Ancillary Revenue

Driving revenue through enhanced choice

Although ancillary revenue has historically been associated with the a la carte pricing of LCCs, it has become increasingly important to full service airlines.

Ancillary revenue is big business: fifty world airlines reported ancillary revenue income of $22 billion in 2011 for products and services ranging from checked bags and extra legroom to co-branded credit cards.

The leaders in the category report ancillary revenue that are 20-30% of gross turnover.

For some, the revenues from ancillary revenue are the difference between running a profitable or loss making business.

The key evolution in the last five years has been the development of an offer that meets the needs of the price sensitive customer through a la carte pricing to segmented solutions that allow higher value customers to trade up through fare families and loyalty. In that sense, those airlines that have adopted ancillary revenue have been able to develop better 1-1 relationships with their key customers.

Nevertheless we find a number of airlines struggle to execute because:

  • They don’t know who their most valued customers are
  • The culture around an ancillary revenue program requires fresh thinking that is often at odds with the way the airline normally conducts business
  • The implementing airline struggles to build contracting relationships with new vendors

Find out more about ancillary revenue can help you upsell and develop better customer relationships.

Our Team

SG crop

Sudeep specialises in airline start-up, corporate strategy and commercial performance improvement. He focuses on start up planning and meeting revenue … More

Athena Aviation makes a difference by deploying a team of experts that have designed and delivered award winning brands.