Ancillary Earnings In The Airline Industry Going Up The Roof

Posted on August 23rd, 2012 by in Aviation News

Even though the airline industry has been having a bit of a tough time lately with all the air fare increases and some fall in demand, it appears that the industry has still managed to find a saving factor. The money the industry is making from sources other than fares has increased significantly to about 66%. Approximately €18.23 billion were made last year alone with prospects looking brighter than ever for this year.

This report and analysis has been made public by a firm called IdeaWorksCompany who had made it its business to know the financial workings of the airline industry and also to find out where the revenue is coming from. Another firm Amadeus which is a processor for the tourism industry and such has also contributed to the compiling of the report. The report has been made with the help of over 108 airlines all over the globe and some 50 of them had agreed to give information about the extra sources of revenue they had discovered.

In 2009 the recorded ancillary earning was about €10.95 billion but that has taken a leap of 66% this year and that is expected to rise. Southwest has managed to earn about €949,900,000 with United Continental earning €4,162,655,000. Several other airlines have also reported an increase in this kind of earning and that is welcome news for all.

An analyst from StrategicAero Research called Saj Ahmad has chalked up quite a few reasons for this current trend that is benefitting many major airlines. He is of the opinion that some creativity and innovation has taken place in the industry and the prices have been carefully considered by the airlines. Recently airlines are really thinking about how to most effectively cut down essential fuel and labor costs.

Airlines are building upon the idea that there should be fuel surcharges on airplane fares and on-board services should be charged to a certain extent. They think that baggage charges should also be slightly increased. Whatever the charges might be depends largely on which airline the passenger is travelling through. In the case of cheaper, budget airlines, it has been noted that they are making extra money off of offering services that are not readily supplied elsewhere and which are considerably unique.