The 2024 edition of the CarTrawler Yearbook of Ancillary Revenue by IdeaWorksCompany, released today, describes ancillary revenue activities and results for 68 airlines in 2023, revealing divergences in trends and providing an assessment of the industry as a whole. Key findings include:
LCCs post record-breaking performance: Spirit Airlines achieved ancillary revenue of 56.4% of total revenue, which is a global record. Ancillary revenue for Jet2.com was $95.83 per passenger, which represents another global record. Ancillary revenue surges above pre-pandemic levels: For 2023 the top 10 airline companies generated $54.1 billion, which is far in excess of the $38.4 billion result for the top 10 companies for the pre-pandemic year of 2019. Traditional airlines were challenged: Total ancillary revenue was up for the category, but declined on a per passenger basis. Other revenue, which includes passenger fares, declined by a larger amount, which hints at competitive troubles. Frequent flyer program revenue jumped: Total loyalty revenue for the top 10 programs was $32.2 billion, which was 18.6 % higher than 2022. United Airlines sets new ancillary revenue record: United reported $9.5 billion in ancillary revenue, a record 20.9% increase from 2022, although its per-passenger increase was a modest 6.2%, with loyalty revenue representing 58% of total ancillary revenue.
While total ancillary revenue for the top 10 airlines surpassed pre-pandemic levels by over 41%, the report highlights the changing fortunes among air carriers. LCCs, which have a good share of their income powered by fees associated with optional extras, enjoyed solid gains on a per passenger basis. Traditional airlines have an advantage to boost ancillary revenue through their loyalty programs and co-branded credit card portfolios. Carriers in every category can become even better travel retailers, if they create destination-oriented websites that divert consumers from online competitors and airlines that rely upon a travel-as-a-commodity approach.
“The 2024 CarTrawler Yearbook of Ancillary Revenue offers a compelling insight into
a dynamic and competitive market landscape. While we’re seeing ancillary revenue
continue to grow overall, it’s clear that airlines need to adopt a renewed strategy
focused on value-added services to thrive in the face of intense competition," said
Aileen McCormack, Chief Commercial Officer at CarTrawler.
"One notable trend we’re observing, and a key to unlocking further growth, is the
enhancement of loyalty programs, which are already generating billions in revenue
for major US airlines. At CarTrawler, we support the world’s leading brands in travel
to enhance their loyalty offerings by providing a dynamic car rental loyalty
proposition tailored to our partners' needs. We currently power car rental loyalty for
21 partners, including United Airlines, Air France KLM, Wizz Air and Emirates.
Loyalty is a core focus for CarTrawler, as we continue to invest and enhance our
proposition to help our partners unlock their full potential in a competitive landscape.”
Of the 68 airlines in this Yearbook, 57 were included in last year's edition, allowing
for direct comparisons. The following table shows the per-passenger changes in
"total ancillary revenue" and "all other revenue." The latter is a new metric
representing the majority of revenue from sources such as passenger tickets, cargo,
and services sold to other airlines, including maintenance and ground handling.
CarTrawler is the leading global B2B provider of car rental and mobility solutions to the travel industry. Recognised for its innovative technology solutions, CarTrawler is the partner of choice for the world’s leading travel brands, enabling them to offer car rental, airport transfer and ride-hailing services to their customers.
