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Qantas is world's best at charging for extras

Thursday, 19 September 20133 min read

Qantas has topped a league table detailing how much airlines make from charging passengers for an array of extra services, often those connected to comfort and convenience.

Qantas received an average of US$56.2 per passenger in extras alone in 2012, industry figures reveal.

Others who boosted revenue from extra paid-for services included AirAsiaX (US$46.3 per passenger), Korean Air (US$30.9), Virgin Atlantic (US$30.4) and Jetstar (US$29.6).

In the case of Jetstar, ancillary revenue accounted for 18.6% of the airline’s total revenue.

The first report on ancillary revenue was issued in 2008 with only 23 airlines worldwide disclosing ancillary revenue activity in financial filings, and the result was a modest US$2.4 billion.

Once largely limited to low fare airlines, ancillary revenue has now become a financial necessity for airlines all over the globe.

Qantas and Virgin Atlantic accomplish this task largely through the sale of frequent flier points or miles to programme partners.

Today, 53 airlines disclose ancillary revenue activity of US$27.1 billion. This represents a more than doubling (101% increase) of the ancillary revenue of $13.4 billion from 2009.

Researcher IdeaWorks Company said: "Carriers worldwide rely upon the revenue from frequent flier activities, a la carte features, and commission-based products, to create profits in an era of high fuel costs while keeping fares modest in a recession-weary world."