U.S. airlines bring in more revenue from fees for bags and other products and services than do the world’s other carriers, a new report released today reveals.
United, Delta and American finished in the top three — each generating billions in ancillary revenue outside airfares last year, according to the report by IdeaWorks, a consultant specializing in ancillary revenue and brand development.
The report analyzed financial filings of 50 airlines worldwide and found they combined to bring in $22.6 billion of ancillary revenue last year.
That’s a 66% increase from ancillary revenue reported by 47 airlines two years ago.
“It’s clear that airlines recognize the importance of ancillary revenue and are developing increasingly innovative ways to generate it,” says IdeaWorks President Jay Sorensen.
Many airline passengers, though, are annoyed at buying a ticket and paying extra for services and products that once were free. The extra fees initially were charged by low-fare carriers but have now become a priority for all airlines — and essential for their profitability.