Posted by Courtney E. Howard 

SHOREWOOD, Wis., 23 Oct. 2011. The International Air Transport Association officials revealed their industry outlook for the year, in which they predict the industry to achieve $4 billion in annual profit, carriers to spend $10 billion more on jet fuel this year vs. last year, and the airline industry to have generated $32.5 billion in ancillary revenue. This ancillary revenue has saved the industry from a loss-making position and continues to provide a hedge against runaway fuel bills, says a spokesperson.

According to IdeaWorks, a research and software company in Columbia, Mo., finds that the majority of ancillary revenue for U.S. airlines is generated by the sale of frequent flier miles, especially those linked to co-branded credit card activity. This financial activity exceeds $6.5 billion annually in the U.S. alone. Baggage fees for U.S. carriers represent approximately 20 percent of ancillary receipts, whereas the remaining revenue is produced by à la carte and commission-based activities, including on-board sales of food, beverages, Wi-Fi, and hotel bookings, as well as priority security screening, early boarding, and exit row seat assignments.

Amadeus and IdeaWorks have calculated global ancillary revenue activity.

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Amadeus Worldwide Estimate of Ancillary Revenue
Arline Category		2011 Ancillary Revenue		2010 Ancillary Revenue		Increase for 2011
US Major Airlines		$12.5 billion		$6.7 billion		87%
Low Cost Carriers		$4.8 billion		$3.6 billion		33%
Traditional Airlines		$10.9 billion		$8.5 billion		28%
Ancillary Revenue Champs		$4.3 billion		$3.8 billion		13%
Worldwide Totals		$32.5 billion		$22.6 billion		43.8%
Source: Ancillary revenue statistics applied by IdeaWorks to individual airline revenue results listed in the Worldwide Airline Report in the July 2011 issue of Air Transport World.

 

Ancillary Revenue Estimates by World Region
World Region		2011 Ancillary Revenue		2010 Ancillary Revenue		Increase for 2011
North America		$15 billion		$8.7 billion		72%
Africa / Middle East		$1.4 billion		$0.9 billion		52%
Latin America / Caribbean		$0.8 billion		$0.6 billion		47%
Asia / Pacific		$6.3 billion		$4.8 billion		30%
Europe		$9 billion		$7.6 billion		18.7%
Source: Ancillary revenue statistics applied by IdeaWorks to individual airline revenue results listed in the Worldwide Airline Report in the July 2011 issue of Air Transport World.

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