Airlines pocketed $44.6 billion in passenger fees, frequent flier revenues and commissions in 2016
The world’s biggest airlines collected an estimated $44.6 billion in passenger fees and commissions last year, with some low-cost airlines generating nearly half of their total revenue from charges for bags, food entertainment and other extras.
Airlines around the world are making more and more money from fees, frequent flier programs and commissions for directing passengers to hotels and car rental companies, according to a new study from airline consultant IdeaWorks Co.
The $44.6 billion haul by 66 of the world’s biggest airlines was a 10% increase over 2015, according to the report.
Since the Great Recession nearly 10 years ago, airlines have increasingly turned to passenger fees, commissions and frequent flier programs to generate a bigger slice of their revenue.
The biggest airlines generated an estimated 9.7% of their revenue from such fees in 2016, with the balance coming from fares. That share has grown from 8.7% in 2015, according to IdeaWorks Company.
Low-cost carriers derived an even bigger share of their overall revenues from fees and commissions. For Spirit Airlines it was 46.4%, followed by Frontier Airlines (42.4%) and Allegiant Air (40%), the report said.
Spirit, for example, charges for nearly 40 different extras, such as $2 to print a boarding pass at an airport kiosk and up to $50 to choose a seat.
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