Tourism Industry News

Airline information survey reveals bright beacon of hope for airline revenues

28/04/2009 17:31

PlaneAs airlines’ quarterly earnings reports become available this week, it’s clear, with the notable exceptions of Airtran and Allegiant Air, that there is not a lot of good news to go around. And while airline stocks continue their rise and fall in response to the latest market announcements and gloomy forecasts, there appears to be one growing beacon of hope for airlines’ profitability- ancillary revenues.

Even amidst the uncertainty and decrease in traffic, particularly lucrative business traffic, many carriers have reported significant increases in their ancillary revenue programs. Relatively new to the North American market, the concept of ancillary revenues has received some bad press and consumer backlash over the past 12 months - largely as a result of unfamiliarity and at times, poor implementation by the airlines. In spite of this, however, ancillary revenue programs are being implemented by more carriers at a time when their business model is rapidly changing, and the need for sustainable profits and growth is paramount.

In the US, where many consumers are resentful of paying for “extras”, a considerable amount of work is needed to change the perception of ancillary revenues.  To overcome this challenge, and addressing the need for more education and a better understanding of ancillary revenues and related a-la-carte fees, Airline Information  is bringing an industry forum to Miami on May 12-13, 2009, where executives from more than 50 airlines will gather to discuss this maturing segment.

 

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