Airlines around the world will collect an estimated £22 billion (€47.4 billion) in extra fees and charges this year, according to new research.
The figure represents an increase of 11 per cent on last year’s total, and is nearly 40 per cent more than carriers received in 2010.
With total airline income remaining stagnant during that time, it also illustrates just how dependent many airlines have become on “ancillary” revenue, from baggage charges and administration fees to car hire sales and in-flight food and drink, to maintain their profits.
The study, by Amadeus, a travel technology provider, and IdeaWorksCompany, an aviation consultancy, divided airlines into different categories, based on what percentage of their revenue is made from non-ticket sources.
Traditional airlines – such as British Airways, Air Canada, Air New Zealand and Etihad – were placed at one end of the spectrum, and “Ancillary Revenue Champs” – the report highlights AirAsia, easyJet, Allegiant Air and Spirit Airlines – at the other. While the latter group, perhaps unsurprisingly, increased its ancillary revenue by 30.5 per cent during the last year, the amount earned by traditional airlines also increased significantly, by 17 per cent.
The figure of £22 billion (€47.4 billion) is likely to increase again next year. Charges for carrying luggage in the hold continue to rise – this year Ryanair raising its fee to £25 (€31.13) per-flight for a single bag during peak season – more no-frills airlines are offering allocated seating – easyJet did so in September, with the optional service priced from £3 (€3.70) to £12 (€14.94) – and last month Wizz Air became the first European airline to charge passengers to carry hand luggage.
Passengers taking bags larger than 42cm x 32 cm x 25 cm on board the Hungarian no-frills carrier must pay £9 each way, although that fee pales in comparison to the charge imposed by US-based Spirit Airlines for carry-on luggage. Its fee ranges from £22 (€27.40) to £62 (€77.19), depending on whether passengers choose to pay during booking, or at the airport.
Airlines claim such charges allow them to keep headline fares low, but passengers often complain that they reduce transparency and make it more difficult to compare fares – a survey of 11,500 Britons by TripAdvisor this week suggested that 73 per cent would boycott airlines that impose a hand luggage fee.
The report by Amadeus concludes: “Despite the International Air Transport Association (IATA) revising its projection of airline profitability for 2012, the operating environment remains challenging. The current situation has made ancillary revenue more attractive, and needed, for airlines all over the world.”
Oliver Smith Telegraph.co.uk