The European low-cost carrier newsletter


Friday, September 18, 2009

Low-cost carriers: 'Hidden charges' and Ancillary revenue to boost activities

"How did low-cost carriers managed to turn extra charges to an incredible cash machine, avoiding a tragic fall due to their poor financial results? Credit card booking, food and beverages on board, priority boarding, seat choice, insurance... almost everything with low-cost carriers is 'ancillary revenue'. These revenues are not ‘bonuses' for carriers, but essential to offset the low prices of tickets. Jay Sorensen, President of IdeaWorks declared: 'The sickly patient known as the world's airline industry suffered through 2008 and only survived due to dramatic schedule cutbacks, the slow reversal of fuel prices and an intravenous injection of ancillary revenue.' Now, the time is running out to find new best ideas to make passengers consume the most."