Ancillary Revenues

Airline Auctions Arrive

Airline Auctions

Airline Auctions

Airlines are known to leave no stone unturned in seeking additional revenue streams (generally referred to as ancillary revenue), especially those with little to no cost. Airline auctions are a new tool being used by airlines to sell upgraded seats to the highest bidder in the days prior to a flight departure. As compared to simply giving such upgrades away to passengers based upon frequent flier status, airline auctions provide an immediate boost to revenues and profits.

Airline Auctions Explained

Premium airline seats often come with extremely high fares, which often results in such seats going unsold. As a result, airlines seek ways to fill these seats, including by offering upgrades to passengers who have purchased economy or other non-premium seats. Airline auctions involve the sale of upgraded seats, which may include first class, business class and premium coach seats. In addition, some airlines have even offered passengers the ability to purchase a seat next to an empty seat, offering what could be termed “neighbor-free” seating. [···]

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EarlyBird Check-In Program Generates $220m

Southwest EarlyBird Check-In Program

Southwest Airlines

Southwest Airlines introduced its EarlyBird Check-In program in 2009. Since Southwest does not offer assigned seating and only offers economy seating, the only seating preferences relate to where a passenger may sit- window, middle, or row seat in a row near the front, middle, or back of the plane. As described by Southwest, “As an EarlyBird Check-In Customer, you will have a better opportunity to select your preferred seat and have earlier access to overhead bin storage for your carryon luggage.” Starting at a fee of $10.00 per flight, the fee for the program was increased to $12.50 in 2013. Although this may seem like a relatively small cost, this fee results in significant revenues for Southwest. We’ll review the terms of the EarlyBird Check-In program and then summarize the 2014 annual data for this program.

EarlyBird Check-In Program Overview

Based upon the FAQ from the Southwest website, below is an overview of the EarlyBird Check-In program. [···]

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Airline Ancillary Revenues: Up, Up, and Away!

airlines ancillary revenues

bag fees and more

Frequent air travelers are well aware that airlines have increased the types of fees charged above and beyond the base air fare. Such fees may not only include fees related to checked and carry-on baggage, but also seat selection fees, food and beverage fees, Wi-Fi, etc. Referred to as airline ancillary revenues, IdeaWorksCompany defines airlines ancillary revenues as follows: Revenue beyond the sale of tickets that is generated by direct sales to passengers, or indirectly as part of the travel experience. Airline ancillary revenues have exploded since 2007 and have become increasingly important to the overall profitability of the commercial airline industry. [···]

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