Onboard retail boosts United Airlines’ ancillary revenue

By Andrew Pentol |

United Airlines small

United Airlines generated ancillary revenue of $5.75bn in 2017.

United Airlines topped a 10-strong airline list for ancillary revenue in 2017, generating $5.7bn. Revenue from a la carte features such as bags and travel retail commissions comprised 59% of the carrier’s total ancillary revenue last year. 

The US carrier was followed in the ancillary revenue rankings by the likes of Delta ($5.4bn), American (5.3bn), Southwest ($3.1bn) and Ryanair ($2.3bn).

According to statistics provided by the IdeaWorks Company, ancillary revenue (a la carte features, commission based products and frequent-flyer programmes etc) has grown each year since the company began searching airline financial documents in 2007. Ten years ago, the top-10 airlines, as rated by ancillary revenue, generated $2.1bn. Last year the top-10 total amounted to $29.7bn.

Meanwhile, the top-10 airline list for ancillary revenue per passenger is dominated by low-cost carriers. Spirit (Americas) tops the list at $50.97, followed by Wow Air (Europe & Asia) at $48.87 and Frontier at $48.33.

Michael Cunningham, Senior Vice President of Distribution at CarTrawler, which sponsors the analysis said: “Ancillary revenue keeps on growing and has become a mandatory component for the revenue mix of all airlines. Investors were first delighted by it and now have come to expect it.

“That expectation also occurs with consumers who appreciate the flexibility and array of services delivered by airlines. The best producing airlines have become expert retailers of travel-related services, which includes the ability to book hotels, attractions, and of courseground transport.”

IdeaCompany Ancillary Revenue 3

Last year, revenue from a la carte such as bags and travel retail commissions accounted for 59% of total ancillary revenue, according to the IdeaCreative Company analysis.

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