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Airlines set to make £62 billion from excess charges in 2017

Airlines are set rake in £62 billion from baggage fess and numerous other additional charges, such as seat selection and on-board food, in 2017, according to a new report.

The research – compiled by the US-based IdeaWorksCompany – shows that the level of revenue has tripled since 2010, when airlines made just £17 billion from additional charges.

Just over 25% of the extra charges were for baggage fess, while on-board sales and frequent flier programmes were other streams of revenue.

Even traditional airlines, such as British Airways – who now charge for food on some flights as well as additional legroom – have all seen an increase in additional revenue.

“With few exceptions, airlines all over the world are moving to a la carte methods to provide more choices for consumers while boosting ancillary revenue,” read the report.

It is also predicted that major US airlines, including United, Alaskan and American, could make £18.3 billion, while low cost carrier easyJet could make £5.8 billion alone.

That is small change compared to the total for Ryanair and WizzAir though, with the research suggesting they could make £12.6 billion between them.

Some airlines, such as Spirit Airlines, are heavily reliant on charging travellers for extras, with additional charges making up 46.4% of the Florida-based airline’s total revenue.

“Airlines using this a la carte approach usually find more than 50% of passengers select higher-priced bundled options. When this activity is matched by an ever-growing pool of airlines, the result is billions more ancillary revenue,” concluded the report.

Earlier this year, IdeaWorksCompany and CarTrawler revealed how much ancillary revenue 66 airlines made in 2016.

United Airlines were found to have made £4.77 billion from additional revenues, with this figure expected to increase massively.

Airlines have looked to introduce more ways to ensure passengers spend more in recent years, such as selling day passes for airport lounges and a small fee for faster boarding.

If you’re thinking of travelling next year, make sure you organise travel insurance to cover yourself against any eventuality.

Date Created: 04 December 2017

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