Airline ancillary revenue will rise 13% to reach $92.9 billion worldwide this year.
The figure represents a 312% increase from the 2010 total of $22.6 billion, according to latest estimates.
Specialist consultancy IdeaWorksCompany compiled the numbers from disclosures by 73 airlines for 2017 and applied the statistics to a larger list of 175 carriers to provide a global projection of ancillary revenue activity by the world’s airlines for 2018.
Ancillary revenue is generated by activities and services that yield cash flow for airlines beyond flying passenger from A to B.
This includes commissions from hotel bookings, the sale of frequent flyer miles to partners and providing extras for consumers that helps drive more profit for airlines.
Applying the global ancillary revenue estimate to Iata forecasts yields a result of $21.32 per passenger.
Iata also estimates the airline industry will spend $188 billion on fuel during 2018, which is up substantially from last year’s level of $149 billion.
This means that ancillary revenue now equals almost half of the industry’s annual fuel bill.
“All those individual sales of seat assignments, checked bags, and frequent flyer points provide a solid hedge against fuel prices,” the report said.
“Economic fluctuations can quickly alter the health of the global airline industry and lead to higher fares. The results described in this annual estimate represent good news for airlines and consumers.
“The connection between ancillary revenue and financial health for airlines is now clear and is a solid component of the industry’s financial profile.
“Consumers too are learning to appreciate the a la carte choice as revenue-savvy airlines have become better shopkeepers. Consumers will always reward companies that treat them honestly with fairly priced products that provide what is promised.”
Aileen McCormack, chief commercial officer at vehicle rental distribution systems provider CarTrawler, sponsor of the report, said: “Nearly $93 billion in revenue indicates that good merchandisers are selling products desired by a vast number of customers.
“Iata estimates more than 4.3 billion travellers will depart on flights in 2018.
“Most of them now have the choice of paying a little extra for more comfort and convenience – thus providing airlines with a golden opportunity to build and strengthen their customer experience in the long term.”