Sunday, October 26, 2014

The top 10 Airlines That Make Money From Non-Ticket Fees

Did you ever wonder about how those non-ticket airline fees always seem to creep up year after year? Well if you did, then the following data will confirm your worst fears. Airlines are making more and more money from non-ticket,or ancillary fees, and it's now become an integral part of their business model—for budget airlines and traditional airlines alike. It's time to look more closely at which airline is making what from ancillary fees.


Source: Motley Fool Flickr Account



What is ancillary revenue?
Ancillary revenue is defined in the CarTrawler Yearbook of Ancillary Revenue by IdeaWorksCompany as coming from four main revenue streams:

  • A la carte features such as onboard food and beverage sales, baggage and checking in fees, seat assignment fees, onboard entertainment, and priority services
  • Frequent Flier Programs comprising of sales of miles/points to program partners and/or members
  • Commission-based products, for example, commissions earned for travel insurance, hotel accommodation or car rentals
  • Advertising sales, typically involving things like in-flight magazine advertising, and signage and airports
READ THE FULL EQUITY RESEARCH ARTICLE LINKED HERE