Traveling by plane or traveling has become an important part of the lives of many people on our planet. Every day, thousands and even tens of thousands of planes carrying millions of people take off and land from airports. For the airline, any customer is a person who has money and wants his flight to be the most comfortable – and carriers come up with features that simplify the journey, but for this the passenger will have to pay extra.
The sale of additional options brings airlines billions of dollars every year, but there are those firms that managed to earn especially much in this area.
Who earned more?
According to analysis by IdeaWorks, United Airlines in 2015 earned the largest amount on services not included in the ticket price - it reached $ 6.2 billion. Similar results were shown by other air carriers in the United States - American Airlines earned $ 4.7 billion, and Delta Airlines - $ 3.8 billion. However, this is not surprising, given that baggage fees or paid calls to the call center have long been the norm in the US.
Interestingly, the list of leaders in revenues that are not included in the cost of the air ticket includes budget carriers. Ryanair ranked sixth with $1.7 billion and EasyJet eighth with $1.46 billion. The list of airlines with the largest non-ticket revenue also includes Air France/KLM ($2.2 billion), Southwest Airlines ($2.1 billion), Lufthansa ($1.49 billion), Qantas ($1.2 billion) and Alaska Airlines ($1.1 billion).
Payment for everything
An interesting fact is that some airlines use a business model based on the collection of additional payments. For example, Spirit Airlines earned 43.4% of its revenues in 2015 from various fees, including fees for hand luggage, baggage fees and the sale of beverages and food. This means that the airline made significant profits thanks to additional fees. The cost of baggage drop-off from this company varies from $ 30 to $ 50, and the fee for hand luggage ranges from $ 35 to $ 100, depending on the payment method. Additional services also include seat selection fees and online bookings. On average, each passenger brings the airline almost $ 52 of additional income on top of the ticket price.
This business model is typical of low-cost airlines: for example, Wizz Air, which received 36% of its revenue from fees for luggage and additional services, and Ryanair, which has this figure of 24%. Even printing a boarding pass from these airlines costs money and can be almost more expensive than the cost of the ticket itself!
According to IdeaWorks, in 2015, the top 10 airlines by revenue, not including ticket prices, were as follows:
- Spirit Airlines – 43.4%,
- Allegiant Air — 37.6%,
- Wizz Air — 36.4%,
- Jet2.com — 29.4%,
- Ryanair — 24%,
- Volaris — 22.3%,
- Jetstar Airways — 21.3%,
- Flybe — 21.2%,
- Tigerair — 20.8% and
- Alaska Airlines — 19.5%.
Passengers who fly frequently can be satisfied with this business model, as they can choose only the additional services they need and not pay for unnecessary ones. However, passengers who rarely fly and are accustomed to the fact that the ticket price includes food on board and luggage space may not be satisfied, since they have to get acquainted with the cost of each option separately.
Airlines always strive to meet the changing needs of passengers and change their conditions and fare plans accordingly. For example, S7 last year completely revised its tariff scale to offer more flexible and attractive prices to its customers. Prices for flights were significantly reduced, due to the fact that the airline excluded from the total cost of the flight additional services, such as luggage, for which you will have to pay extra.
Such a change in fares allows passengers to choose only the necessary additional services, and save on those that they do not need. Of course, this can be inconvenient for some passengers who are used to buying a full range of services included in the ticket price, but it gives great flexibility and the possibility of savings for those who are ready to independently regulate their spending on additional services.
