Ancillary revenue on top of airline ticket prices has soared by 1200 per cent in the last seven years to just on US$16 (NZ19.65) per passenger among airlines surveyed. That's more than double the global average of profit per passenger.

Consultancy IdeaWorks measured extra fees raked in by 59 airlines and found they had increased from US$2.45b in 2007 to $31.5b (NZ$36.6b) last year.

Across the industry last year airlines made just US$6 of profit per passenger, according to International Air Transport Association figures.

Fees range from bag fees to meals to seats with extra leg rooms and revenue gained through frequent flier schemes.


The survey in the 2014 CarTrawler Yearbook of Ancillary Revenue examined financial filings by 114 airlines around the world and found 59 of them disclose ancillary revenue.

Air New Zealand is among those airlines that don't but has ramped up extra charges in the past few years. On its website the airline lists optional charges for services including bags, seat select, fare hold, upgrades, Skycouch, twin seat, food and pre-booked inflight medical oxygen.

"As airlines search for every penny, peso, and pound, the a la carte methods used by global and low cost carriers are beginning to converge," the yearbook says.

The study finds Qantas is the most successful in loyalty marketing with approximately 80 per cent of its ancillary revenue associated with its loyalty business unit. The airline makes a point of emphasising bags, food, and drinks are included in its basic fares.

United Airlines tops the table in overall ancillary revenue of US$5.7 billion, followed by Delta and American Airlines. Qantas is ranked ninth with $1.27b of ancillary revenue.

Low cost carriers are far more dependent on charging for extras with Florida-based ultra-low cost carrier Spirit topping the table of ancillary revenue as a percentage of total revenue. More than a third of revenue comes from extras. In this region TigerAir makes 23 per cent out of ancillary charges, Jetstar 20 per cent and AirAsiaX 19.6 per cent.

Per passenger, British airline made the most per passenger - US$55 and through its frequent flier programme, Qantas made $45 per passenger.

The yearbook cites case studies including Hawaiian Airlines making $6.6 million from the sale of preferred seating last year and US airline Soutthwest making $195 million during 2013 from its EarlyBird check-in feature which provides earlier boarding and better access to overhead carry-on space.


Estimates of all airlines last year - including those not included in the survey put the ancillary revenue figure at at least US$36 billion.

Read the full IdeaWorks report here:

Extra revenue earners include:

Frequent flier programmes:

The frequent flier category largely consists of the sale of miles or points to program partners such as hotel chains and car rental companies, co-branded credit cards, online malls, retailers, and communication services. Sales of

miles or points made directly to program members also qualify.

A la carte features:

These represent the items on the ancillary revenue menu and consist of the amenities consumers can add to their air travel experience. The

list continues to grow and the following are typical activities: 1) onboard sales of food and beverages, 2) checking of baggage and excess baggage, 3) assigned seats or better seats such as exit rows, 4) call center support for reservations, 5) fees charged for purchases made with credit

or debit cards, 6) priority check - in and screening, 7) early boarding benefits, 8) onboard entertainment systems, and 9) wireless internet access.

Commission-based products:

Ancillary revenue activities also include the commissions earned by airlines on the sale of hotel accommodations, car rentals and travel insurance. The commission - based category primarily involves the airline's website, but it can include the sale of duty - free and consumer products onboard aircraft.

Advertising sold by the airline.

This category includes any advertising initiative linked to passenger travel. The following are typical activities: 1) revenue generated from the

inflight magazine, 2) advertising messages sold in or on aircraft, loading bridges, gate areas, and airport lounges, and 3) fee - based placement of consumer products and samples.