As travel industry professionals, there’s no doubt you already know the answer to the question above. But do you know exactly how much their making from ancillary charges?
It’s enough to have low-cost carriers practically surviving off them, and the last few years has even seen premium airlines adopt extra charges as a means of making up financial losses in competitive markets.
According to the US Department of Transportation, US airlines are earning billions from fees on checked bags and reservation charges.
Last year, carriers collected over $3.5 million in bag fees alone – that’s a five percent increase over 2013.
There was also a six percent jump in reservation-change fees to $3 billion.
The transportation bureau said ancillary charges have been climbing steadily since 2008, when a hike in fuel prices forced airlines to find alternative means of making money.
A report compiled by US consultancy IdeaWorks Company found Jetstar received 20.6 percent of its revenue from checked baggage and onboard meals in 2013.
This was up 18.6 percent on 2012 and 15.3 percent in 2011.
Overall, the airline earned $31.60 per passenger in ancillary revenue.
Virgin Australia’s budget offshoot, Tigerair is believed to have a similar financial structure, although it’s yet to reveal earnings.
However, the carrier’s recent change in carry-on baggage allowance could soon see Tigerair earning more in ancillary charges.
In March, the no-frills carrier reduced its carry-on maximum from 10 kilograms to seven. Read on
Meanwhile, US airline, Spirit Airlines makes some of the largest earnings from revenues – with 63 percent of its money coming from baggage and onboard meals.
