Collectively, 4.3 billion commercial airline passengers in 2018 paid airlines worldwide around $28.1 billion to check – or, in a few cases, to carry on – their bags.
4.3 billion commercial airline passengers in 2018 paid airlines worldwide around $28.1 billion to check – or, in a few cases, to carry on – their bags.
Now, even though most carriers have jumped into the ancillary revenue game with both feet, there’s still plenty of room for ancillary revenue growth. That $92.9 billion of total ancillary revenue is just 10% of the estimated $854 billion spent globally on air travel in 2018. Finding ways to charge more for traditional services that used to be included in the basic fare priceMaking more bags subject to bag fees.
That represents a huge area of potential revenue growth for airlines whose basic services - seats for flights from Point A to Point B - have relatively little room for price increases growth because of intense fare price competition. Luckily, for consumers, airlines don't appear to be interested in making more bags subject to their bag check fee schedules. Rather, they currently use waivers of bag check fees as a benefit offered to some of their best customers like frequent fliers and those who use the airlines' co-branded credit cards. Airlines typically earn from the bank that markets their co-branded credit cards another penny or two for every dollar charged to those cards.
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