Global ancillary revenues to hit $67.4 billion, CarTrawler predicts

Global ancillary revenues to hit $67.4 billion, CarTrawler predicts

Global airline ancillary revenue is projected to reach $67.4 billion this year.

The figure represents an almost 200% increase from the 2010 figure of $22.6 billion and is up from a total of $59.2 billion last year, according to a new study by consultancy IdeaWorksCompany for CarTrawler.

Revenue from optional services, such as onboard sales of food and drinks, checked baggage, premium seat assignments, and early boarding benefits, was determined to represent $44.9 billion of the projected global 2016 total.

The smaller share, at $22.5 billion, comes from non-fee activity such as the sale of frequent flyer miles to programme partners, and commissions earned on the sale of ground-based services to travellers, such as hotel accommodations and car rentals.

The total figure represents 9.1% of worldwide airline revenue of $740 billion compared with 4.8% of $474 billion six years ago.

CarTrawler chief commercial officer Aileen O’Mahony said: “Successful ancillary revenue generation is dependent on offering customers the right product at the right time, often before they have even asked for it.

“Amazon has proven to great effect the positive impact that data science has had on its business with an estimated one third of total sales now coming via their recommendation algorithm.

“As with Amazon, the unlocking of data-driven insights is enabling airlines to propose ancillary products and services to their customers in an increasingly sophisticated way.

“This application of data is fueling the continued growth of the sector while at the same time unearthing further potential for building loyalty by identifying when, how, where and what to offer customers when they visit your website or app.”

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