Oct. 29, 2012 at 9:00 AM ET
If the sting of paying to board early, check a bag or enjoy a few extra inches of legroom has gotten a bit sharper lately, you’re not alone. According to a new report, the world’s airlines will earn an estimated $36.1 billion in ancillary revenues this year.
Released on Monday, the Amadeus Worldwide Estimate of Ancillary Revenues calculates the total as an 11.3-percent increase from the $32.5 billion the industry collected in 2011. (If it’s any consolation, the rate of increase slowed substantially from the 44-percent jump between 2010 and 2011.)
“It’s encouraging to see ancillary revenue growing at over 11 percent this year which demonstrates the significant commercial potential for airlines,” said Holger Taubmann, senior vice president, distribution for Amadeus, in a statement.
Needless to say, most travelers will probably view the news a bit less cheerfully.
“When the airlines were losing money, some travelers may have felt sorry for them,” said George Hobica of AirfareWatchdog.com. “Now that the airlines are making profits, there’s going to be less sympathy.”
Not surprisingly, perhaps, the most heavily fee-dependent airlines, such as Spirit, AirAsia and easyJet, posted some of the biggest gains. Called “Ancillary Revenue Champs” in the report, these carriers are expected to earn $5.6 billion in extra revenue this year, a 30.5-percent increase over 2011. By comparison, the “Low Cost Carriers” category — airlines such as JetBlue, Southwest and GOL — will earn $5.4 billion, up 12.8 percent over the year before.
However, even those numbers come up short compared to those in the “U.S. Major Carriers” category. According to the report, just six airlines — Alaska, American, Delta, Hawaiian, United and US Airways — will earn $12.4 billion this year. That represents a 0.8-percent drop from 2011, yet still accounts for almost 35 percent of the global total.
In fact, the number would likely have been higher, notes the report, except that Delta now excludes revenues from some aviation businesses from its reporting.
It’s also important to note that the figures in the report are not synonymous with passengers’ out-of-pocket expenses. They also include revenues the airlines earn by “selling miles” to credit-card companies and other corporate partners that want to link to their loyalty plans.For major U.S. airlines, those revenues are believed to exceed $6 billion or one-half of the group’s total.
That may be small consolation to passengers who still find themselves facing new ways to pay. In June, American, Delta and US Airways began charging a premium for select window and aisle seats. In July, Virgin America began charging $20 for seats in the first few rows of the main cabin. The seats don’t come with any extra legroom, although early boarding does improve your odds of finding space in the overhead bins.
Are more fees in the offing? According to Jay Sorensen, president of IdeaWorks, which produced the report, probably so, especially as systems are put in place to allow online travel agencies and other third-party websites to display them. (Amadeus is a leading GDS, or Global Distribution System, which provides the technology that currently allows those sites to display airfares.)
“The next surge of activity will occur when the sale of optional extras becomes more prevalent in the automated booking systems used by travel agents,” said Sorensen. “Look for airlines to become better retailers through all distribution channels during the next three years.”
Hobica, on the other hand, holds out hope that the airlines’ current run of profitability will relieve the pressure to implement new fees or raise existing ones. (Earlier this month, IATA, the international airline trade association, forecast that the global industry will earn $4.1 billion this year, up $1.1 billion from its last forecast in June.)
“As long as they’re making money they won’t be as motivated to be greedy,” he told NBC News. “But if fuel prices go up, all bets are off.”
Rob Lovitt is a longtime travel writer who still believes the journey is as important as the destination. Follow him at Twitter.