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International / Airlines
Airline ancillary revenues hit $13.5bn in 2009
By Doug Newhouse, 22 July 2010
IdeaWorks, supported by Amadeus says that early results from an analysis of 2009 financial filings made by 96 airlines indicate that ancillary revenues increased by E.3.32bn from 2008 to a total of E.11bn ($13.5bn) for 2009, with Delta, Qantas, and Ryanair emerging as the top ancillary revenue earners in the year.
These estimates include revenue from baggage, F&B sold onboard, commissions from the sale of hotel accommodations, car rentals, and travel insurance at airline websites, and partner revenue generated by frequent flier programmes.
IdeaWorks describes itself as the foremost consultancy focused on airline ancillary revenues and Amadeus is a leading travel technology partner and transaction processor for the global travel and tourism industry.
ANCILLARY REVENUES ROSE BY 43%
In a joint statement, IdeaWorks and Amadeus said: "Findings show the airline industry's ancillary revenue tidal wave continued in 2009 with more carriers disclosing millions ‒ and billions ‒ in ancillary receipts in financial reports. The 43% increase over 2008 also reflects new a la carte fees and commission-based services.
"During 2009, ancillary revenue became a crucial component of the revenue mix for all types of carriers - from major to small - worldwide to regional - LCC to full service."
The two companies say that the 2008 results were calculated in euros, re-stated based upon a E.1.0 = $1.33 exchange rate for the period, while the 2009 results were calculated in euros, re-stated based upon a E.1.0 = $1.23 exchange rate for the period.
TOP 10 LIST OF AIRLINES
IdeaWorks' findings with regards to the current top 10 list of airlines show subtle changes from the 2008 ranking. It says US-based network airlines fill the top three positions by courtesy of robust partner revenue from frequent flyer programmes and a stronger emphasis on baggage fees. But revenue from this mature group has stabilised, while the revenue produced by lower-ranked carriers has jumped dramatically.
The fourth place slot is now held by Qantas at a 25% revenue premium above the same position held by Ryanair in 2008. The annual revenue required to join the top 10 club now begins at E.300m. US Airways and Air Canada are new to the list, displacing JetBlue and Emirates.
TOP 10 BY ANCILLARY REVENUE
The Top 10 airlines by ancillary revenue in 2009 were as follows: United Airlines: E.1.527,310,000; American Airlines: E.1,507,750,000; Delta: E.1,117,120,500; Qantas: E.782,903,000; Ryanair: E.663,600,000; easyJet: E.608,796,693; US Airways: E.540,589,500; Air Canada: E.534,143,000; Alaska Airlines: E.368,869,000; and TAM Airlines: E.356,742,400.
TOP 10 as '%' OF TOTAL REVENUE
The top 10 airlines with ancillary revenue as a percentage of total revenue were: Allegiant: 29.2%; Spirit: 23.9%; Ryanair: 22.2%; easyJet: 19.4%; Tiger Airways: 19.4%; Jet2.com: 18.1%; Aer Lingus: 14.4%; Flybe: 13.2%; and AirAsia: 13.1%. The two companies added that Spirit Airlines and Tiger Airways joined the '% of total revenue list' for 2009 because the carriers only recently disclosed ancillary revenue results.
"Spirit is a privately held carrier and disclosures are rare and Tiger made disclosures for 2009 due to its initial public offering. Eight carriers in the 2008 list scored higher percentages for 2009. Of the two that dropped off the list, SkyEurope ceased operations and Germanwings was folded into Lufthansa Group during 2009.
TOP 10 RANKING BY REVENUE PER PASSENGER...
The top 10 airlines measured by ancillary revenue per passenger were: Allegiant: E.24.89; Jet2.com: E.22.51; Spirit: E.22.35; Qantas: E.20.37; United: E.18.76; Air Canada: E.17.23; Aer Lingus: E.16.72; Alaska Airlines: E.16.47; American Airlines: E.14.43; and easyJet: E.13.47.
Commenting on these results IdeaWorks and Amadeus said: "Overall 'per passenger' activity for 2009 clearly increased with top and bottom results better than 2008. Allegiant continues to achieve strong growth with a nearly 25%increase above 2008 results. UK-based carrier Jet2.com generated an amazing 58% increase, while Qantas posted a spectacular 72% jump. A major upset occurred with ancillary revenue champ Ryanair falling off the top 10 list and arch-rival easyJet entering the list at the number 10 slot for 2009."
The Amadeus Guide to Ancillary Revenue by IdeaWorks will be available for online purchase in September 2010 at $449 per copy.
By Doug Newhouse, 22 July 2010
IdeaWorks, supported by Amadeus says that early results from an analysis of 2009 financial filings made by 96 airlines indicate that ancillary revenues increased by E.3.32bn from 2008 to a total of E.11bn ($13.5bn) for 2009, with Delta, Qantas, and Ryanair emerging as the top ancillary revenue earners in the year.
These estimates include revenue from baggage, F&B sold onboard, commissions from the sale of hotel accommodations, car rentals, and travel insurance at airline websites, and partner revenue generated by frequent flier programmes.
IdeaWorks describes itself as the foremost consultancy focused on airline ancillary revenues and Amadeus is a leading travel technology partner and transaction processor for the global travel and tourism industry.
ANCILLARY REVENUES ROSE BY 43%
In a joint statement, IdeaWorks and Amadeus said: "Findings show the airline industry's ancillary revenue tidal wave continued in 2009 with more carriers disclosing millions ‒ and billions ‒ in ancillary receipts in financial reports. The 43% increase over 2008 also reflects new a la carte fees and commission-based services.
"During 2009, ancillary revenue became a crucial component of the revenue mix for all types of carriers - from major to small - worldwide to regional - LCC to full service."
The two companies say that the 2008 results were calculated in euros, re-stated based upon a E.1.0 = $1.33 exchange rate for the period, while the 2009 results were calculated in euros, re-stated based upon a E.1.0 = $1.23 exchange rate for the period.
TOP 10 LIST OF AIRLINES
IdeaWorks' findings with regards to the current top 10 list of airlines show subtle changes from the 2008 ranking. It says US-based network airlines fill the top three positions by courtesy of robust partner revenue from frequent flyer programmes and a stronger emphasis on baggage fees. But revenue from this mature group has stabilised, while the revenue produced by lower-ranked carriers has jumped dramatically.
The fourth place slot is now held by Qantas at a 25% revenue premium above the same position held by Ryanair in 2008. The annual revenue required to join the top 10 club now begins at E.300m. US Airways and Air Canada are new to the list, displacing JetBlue and Emirates.
TOP 10 BY ANCILLARY REVENUE
The Top 10 airlines by ancillary revenue in 2009 were as follows: United Airlines: E.1.527,310,000; American Airlines: E.1,507,750,000; Delta: E.1,117,120,500; Qantas: E.782,903,000; Ryanair: E.663,600,000; easyJet: E.608,796,693; US Airways: E.540,589,500; Air Canada: E.534,143,000; Alaska Airlines: E.368,869,000; and TAM Airlines: E.356,742,400.
TOP 10 as '%' OF TOTAL REVENUE
The top 10 airlines with ancillary revenue as a percentage of total revenue were: Allegiant: 29.2%; Spirit: 23.9%; Ryanair: 22.2%; easyJet: 19.4%; Tiger Airways: 19.4%; Jet2.com: 18.1%; Aer Lingus: 14.4%; Flybe: 13.2%; and AirAsia: 13.1%. The two companies added that Spirit Airlines and Tiger Airways joined the '% of total revenue list' for 2009 because the carriers only recently disclosed ancillary revenue results.
"Spirit is a privately held carrier and disclosures are rare and Tiger made disclosures for 2009 due to its initial public offering. Eight carriers in the 2008 list scored higher percentages for 2009. Of the two that dropped off the list, SkyEurope ceased operations and Germanwings was folded into Lufthansa Group during 2009.
TOP 10 RANKING BY REVENUE PER PASSENGER...
The top 10 airlines measured by ancillary revenue per passenger were: Allegiant: E.24.89; Jet2.com: E.22.51; Spirit: E.22.35; Qantas: E.20.37; United: E.18.76; Air Canada: E.17.23; Aer Lingus: E.16.72; Alaska Airlines: E.16.47; American Airlines: E.14.43; and easyJet: E.13.47.
Commenting on these results IdeaWorks and Amadeus said: "Overall 'per passenger' activity for 2009 clearly increased with top and bottom results better than 2008. Allegiant continues to achieve strong growth with a nearly 25%increase above 2008 results. UK-based carrier Jet2.com generated an amazing 58% increase, while Qantas posted a spectacular 72% jump. A major upset occurred with ancillary revenue champ Ryanair falling off the top 10 list and arch-rival easyJet entering the list at the number 10 slot for 2009."
The Amadeus Guide to Ancillary Revenue by IdeaWorks will be available for online purchase in September 2010 at $449 per copy.
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