What’s Happening with Airline Ancillary Fees?

33 Pages·2010·6.07 MB·English

WHAT TRAVEL PAYMENT IS ALL ABOUT.
What’s Happening with Airline
AAnncciillllaarryy FFeeeess??
November 25th 2010
Aaron Kelling, EVP Strategic Partnerships for AirPlus International
Ancillary Fees -2010 P. 1
Agenda
1. Ancillary Fees - Status Quo
2. Solutions Discussed
3. Your Role
4. Q & A
AAIIRRPPLLUUSS..WWHHAATT TTRRAAVVEELL PPAAYYMMEENNTT IISS AALLLL AABBOOUUTT.. P. 2
Agenda
1. Ancillary Fees - Status Quo
2. Solutions Discussed
3. Your Role
4. Q & A
AAIIRRPPLLUUSS..WWHHAATT TTRRAAVVEELL PPAAYYMMEENNTT IISS AALLLL AABBOOUUTT.. P. 3
Ancillary Fees include:
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Checked bags
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Onboard internet access
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In-flight meals & beverages
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Preferred seating
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Upgrades
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Standby fees
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Overhead bin space
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Pillows & blankets
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Seat assignment fees
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Onboard entertainment
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The Cost - 1€ 8.4B* ($22.6B USD) collected in 2010 an d rising
It is difficult to quantify the cost of ancillary fees:
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Prices change frequently
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New ancillary products to emerge
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Airlines have different products: (examples)
British Airways charges for advance seat assignments
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SAS charges for all onboard services including water or coffee
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Most European airlines have started charging for a second checked bag
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Spirit recently introduced fees to use onboard overhead bin space
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All major US airlines charge for pillows & blankets onboard
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*Source Amadeus White Paper Study
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The Cost - 1€ 8.4B ($22.6B USD) collected in 2010 and rising
It is difficult to quantify the cost of ancillary fees:
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Corporations are trying to understand the impact of these fees
Some studies show that ancillary fees represents only 1% of air costs*,
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some up to 30%**
Latest Concur study shows the cost at 2.3% of air cost
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IATA predicts $58B in ancillary revenue for 2010
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Many fees are waived for elite flyers
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What is considered an ancillary fee?
Are ticket related fees, e.g., change fees, even considered ancillary?
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Are holiday surcharges for peak travel days considered an ancillary fee?
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* TRX (as reported in The Beat) **NBTA 2010 U.S. Business Travel Buyers' Cost Forecast.
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Top 10 airlines – total ancillary revenue: 2009
* Source -Centre for Asia Pacific Aviation –October 19th2010
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Top 10 airlines – ancillary revenue as % of total revenue: 2009 *
* Source -Centre for Asia Pacific Aviation –October 19th2010
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Fees, Fees, Everywhere!
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