Which Airlines Generate the Most Ancillary Revenue?

Ancillary revenue has increased among U.S. legacy carriers as discount carriers around the world continue to rely heavily it.

Traditionally, discount airlines have built their business models around ancillary revenue, offering inexpensive tickets and charging fees for everything else. However, according to a recent report, a growing number of legacy carriers are making money through ancillary channels as well.

According to The Motley Fool, which cited statistics from the 2014 CarTrawler Yearbook of Ancillary Revenue, the three legacy carriers in the U.S. — American Airlines, Delta Air Lines and United Airlines — made the most in ancillary revenue in 2013. Between the three carriers, the extra charges accounted for over $10 billion in revenue.

According to CarTrawler, ancillary fees are defined as anything outside of revenue earned from a ticket. These fees can be incurred from checked luggage, advance seat selection, the sale of frequent flyer miles and more.

United led the way among airlines in terms of ancillary revenue in 2013, generating more than $5.7 billion — 14.9 percent of their total revenue. The biggest contributor was the sale of frequent flyer miles, accounting for over $2.7 billion of United’s revenue. Delta brought in $2.53 billion in ancillary revenue during the same period, while American brought in $2.08 billion.

Meanwhile, discount airlines continue to rely heavily on ancillary revenue. In the U.S., Spirit Airlines and Allegiant Air attributed more than 30 percent of their total revenue to ancillary fees in 2013.

In terms of European budget carriers, Hungarian Wizz Air brought in the most from ancillary fees, earning an average of $34.40 per passenger, followed by Jet2.com. EasyJet and Ryanair both brought in less in ancillary fees and generated less revenue per passenger than their competitors.

[Photo: iStock]