Airline Add-Ons

By | Category: Travel rumblings

Sometimes you might be forgiven for thinking that the basic price of an airline ticket is peanuts. The add-ons are those little bits here and there that suddenly glare out at you on the final page and cause you to take a deep breath and say, “but the fare was only a tenner!” when I started. Now one of the biggest airline ticketing systems providers, Amadeus, has completed some research which shows that last year these add-ons were worth €15.11 billion.
That is an astonishing number so I’ll repeat it – €15.11 billion ($21.46 billion or about £13.25 billion.) More astonishing is that this comes from research on just 47 airlines, admittedly, the biggest, but how much money does the whole industry make from it? Three big US airlines, United, American and Delta each made over €1 billion from these add-ons which are called ancillary revenue. Ryanair made nearly €609 million and easyJet €540 million.
The amount of revenue that airlines make from these add-ons has just about doubled in two years. And what has happened is that price increases that would otherwise be stuck on a fare are hived off into an add-on. We’ve joked how Ryanair, in particular, might want to charge to use their toilets, breathe their air or sit on their seats but they are quite modest in comparison with some airlines. They only make 22% of all their revenue from add-ons. An airline called Allegiant in the US gets just over 29% of all of its revenue from add-ons. No doubt that annoys Ryanair’s their chief executive, David O’Leary, since they only came third! Jet2 was fourth earning 21% of all its revenue from add-ons and flybe, ninth, with 15.7%.
Previous research by the same team, Amadeus and IdeaWorks speculated that airlines could not generate more than 30% of their entire revenue from add-ons. Some are getting pretty close to that figure and all are gleefully jumping on the bandwagon. We passengers expect increases from time-to-time. We might moan bitterly but what we really object to is any sleight of hand in hiding them from us. If a fare is X we expect to pay X not twice X. From this report it sounds as though airlines may be getting cleverer and cleverer about hiding them. Or do I mean deceitful?

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