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Qantas slips off radar, from number one to number 28

December 11, 2018 Aviation, Headline News No Comments Email Email

Qantas rides high in many airline comparison charts but there’s one aspect of its operations that has slid from number one in the world to number 28, in just six years.

The measure is added extras, or “ancillary revenue” – the money that airlines rake in for services other than just flying passengers from one point to another.

Qantas no longer rates a place in the top 20 world carriers on that measure, ancillary revenue per passenger. Some passengers, who prefer their charges to be made upfront, may think that’s a good thing.

In 2012, Qantas made more money per passenger from added extras “ancillaries” than any other airline in the world.

The latest IdeaWorks listing, recently released, shows that airlines in the United States and Europe led the world’s carriers in collecting a total of USD 92.9 billion in the 2017-18 year from extra charges to check bags, upgrade seats and change reservations, among other services that once were included in the price of a flight.

The “ancillary revenue” projected for 2018 is expected to be 13% higher than the USD 82.2 billion collected by carriers last year, according to IdeaWorks.

As recently as 2014, Qantas came third in the world in the amount of money it earned in ancillary revenue per passenger, largely from its frequent flyer program,.

In the latest list, the compilers said Jetstar earned USD 26.92 per passenger in ancillary revenue and Qantas earned USD 38.91. The Qantas total derived from “primarily partner activities associated with the frequent flyer program”.

Qantas now ranks 28th in terms of ancillary revenue as a percentage of total revenue in the latest list, and Jetstar ranks 12th, as below.

  1. Spirit (46.6%)
  2. VivaAeroBus
  3. Frontier
  4. Wizz Air
  5. Allegiant
  6. Volotea
  7. WOW air
  8. Ryanair
  9. Volaris
  11. HK Express
  12. Jetstar (23.2%)
  13. Pegasus
  14. Scoot
  15. easyJet
  16. AirAsia X
  17. AirAsia Group
  18. Alaska Air Group
  19. Norwegian
  20. JetBlue
  21. United
  22. Southwest (FF)
  23. Delta
  24. Cebu Pacific
  25. American
  26. Aer Lingus *
  27. Air Arabia
  28. Qantas Airways (FF) (12.1%)
  29. flydubai
  30. Sun Country
  31. Vietjet
  32. Nok Air
  33. Air Canada
  34. GOL
  35. WestJet
  36. Thomas Cook Group Airline
  37. Hawaiian
  38. Azul (FF)
  39. Aeromexico
  40. Pobeda

An asterisk indicates an estimate based on past performance. The initials (FF) in brackets, after three carriers including Qantas, indicate that over 80% of the carrier’s ancillary revenue is produced by its frequent flyer program.

Qantas is one of only three in the top 40 whose prime ancillary source is listed by IdeaWorks as “frequent flyer program”.

In the same report a few years ago, the compilers observed: “Qantas is the most successful in terms of loyalty marketing results with approximately 80% of its ancillary revenue associated with its Qantas Loyalty business unit. The carrier de-emphasises a la carte activities by continuing to bundle elements such as baggage, food and beverages in its basic fares.”

That situation is unlikely to have changed much. It shows that Qantas chief executive Alan Joyce was astute in choosing to hang on to the frequent flyer program when times were tough.

You can download the full report here.

Written by  Peter Needham

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