Extra Fees added $22 Billion to Airline Revenue in 2010

The Wall Street Journal is reporting that the 47 largest airlines in the world were able to add nearly $22 billion to their revenue streams in the form of additional fees added onto the cost of a plane ticket.

According to the study, 47 of the world’s biggest airlines, which together account for almost half of all airline revenue, last year reported ancillary sales of €15.11 billion, up 38% from 2009. Other carriers surveyed didn’t specify how much passenger revenue they get from sources other than fares.

In dollar terms, the increase last year was about 60% amid the dollar’s devaluation from 2009, when the figure was $13.47 billion.

Leading the pack were budget airlines who offer cheap tickets with few amenities. Passengers can purchase these amenities such as snacks, in-flight entertainment, priority boarding, etc. for an additional cost. Las Vegas-based Allegiant Air led all airlines with 29.2% of total revenue coming from add-on fees. Familiar names in the top ten include Ryanair, Spirit, and easyjet.

United Continental was the only “legacy “carrier” in the top ten with 14.7% of revenue coming from add-on fees.

For the most part, add-on fees have been successful for both airlines and customers. For passengers, it means you can generally get an inexpensive plane ticket if you are flexible and flying without much luggage but it also means that travelers who require additional services such as families or travelers going on long vacations, are often at the mercy of seemingly endless fees.

Add-on fees are a relatively new aspect of air travel, accounting for only $2.5 billion in revenue in 2007. But with increased costs and rising fuel prices, it seems that the future will only bring new, creative fees that allow passengers to score cheap tickets while forcing them to pay for pretty much everything that goes beyond just sitting in your seat and not touching anything…

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One Response to Extra Fees added $22 Billion to Airline Revenue in 2010

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