Checked baggage, seat booking, food. Many airline costs are now incremental and bring significant additional revenue to the companies. A study shows which airlines make extra money apart from the ticket business. Looking for additional sources of revenue, airlines are becoming more innovative. This is revealed by a study by consulting firm Ideaworks.
The 73 airlines surveyed worldwide generated additional business of $47.2 billion (€40.4 billion) from ticket sales. This is one-tenth of their total income.
In addition to the major North American carriers, European Ryanair, Air France, Lufthansa or easyJet are among the top 10 companies in the world for extra fees according to the study. Especially regarding baggage checking.
This also applies to Ryanair, the largest European budget airline. From 1 November you can only carry one small bag on board the company’s aircraft for free. Earlier it was possible to carry a suitcase on wheels. It now costs €8 to charge the trolley or you book €2 less for “priority boarding” and can bring two pieces of luggage into the cabin as before.
Ryanair has reduced baggage charges over the years, but at the same time increased revenue from seat reservations, rental cars and rooms. Even without its frequent flyer program, the company grew its additional fees revenue by 13 percent to 2.02 billion euros, reports a study by mobility service provider CarTrawler. This was 28.2 percent of the total revenue. Competitor EasyJet makes up 19.5% of revenue with additional revenue. Meanwhile the Lufthansa Group comes in at just under 6 percent.
According to Ryanair, the company does not expect any additional revenue due to the new baggage charges. “We’ve seen in recent weeks that many people now book a suitcase for 8 or 10 euros instead of 25 euros,” said head of marketing Kevini Jacobs. The reason for the new fee is not to charge more money but to avoid delays.
The fact that cabin trolleys are now increasingly being handed out at the check-in counter rather than at the gate as before, makes Ryanair flights more punctual. Previously, a flood of small trolleys at the gate cost the airline twelve minutes or more per flight.