Airlines are raking in cash for optional extras like check-in bags – making £62 billion this year alone
Revenue from seat selection, baggage fees and food and drink sales has soared 264 per cent since 2010
AIRLINES will make £62 billion by charging for added extras this year.
Revenue from optional extras like seat selection, baggage fees and food and drink sales has mushroomed in the last seven years.
It has grown by 264 per cent since 2010, when the profits from hidden charges was £17 billion.
Even since last year the figures have grown by 22 per cent – up from £50.7 billion.
IdeaWorksCompany, who did the research, showed that passengers were paying an average of £15 per flight.
As well as charges for things like seat selection, airline ancillary revenue also covers commissions gained from hotel bookings, the sale of frequent flyer miles to partners, and the provision of a la carte services.
Experts say airlines are using the hidden charges to hedge against the price of jet fuel.
The report reads: “Ancillary revenue has proven to be a highly useful tool to fix airline finances.
“It delivers profit-boosting results during times of severe economic distress, and works effectively to lift profits even higher when airlines are achieving investment-grade margins.”
Some airlines make far more from hidden extras than others – providing up to half of total revenue.
For instance, Ryanair made almost £1.5 billion last year this way – more than any other airline outside the US and the sixth highest amount in the world.
27 per cent of the budget airline’s income came from optional extras.
Jet2 has the highest hidden charges outside of the US – with each passenger paying an average of £31.50 each.
United Airlines profited most globally from these hidden extras, followed Delta and American.
Most top ten airlines earn the majority of their ancillary revenue through frequent flyer programs.
These billion-dollar amounts are generated by the sale of miles or points to banks that issue a carrier’s co-branded credit card.