Discussion on Ancillary Revenue of Global Airline to reach $100B in 2018

The latest report by CarTrawler and IdeaWorksCompany indicates that airline ancillary revenue will reach 93 billion dollars in 2018. In comparison with the revenue of 2016, a figure of 13 percent is represented by the revenue of 2017.

Airlines are divided into four categories by Ancillary Revenue including champs, low-cost carriers, US carriers, and traditional carriers. For instance, traditional carriers which are collecting revenue from flyer partner activity, extra legroom, and excess baggage, didn't observe any change in the average revenue percentage.

Generally, it was a similar story for carriers of the US which produce ancillary revenue through baggage fees and flyer mileage fees.

Standouts

In terms of ancillary revenue, champs were the better performers which observed an increase of three percent in average revenue percentage. Meanwhile, for LCCs, it rose just under a specific percentage point. In these categories, initiatives from various airlines such as Flight Club of EasyJet and dynamic pricing of Air Asia, are emphasized upon in the report for boosting the annual ancillary revenue.

Initiatives around the economy fares, for traditional carriers, which encouraged travelers to trade also played an important role in increasing revenue. An important and interesting component is that international ancillary revenue accounts for approximately 10.7 percent of the overall revenue in comparison with 4.8 percent in 2010.

Additionally, if the activity of frequent flyer is removed and the rate of la carte portion is measured, the ancillary revenue would be 7.4 percent of the total revenue in comparison with 2.6 percent in 2010. This report also looks at the figure predicted by IATA in the context of 871 billion dollars in spending. This amount will be spent by 4.3 billion of passengers in 2018 and this reveals an estimate of 21.32 dollars on each passenger.