Low-cost airlines have profited due to additional services

Created on 28.09.2021 08:36

The travel consulting company has released an annual airline report, according to which some low-cost airlines have gained revenue from ancillary services. According to analysts, 2020 was the first year when four low-cost airlines at once received more profit from additional services than from tickets. These are the American Allegiant and Spirit, the Mexican VivaAerobus and the Hungarian Wizz Air, which was ranked the first in terms of these indicators, Tengritravel.kz writes with reference to IdeaWorksCompany.

Reportedly, the service of choosing a specific seat and fees for luggage were profitable. Approximately 90 percent of financial resources came from co-branded credit card programs (a type of plastic card, being as the aggregate bank offer or any large partner organization). Thus, airlines managed to get such revenue in 2020 thanks to co-branded credit cards when the coronavirus pandemic was raging around the world. Consumer charging activity has been increased and airlines have been able to establish good prices for miles or points sold to local card issuing banks.

However, revenue from additional services has been increased not only from low-cost carriers. A survey of the 75 largest commercial global airlines revealed that the percentage of additional services was accounted by 14.6 percent of total revenue over the past year. Ryanair topped a list in terms of absolute transaction volume, thereby increasing its revenues by $ 3.4 billion.

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