The core activity of passenger airlines is to transport passengers between two cities. Airlines generate most of their revenue by selling passenger tickets and this revenue source is called Ticket Revenue. Airlines in the past included most of their services in the ticket price and ticket revenue was then the only revenue source. This situation, however, changed with the introduction of low cost carriers (LCC).
LCC started to charge lower prices for their tickets and separated fees for extra services such as onboard food, luggage fees and special seats. This type of revenue is often called Ancillary Revenue and represents a very important revenue contribution, especially for LCCs. For example, the Mexican LCC VivaAerobus generated 45% of ancillary revenue in 2019 (VivaAerobus, 2020).
The core activity of passenger airlines is to transport passengers between two cities. Airlines generate most of their revenue by selling passenger tickets and this revenue source is called Ticket Revenue. Airlines in the past included most of their services in the ticket price and ticket revenue was then the only revenue source. This situation, however, changed with the introduction of low cost carriers (LCC).
LCC started to charge lower prices for their tickets and separated fees for extra services such as onboard food, luggage fees and special seats. This type of revenue is often called Ancillary Revenue and represents a very important revenue contribution, especially for LCCs. For example, the Mexican LCC VivaAerobus generated 45% of ancillary revenue in 2019 (VivaAerobus, 2020).
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