An estimated of $44.6 billion was collected in passenger fees and commission in 2016 by the world’s largest airlines. Of this, the low cost airlines contributed nearly half of the amount of their total revenue from charges for bags, food entertainment and other extras.
According to a new study from airline consultant IdeaWorks Co., the 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 the same report, the $44.6 billion haul by 66 of the world’s biggest airlines was a 10% increase over 2015.
Post the great recession which affected the world economy badly nearly a decade ago, the airlines increasingly turned to the passenger fees, commissions and frequent flier program for generating a large slice of their revenue.
The IdeaWorks Company also said that the biggest world airlines generated an estimated 9.7% of their revenue from such fees in 2016 and the balance came for the airfares. That share has grown from 8.7% in 2015, according to the study.
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 Airlines (40%). For instance, Spirit Airlines asks for $2 to print a boarding pass at an airport kiosk and up to $50 to choose a seat.
