After writing recently about the perils of viewing ancillary revenue in isolation from the overall PRASM/PRASK picture, I was impressed to see the following from Steven Frischling’s Flying with Fish blog.
All told, at the end of the 2010 2nd Quarter, major U.S. airlines collected US$892,800,000 in baggage fees, for an increase of 33.3% from the 2009 2nd Quarter.
As Delta Air Lines continues to build its financial strength in fees collected, the airlines ranks the lowest among major network carriers in terms of Passenger Revenue Per Mile (RPM), earning 12.6¢ per miles where as United Airlines is earning 13.4¢ per revenue mile.
…and who earns the most per Passenger Revenue Per Miles? Southwest Airlines at 14.5¢. The low cost carrier, with the least amount of passenger fees, once again leads the U.S mainline airlines in its earning potential.
I’m a huge fan of ancillary revenue and the yet to be maximized upside of this category, but it is just one element in the overall revenue story.
On an only slightly related topic, one thing I liked when I was coming back through Chicago O’Hare yesterday was how United were pushing their economy plus package. It got me thinking about about some conversations I’ve had with industry players recently regarding when in the customer experience it is most effective to sell unbundled services. I’ve probably had this conversation four times in the past week with various people, but most of the time we were talking shopping versus servicing; we never discussed what United are doing in the photo below – have a girl standing around the air-side kiosks with a suitcase containing a built-in screen extolling the virtues of trading up to Economy Plus (complete with a Starbucks promotional tie-in). Looks like the guy in the photo took the bait.