Idea Works Company, a consultancy in airline ancillary revenue, and Amadeus have today announced the results of the Amadeus Worldwide Estimate of Ancillary Revenue, which projects that airline ancillary revenue will reach US$36.1 billion worldwide in 2012, an 11.3% increase on 2011.
Earlier this year, Amadeus and Idea Works reported the ancillary revenue disclosed by 50 airlines for 2011. These statistics were applied to a larger list of 176 airlines to provide a truly global projection of ancillary revenue activity by the world’s airlines in 2012. The Amadeus Worldwide Estimate of Ancillary Revenue marks the third year that Amadeus and Idea Works have offered a projection of global ancillary revenue activity.
Ancillary revenue is generated by additional activities that yield revenue for airlines beyond the core movement of customers from A to B. These activities include: commissions gained for hotel bookings, the sale of frequent flyer miles to partners, and the provision of ‘à la carte services’, which provide increased consumer choice.
The estimates of ancillary revenue for the past three years, and their percentage of global airline revenue, are as follows:
2012: $36.1bn (5.4% of $667bn)
2011: $32.5bn (5.6% of $577bn)
2010: €22.6bn (4.8% of $474bn)
Holger Taubmann, Senior Vice President, Distribution, Amadeus, said: “It’s encouraging to see ancillary revenue growing at over 11% this year, which demonstrates the significant commercial potential for airlines. However, to capitalise on this, it is imperative that airlines adopt a multi-channel approach, accessing the opportunity presented by indirect travel agency sales of ancillary services.
“At Amadeus, helping airlines to benefit from the ancillary opportunity remains a top priority and we are now working with the 53 airlines that have chosen Amadeus Airline Ancillary Services to drive their ancillary revenue strategy.”
Julia Sattel, Senior Vice President, Airline IT, added: “To power the sale of ancillary services, it’s paramount that airlines adopt the Electronic Miscellaneous Document (EMD) that provides industry standardisation. Amadeus has been at the forefront of driving industry adoption of EMD, being the first global distributor to issue an EMD through the travel agency channel.
“We are committed to supporting our customers by deploying standards-based solutions that properly allow them to maximise the opportunity presented by ancillary services. In the first half of 2012, Amadeus issued 4.88 million EMDs. This is testament to the importance of ancillary services in driving revenues and supporting growth.”