Airline ancillary revenue is projected to rise 13% to $65.8 billion worldwide this year, compared to $58.1 billion in pandemic-hit 2020.
The increase is being driven by gains in passenger traffic, with consumer support for ‘a la carte services’ and co-branded credit cards holding steady.
Consumer purchase behaviour of a la carte services changed during the pandemic as travellers paid for additional services to create a “personal cocoon of protection” from Covid-19, according to a new report.
The findings come in a CarTrawler worldwide estimate of ancillary revenue using data from consultancy firm IdeaWorksCompany..
The study is based on data disclosed earlier this year by 75 airlines for 2020 and applied to a larger list of 109 carriers to provide “a truly global projection” of ancillary revenue activity by the world’s airlines for 2021.
The value of add-on services by airlines was first estimated in 2010 at $22.6 billion.
Ancillary revenue per passenger in 2012 was $12.13; by 2019 this had increased to $23.91, and the 2021 projection is $27.60.
“Checked baggage activity increased because travellers might be relocating their lives or staying at destinations for a longer period,” the report said.
“Because business travel declined, a greater share of passengers consisted of leisure travellers. Since leisure travellers tend to check more bags, this boosted baggage revenues.
“Seat assignments, which for many carriers now involves a fee, are more frequently purchased. Popular choices were up front seats, to ensure less waiting in congested aisles upon arrival, and exit-row seats to provide more personal space.
“Onboard entertainment and wi-fi access – sometimes a paid option – allow travellers to avoid conversation with seat mates, reducing the opportunity for viral transmission.
“In effect, travellers bought a la carte services to create a personal cocoon of protection from Covid-19.”
CarTrawler chief commercial officer Aileen McCormack said: “As the travel industry continues its recovery, ancillary services have become an increasingly important revenue stream for airlines, and we project this grew by more than $7 billion in 2021 compared to 2020.
“Consumers are seeking more flexible, personalised services and offerings from airlines, opening up huge opportunities for the market.
“As we look to 2022, the airlines that come out on top will be the ones that find creative ways to use ancillary services to meet the evolving demands of travellers.”
EasyJet saw its ancillary revenue per seat improv e. by almost 27% in the second quarter of the year over the previous tree months
The UK budget carrier added fare options, including up front seating, speedy boarding, and larger carry-ons
Ryanair posted second quarter ancillary revenue which was more than 16% higher on a per passenger basis than the same period for 2019.
Wizz Air disclosed ancillary revenue per passenger increased by 25% for the second quarter of 2021 compared to the same three months in 2019.