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..Amadeus Worldwide Estimate of Ancillary RevenueArline Category2011 Ancillary Revenue2010 Ancillary RevenueIncrease for 2011.
