Feb 19, 2019
CarTrawler Global Estimate of a la Carte Revenue yields regional details from the worldwide total of $57 billion.
Dublin, Ireland & Shorewood, Wisconsin, 20 February 2018: IdeaWorksCompany, the foremost consultancy on airline ancillary revenues, and CarTrawler, the leading technology platform providing full end to end transport solutions for online businesses, recently estimated airline a la carte revenue at $57 billion worldwide for 2017. The CarTrawler Global Statistics of a la Carte Revenue adds regional details, comparisons to 2010 numbers, and a first-ever baggage revenue estimate, to the ancillary revenue figures in the earlier November 2017 press release.
Each year IdeaWorksCompany, through the sponsorship of CarTrawler, analyzes the ancillary revenue disclosures for airlines all over the world. These results are applied to a larger list of carriers (which numbered 184 for 2017) to estimate ancillary revenue activity for the world’s airlines. A la carte activity is a significant component of ancillary revenue and consists of the amenities consumers can add to their air travel experience. These include fees paid for checked baggage, assigned seats, buy-on-board meals, early boarding, and onboard entertainment. Of these, the revenue from checked baggage looms large with $23.6 billion in estimated sales for 2017.
Aileen McCormack, Chief Commercial Officer at CarTrawler
The 2017 Global Regions Snapshot table further demonstrates how a la carte activity varies by region. The prevalence of low cost carriers in a region actually drives the level of ancillary revenue; a higher concentration of low cost carriers (LCCs) boosts ancillary revenue and a la carte results.
“Big things have small beginnings” is a quote from the classic movie Lawrence of Arabia. These words of wisdom clearly apply to the growth of a la carte revenue. What once was largely absent from Africa, Latin America, and the Middle East, has grown more than threefold to be a global revenue phenomenon that touches every region of the world. It most certainly is led by low cost carriers, but now is relied upon by traditional airlines in search of more revenue. Within every region, the transformation has been strikingly similar. Traditional airlines are compelled to match the pricing strategies of their LCC competitors. This begins within the region on shorter routes, and in the most developed regions, also becomes a factor for long-haul flights.
IdeaWorksCompany predicts the world will eventually match the results produced by Europe. Global low cost carriers will achieve an operating revenue share in excess of 25% and a la carte activity will represent 10% of overall revenue. This is indeed a “big thing” which delivers an array of choices for consumers. Many more travelers in Asia, Africa, and South America will enjoy a newfound ability to choose the maximum savings of a basic fare product or more comfort and convenience from an a la carte menu. Business models are changing and only the most skilled of airline retailers will flourish in this rapidly evolving environment.
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