News

CarTrawler Estimates Global Baggage Fee Revenue at €25.2bn

CarTrawler Estimates Global Baggage Fee Revenue at €25.2bn

IdeaWorksCompany, a consultant  on airline ancillary revenues, and CarTrawler, the  technology platform providing transport solutions for online businesses, recently estimated airline ancillary revenue at €83.5 billion worldwide for 2018.  This CarTrawler Global Estimate of Baggage Fee Revenue identifies baggage as a €25.2 billion component and provides a worldwide summary of baggage fee policies for 20 top airlines.

Each year IdeaWorksCompany, through the sponsorship of CarTrawler, analyses the ancillary revenue disclosures for airlines all over the world. These results are applied to a larger list of carriers (which numbered 175 for 2018) to estimate ancillary revenue activity for the world’s airlines. Baggage activity for each category of airline is added to this analysis to calculate a global estimate. It is a significant component of ancillary revenue and consists of three primary sources: checked baggage in the aircraft belly, added fees for heavy and extra-large bags, and, for some airlines, the price charged for larger carry-on bags.

CarTrawler Global Estimate of Baggage Fee Revenue
 201820172014
Baggage Fee Revenue$28.1 billion$23.6 billion$13.4 billion
As a % of

Global Airline Revenue

3.2%3.0%1.8%
Source: A la carte revenue statistics derived by IdeaWorksCompany from 2017, 2016, and 2013 airline results, combined with IATA annual airline revenue projections for 2018, 2017, and 2014.

 

Stringent baggage fee policies are hallmarks of top revenue-performing low-cost carriers. The surprising development within the past two years is the implementation of bag fees by some of the world’s leading global network airlines.

“The value of airlines’ a la carte revenue, or optional extras that customers can add to their basic airline fares, has risen dramatically in recent years, growing by 128% between 2014 and 2018,” said Aileen McCormack, CarTrawler’s Chief Commercial Officer. “So it is no surprise that baggage fee revenue has grown by a similarly huge margin, in terms of monetary value and as a percentage of overall global airline revenue. This overall trend reflects traditional airlines’ strategy of embracing a la carte revenue alongside low-cost providers, offering customers the best-value solutions in a transformed marketplace.”

The other half have implemented bag fees on a portion or the entirety of their route network. When these airlines are organised by global region, it is easier to see the policy groupings that currently exist. The abundant reliance on bag fees in Europe and North America occurs largely due to the presence of a very significant low-cost carrier industry. Elsewhere in the world, traditional airlines include baggage benefits for all fares and have not yet adopted basic economy fare strategies.

Click to add a comment

Leave a Reply

Your email address will not be published. Required fields are marked *

News

Michael Flood is the Editor of Ireland's leading travel industry publication, Irish Travel Trade News. With more than 35 years experience, he has accumulated an in-depth knowledge of the airline industry and the travel and tourism world.

More in News

Croatia is open for Irish visitors

Michael FloodJuly 3, 2020

Emirates clears nearly 650,000 refund requests

Michael FloodJuly 3, 2020

Spain is ready to welcome Irish visitors

Michael FloodJuly 2, 2020

Malta Launches Online Reopening Course

Michael FloodJuly 2, 2020

Elounda Beach Hotel & Villas introduces Elounda Safe Stay Programme

Michael FloodJuly 2, 2020

Isle of Man Steam Packet Company reflects on 190 year history

Michael FloodJuly 2, 2020

Philippines Travel Survey Reveals Post-Covid-19 Travel Attitudes

Neil SteedmanJuly 2, 2020

Intrepid Travel Introduces 14 New Intrepid Retreats

Neil SteedmanJuly 2, 2020

G Adventures Launches ‘Travel with Confidence Plus Collection’

Neil SteedmanJuly 1, 2020

Copyright © 2019 Belgrave Group Limited, C4 Nutgrove Office Park, Nutgrove Avenue, Rathfarnham, Dublin 14, Ireland