Airlines, apart from a lucky few, have often found profitability to be elusive. Even in good years, margins have been relatively thin. This is why fees for ancillary services, things such as priority seating and baggage which were previously included in the base fare but are now charged as optional extras, have been heartily embraced.
Over the past eight years, market researchers IdeaWorksCompany has analysed the revenues that airlines generate from a range of these ancillaries, including onboard food and beverage, commissions earned from selling other travel services such as hotels, inflight magazine sales as well as the sale of frequent flyer points.
In 2007, it found that the 23 airlines it analysed posted ancillary revenues of US$2.45 billion. In 2014, it says that 63 airlines generated some $38.1 billion.
The research finds that airlines in the US are generating most of these revenues, some 56%, compared with 29% in Europe and Russia and 14% in Asia Pacific.
Our chart this week shows the average ancillary revenue per passenger and the percentage of total revenues that a selection of European carriers makes.
Continued after chart*IdeaWorksCompany estimates
It is clear that so-called low-cost carriers generate proportionally more of their revenues from ancillaries than legacy airlines.
What is also interesting, though, is that legacy airlines are still earning significant revenues on a per-passenger basis. Air France-KLM, for example, makes an average $26.40 per passenger.
Air France-KLM and Ryanair generate the most in absolute terms from ancillaries, around $2 billion each in 2014.