United Airlines’ Ancillary Revenue Growth Soars
Joe Cortez September 22, 2016
The Chicago-based carrier, along with legacy counterparts, leads global airlines in passenger upsales.
Five air carriers based in the United States now lead the world in a new category: collecting ancillary revenue from passenger upgrades, on-board purchases and checked baggage. The 2016 CarTrawler Yearbook of Ancillary Revenue, completed by IdeaWorks Company, revealed that all three legacy American airlines ranked at the top for ancillary revenue, led by United Airlines.
The study revealed that the Chicago-based carrier collected $6.199 billion in ancillary revenues in 2015, making them the global leader for ancillary revenue. American Airlines was a close second, collecting $4.718 billion in ancillary revenue, while Delta Air Lines ranked third with $3.775 billion in extras. Southwest Airlines ranked fifth with $2.119 billion, collecting more ancillary revenue than notorious low-cost carrier Ryanair. Rounding out the top ten was Alaska Air Group, collecting just over $1 billion in ancillary fees in 2015.
Among the international carriers, Air France-KLM was estimated to collect the most from flyers aboard their aircraft, believed to rake in $2.166 billion in 2015. Ryanair collected $1.739 billion from flyers, while Lufthansa Group (including low-cost subsidiary Germanwings) collected an estimated $1.494 billion in extras.
For those who are hoping ancillary fees will ultimately go away with the strengthening economy, CarTrawler and IdeaWorks suggest that all the extras are more than a fad. Revenue from ancillary fees grew 300 percent between 2008 and 2015, going from an $8.3 billion addition to the top global airlines, to a $25.9 billion business by 2015.
“Back in 2008 the threshold was $245 [million] for a top ten position in the ancillary revenue rankings,” researchers write in their report. “Now, the top ten group is a billion-dollar club with annual ancillary revenue ranging from just over $1 billion to nearly $6.2 billion per airline.”
Although ancillary fees are at an all-time high among airlines, some airlines are worse than others upselling the passenger experience. The study also revealed low-cost carriers Spirit Airlines and Allegiant Air collected the most in ancillary fees per person, adding an average of $51.80 and $49.94 to the cost of a ticket, respectively.
[Photo: United Airlines]
