAPA also publishes Peanuts! Weekly, which regularly covers ancillary revenue trends and developments.

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