Airline Ancillary Revenue Reaches $462 Billion in 2021
The 2022 CarTrawler Yearbook of Ancillary Revenue shows ancillary revenue performance for top 75 airlines globally.
The 2022 CarTrawler Yearbook of Ancillary Revenue published by IdeasWorksCompany, is a comprehensive analysis of the ancillary revenue performance of 75 global airlines. Released this week, the report breaks down ancillary revenue performance from 2019 to 2021, investigates how airlines have recovered since the pandemic, the new or expanded ancillary products they’ve introduced to accommodate changing customer needs and behaviours, and much more.
Responding to a crisis
The airline industry has certainly had a tough time over the last two years, and the aftershocks are not over yet, with staff shortages due to illness still impacting travel. However, there has been strong recovery, thanks in part to the airlines’ ability to pivot and respond not only to changing mandates, but to changing customer needs and behaviour.
Ancillary products and their revenue have been a key driver of the airlines’ path to recovery, and The 2022 CarTrawler Yearbook of Ancillary Revenue shows promising results from the 75 airlines covered. Due to the pandemic, the yearbook is comparing 2021 to 2019 rather than 2020, to give a more accurate view of ancillary revenue performance after the pandemic.
Recovery is happening
In 2019, the global estimate of ancillary revenue was $840 billion. In 2021, that estimate is $462 billion – a significant decrease – although still a 32% increase on 2020’s performance ($350 billion), showing strong recovery, despite ongoing obstacles. While some markets (Asia and the South Pacific) are still not travelling at the same rate as pre-pandemic, most markets have shown strong travel increases from 2020, with MENA at 102% YOY in 2021, Europe at 84.3% YOY and North America at 79% YOY.
Key highlights
Many airlines saw significant increases in ancillary revenue from 2019 to 2021, including Wizz Air, the top performing airline whose ancillary revenue accounts for 56% of total revenue, an increase of 10 percentage points from 2019. Please see article here to learn more about Wizz Air’s ancillary revenue.
All carrier categories saw their ancillary revenue increase from 2019 to 2021 with low cost carriers seeing the highest increase at 36.3%.
Ancillary revenue per passenger also increased significantly with the top performer, HK Express, now having a per passenger revenue of $88.21 – an increase of $60.36 from 2019.
Frequent fliers
The five largest US airlines (Alaska, American Delta, Southwest, and United) generated $16.4 billion from their frequent flyer programs in 2021 – down from $19.5 billion in 2019, however, when this revenue was measured on a per-passenger basis, the result for 2021 was $30.88 per passenger up from $25.71, a 20.1% increase. This shows passengers may be flying less, but spending more.
Changes to increase conversion
Airlines have continued to optimise their ancillary products to drive conversion, and accommodate changing customer needs and behaviours, following two years of very little travel. Some expanded product offerings include large carry-on fees, extra legroom zones, subscription-based benefits, price freeze, and prepaid change flexibility.
To see a complete breakdown of 75 airlines’ ancillary revenue performance in 2021, insights into how to better optimise products to increase conversion, changes that airlines have made or are planning to make to their products and much more, download
Article by CarTrawler
