Airline ancillary revenue hit $38.1bn in 2014 according to US-based aviation consulting company IdeaWorks, a  rise of almost +21%. This compares with a contraction of -0.2% to just over $3bn for airline DF&TR sales based on preliminary 2014 data from Generation Research.

Five years prior, in 2009, ancillary revenue (as posted by 47 airlines) reached $13.5bn whereas DF&TR airline sales were $2.4bn. In other words the ancillary business was 5.6 times as large. By 2014 ancillary revenue has become 12.7 times bigger (although this comparison is now based on 63 airlines, see chart below).

Booming ancillary revenue – from components such as credit card payment fees, checked bags, assigned seating, frequent flier miles, hotel and car rental etc – has been a focus for many airlines, particularly low-cost carriers (LCCs).  In this latter sector, sales leapt by +32.8% to more than $2.9bn. But it is the US that dominates the global market with a 56% share (see pie chart).

LIMITED ANCILLARY DISCLOSURE

IdeaWorks’ $38.1bn figure is based on 63 airlines tracked by the company and it reports that this equates to $17.49 per passenger, which is +8.5% more than the 2013 result. The consultant says that of the 130 airlines globally that make financial filings just these 63 disclosed qualifying ancillary revenue activity.

Among the top 10 airlines for ancillary revenue, there are few changes from 2013:  Alaska joins the list due to the merger of American and US Airways while LCCs take three of the positions (see table and click to enlarge).

These top 10 carriers achieved a huge increase of nearly $4.6bn in a single year, which represents revenue growth in excess of +22.5%. Revenues and passenger traffic for these airlines increased due to improving economies and these are leading factors for annual ancillary revenue gains.