A new report released on Monday has shown that this year, the world’s airways will earn approximately $37.3 billion in ancillary revenues. The Amadeus Worldwide Estimate of Ancillary Revenues computes the aggregate as a 12.4 percent increment from the $33.6 billion that was collected in 2011 by the aviation industry. Holger Taubmann, the senior vice president, distribution for Amadeus said it was encouraging to see ancillary revenue going up more than 12 percent this year, which exhibits a considerable commercial potential for airways.
Naturally, most travelers are likely to be dismal on hearing this news. George Hobica of AirfareWatchdog.com said that at some point when airways were making losses, travelers sympathized with them; however, given that they are now making profits, there is going to be less empathy. According to the report, majority of the profoundly fee-dependent airways, such as AirAsia, easyJet and Spirit have posted huge gains, called the Ancillary Revenue Champs. The report has further indicated that the aforementioned airways are expected to gain additional revenue of $6.7 billion this year, which is a 31 percent increase more than the gains seen in 2011. In contrast, the Low Cost Carriers types of airways such as Southwest, JetBlue and GOL will gross $6.4 billion, which is a 14 percent increase more than what was seen the year before.
In spite of this, those numbers are still less compared to those in the U.S. Major Carriers group. The report states that only six airways will earn $13.5 billion this year. That signifies a 0.91 percent decline from 2011; however, even now it accounts for nearly 37 percent of the world’s sum total. As a matter of fact, this figure would probably have been higher, says the report, but Delta at present, omits revenues from a number of aviation businesses from its report. Importantly, one thing to observe is that this numbers in the report are not tantamount with commuters’ out-of-pocket expenditure. They also include revenues earned by the airways through selling miles, credit card companies and other corporate partners that would like to link to their loyalty plans. For leading U.S. airways, those revenues are alleged to be over $8 billion.
That provides little relief to commuters who are still faced with new ways to pay fees. Airways such as Delta, US Airways and American began to charge a fee for select window and aisle seats in June. Virgin American began to charge $21 for the first few rows of seats of the main cabin. These seats do not have extra legroom; however, if you board early, you are likely to find space in the overhead bins. The question is; are commuters facing additional fees? Jay Sorensen, president of IdeaWorks, which wrote the report, said that this was a possibility. More so when systems are setup to allow third party websites and travel agencies to display them. Notably, Amadeus is a major Global Distribution System, which supplies the technology that at present allows such sites to show airfares.
Sorensen went on to say that the next flood of activity will happen when the selling of optional extras, turns out to be widespread in the computerized booking systems used by travel agencies. He said that airways were likely to be better retailers through all distribution channels within the next four years. Conversely, Hobica believes that the airways’ present flow of profits will ease the pressure to implement new charges or hike existing ones. He told NBC News that so long as airways are making money, they will not get greedy. However, if fuel prices were to go up, there is a high likelihood that the airfares will also go up.
Singapore | Bangkok | Tianjin | Sydney | Gold Coast | Tokyo | Hong Kong |
| Scoot Flights | News | Privacy | Destination Booking