A new study by IdeaWorks found that the ancillary revenues of airline companies for 2014 has increased by 21% from the previous year to reach $38 billion!
Ancillary revenues are the revenues collected from fees like fees on overweight and oversized bags or premium seats. All airlines companies benefit from those revenues but some of them include fees on almost every service: one checked bag, Booking by phone, Online payment, food and drink, blankets and pillows. One of them is Spirit which almost 40% of its revenue is coming from fees.
Those airlines put the basic fare prices on their websites and comparative websites to attract customers, then charge them on additional services. As their fees and revenues are increasing, customer dissatisfaction too.
Some travelers don’t notice that they will pay extra fees on carry-on luggage. Others, pay more to get flier miles however the miles may got expired or can’t be exchanged by the wanted ticket. Meanwhile, the airline company generate a lot of profit from the credit card companies.
Those are the top 10 companies by their ancillary revenues.
- United – $5.7 bn
- US Airways – $4.7 bn
- Delta – $3.2 bn
- Air France/KLM – $2 bn
- Ryanair – $1.9 bn
- Southwest – $1.8 bn
- Lufthansa – $1.6 bn
- easyJet – $1.4 bn
- Qantas Airways – $1.3 bn
- Alaska Air – $1 bn
The United States airlines are the best at extracting fees from their customers, profiting from 56% of the global ancillary revenues and followed by European airlines. However, airline companies in the Middle East and Africa get only 1% of fees revenues.