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 Wizz Air and worse than Ryanair for extras

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MesajSubiect: Wizz Air and worse than Ryanair for extras   Mier 23 Iul 2014, 10:11

Titlu: Wizz Air and worse than Ryanair for extras
Autor: Oliver Smith
Data: 21.07.2014

Citat :

Airlines around the world collected at least £31.5 billion in extra charges last year, a new study has shown, an increase of more than £4 billion on last year’s figure, and up 1,200 per cent since 2007.

The report, by the consultancy IdeaWorks Company, examined “ancillary” revenue – baggage charges, car hire commission, sales of in-flight food and drink and so forth – at 59 major airlines.

It found that Spirit Airlines is more reliant on extras than any other airline. Ancillary sources account for 38.4 per cent of total revenue at the Florida-based carrier, one of a handful around the world that charge for carry-on luggage. Spirit’s optional charges include a $26 fee for carry-on bags (this increases to $36 if added to the booking during online check-in, or $100 at the airport gate); $21 for a checked bag (rising to $31-$100); between $5-$12 for seat selection. It also adds a "passenger usage fee" of $8.99 to $16.99 to all bookings made online.
Spirit Airlines - ancillary revenue sources
43% - checked and cabin baggage fees
30% - "passenger usage" charge
9% - advance seat selection
5% - sale of FPP miles
13% - other

Another carrier that charges for hand luggage – Wizz Air – came second in the table. It earns 34.9 per cent of its total revenue through extras. Perhaps surprisingly, Ryanair - once the industry leader - was only fifth, behind Las Vegas-based Allegiant Air and EasyJet, meanwhile, came ninth.

Also in the top 10 were Singapore-based Tigerair; Jetstar, headquartered in Melbourne; and AirAsia, based in Kuala Lumpur.

The study found that the average passenger pays $16 (£9.36) in extra charges each time they fly. passengers pay the most, on average, forking out $55.61 (£32.56).

The first Ancillary Revenue report, published in 2008, taking into account financial results from the previous year, illustrates just how eagerly airlines have been embracing extra charges in recent years. Back in 2007, ancillary sources accounted for more than 10 per cent of total revenue at only three airlines – Ryanair, Vueling and Allegiant. Now, extras make up more than a tenth of total income at the majority of carriers.

Top 10 airlines: ancillary revenue as a % of total revenue

1. Spirit 38.4%
2. Wizz Air 34.9%  
3. Allegiant 32.6%  
4. 27.7%  
5. Ryanair 24.8%  
6. Tigerair 23.6%
7. Jetstar 20.6%  
8. AirAsiaX 19.6%  
9. easyJet 19.2%
10.AirAsia Group 17.6%

1. Ryanair 16.2%
2. Vueling 14.2%
3. Allegiant 12.8%
4. Air Deccan 9%
5. easyJet 8.8%
6. AirAsia 6.8%
7. SkyEurope 6.8%
8. Alaska Air Group 5.8%
9. Aer Lingus 4.2%
10. WestJet 4.2%

The report states: "Michael O’Leary, the outspoken CEO of Ryanair, once mused, 'The other airlines are asking how they can put up fares. We are asking how we could get rid of them'. His idea was to rely upon ancillary revenue as a replacement for passenger fares. The carrier slipped to 5th place for 2013. Leadership of the ancillary revenue revolution is now held by Spirit, Wizz Air, and Allegiant. These carriers have broken the 30 per cent threshold that may forever elude Mr. O’Leary.

"Spirit Airlines earns its top listing through aggressiveness. The airline is proud of its ability to deliver ultra-low fares for consumers, and equally proud of pushing the limit on fees. It introduced the idea of charging fees for large carry-on bags in 2010.
How airline extras have soared: total ancilliary revenue
2013 - $31.5 billion (59 airlines)
2012 - $27.1 billion (53 airlines)
2011 - $22.6 billion (50 airlines)
2010 - $21.5 billion (47 airlines)
2009 - $13.47 billion (47 airlines)
2008 - $10.25 billion (35 airlines)
2007 - $2.45 billion (23 airlines)

"As airlines search for every penny, peso, and pound, the a la carte methods used by global and low cost carriers are beginning to converge. British Airways, the very icon of airline civility, now has seat assignment fees for many travelers and bag fees for some fares within Europe. The airline disclosed in its 2013 annual report revenue of £40 million ($68 million) from seat assignment fees and approximately £45 million ($77 million) from checked baggage."
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