World: Airlines will collect GBP62b in extra charges this year

The amount of money the world’s airlines collect from optional extras, such as bag charges, seat selection and credit card fees, has grown by 264% in seven years. A new report on “ancillary” revenue, which includes all income beyond the standard airfare, has estimated that carriers will rake in $82.2b in extras for 2017, up from $67.4b last year, and $22.6b in 2010. It all adds up to $20 per passenger. Ancillary sources now account for 10.6% of all revenue – up from 4.8% seven years ago. But for some airlines the figure is far higher. IdeaWorksCompany, the firm behind the report, pinpoints several “Ancillary Revenue Champs”, such as Ryanair, Wizz, Frontier and Spirit. As a percentage of total revenue at these carriers, ancillary sources accounts for between a fifth and half. But the biggest growth in ancillary revenue this year was among traditional airlines, with the likes of BA increasingly attempting to compete with their low-cost rivals by charging for food and drink, for example, or for seats with extra legroom. “With few exceptions, airlines all over the world are moving to a la carte methods to provide more choices for consumers while boosting ancillary revenue,” says the report. “For example, throughout North America, Europe, and Australasia, basic economy fares are now prevalent for short- and medium-haul travel.” It estimates that baggage fees account for 27% of total ancillary revenue, and on-board sales of food, drink and duty-free goods for 21%. Revenue from hotel partnerships and car hire, as well as frequent fliers programmes, also contribute.<br/>