Airline revenues generated from the sale of ancillaries is forecast to jump once again according to new research from the IdeaWorksCompany.
In its annual survey of revenues from extras, carried out with the support of CarTrawler, the company said it expected airline-generated ancillaries to rise to $82.2 billion for 2017, up 22% from 2016's figure of $67.4 billion. Revenue from ancillaries has more than doubled in the past five years, as shown in this week's chart below.
More than two-thirds of ancillary revenues are from a la carte activities, including baggage fees, on-board food and on-board WiFi. The remainder is made of up of elements such as the sale of frequent flyer miles and other travel services, such as hotels and insurance. The breakdown of ancillary revenue for the year is shown below.
The proportion of revenues generated by fees associated with baggage has increased from 25% to 27% of the total.
The huge rise in revenues is likely to mean that the pressure to adopt initiatives which promise better distribution of ancillaries, such as IATA's NDC, is certain to increase.
Last Thursday, HRG became the first major global travel management company to be certified at Level 3 under the new advanced 17.2 standard.
Bill Brindle, HRG's chief operating officer, said of the announcement, "Buyers want more choice. Sellers want more channels to market. Everyone wants more innovation - and new ways of delivering value. This is a significant period of change. New technology, new - all delivered in a new digital world for the customer."