{"id":98575,"date":"2015-09-19T11:00:13","date_gmt":"2015-09-19T09:00:13","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=98575"},"modified":"2015-09-18T18:05:39","modified_gmt":"2015-09-18T16:05:39","slug":"extra-flight-charges-saa-vs-the-world","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/trending\/98575\/extra-flight-charges-saa-vs-the-world\/","title":{"rendered":"Extra flight charges: SAA vs the world"},"content":{"rendered":"

Loss-making South African Airways could be missing out on an additional revenue stream which global airlines are milking for as much as 39% of their total revenue.<\/p>\n

This is according to data from\u00a0IdeaWorks and CarTrawler.com, looking at how much international airlines make from ancillary revenue tied to flights.<\/p>\n

Ancillary revenue is revenue sourced beyond the sale of tickets, which is generated from direct sales to passengers, or indirectly, as part of the overall travel experience.<\/p>\n

This includes frequent flier activities, a la carte features, commission-based products, and advertising sold by the airline.<\/p>\n

Compared to global airlines, SAA has some of the lowest ancillary revenue in the world\u00a0– in total and on a per-passenger basis – indicating that the struggling airline may be missing a beat in finding a way to draw in much-needed additional revenue.<\/p>\n

In the case of SAA, reported ancillary revenue for the group is sourced primarily from its Voyager frequent flier programme – which drew in over R480 million during the company’s 2014 financial year.<\/p>\n

According to the report, the Voyager programme has 2.5 million members, which equates to a split revenue of R192 per member.<\/p>\n

Across the group’s 9.33 million passengers, however, this works out to be around R51.50 ($3.81*) per person- ranked 53rd out of 63 airlines which report this revenue stream.<\/p>\n

*\u00a0As of September 2015, $4.82 at the time of the report.<\/small><\/p>\n

The top airline, Jet2.com, pulls in $56.28 (R757) per passenger.<\/p>\n

Top 10 airlines, ancillary revenue per passenger<\/strong><\/p>\n

\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
#<\/th>\nAirline<\/th>\nAncillary revenue per passenger<\/th>\n<\/tr>\n
1<\/td>\nJet2.com<\/td>\n$56.28<\/td>\n<\/tr>\n
2<\/td>\nSpirit<\/td>\n$52.35<\/td>\n<\/tr>\n
3<\/td>\nQantas Airways<\/td>\n$50.16<\/td>\n<\/tr>\n
4<\/td>\nAllegiant<\/td>\n$45.16<\/td>\n<\/tr>\n
5<\/td>\nAirAsia<\/td>\n$43.22<\/td>\n<\/tr>\n
6<\/td>\nUnited<\/td>\n$42.46<\/td>\n<\/tr>\n
7<\/td>\nVirgin Atlantic<\/td>\n$39.60<\/td>\n<\/tr>\n
8<\/td>\nKorean Air<\/td>\n$39.28<\/td>\n<\/tr>\n
9<\/td>\nWizz Air<\/td>\n$34.87<\/td>\n<\/tr>\n
10<\/td>\nAlaska Air<\/td>\n$31.46<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
53<\/td>\n\u00a0South African Airways<\/td>\n$4.82<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n<\/div>\n

Jet2’s ranking is largely due to its holiday package options, as well as other services which it charges for – such as advanced seating, in-flight sales, car hire, and travel insurance.<\/p>\n

The airline which makes the most from ancillary sales is United Airlines, which drew over $5.86 billion in ancillary revenue in 2014.<\/p>\n

Top 10 airlines, ancillary revenue\u00a0<\/strong><\/p>\n

\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
#<\/th>\nAirline<\/th>\nAncillary revenue<\/th>\n<\/tr>\n
1<\/td>\nUnited<\/td>\n$5 861 000 000<\/td>\n<\/tr>\n
2<\/td>\nAmerican Airways<\/td>\n$4 651 000 000<\/td>\n<\/tr>\n
3<\/td>\nDelta Airlines<\/td>\n$3 212 909 000<\/td>\n<\/tr>\n
4<\/td>\nAir France<\/td>\n$2 046 292 309<\/td>\n<\/tr>\n
5<\/td>\nRyanair<\/td>\n$1 906 616 921<\/td>\n<\/tr>\n
6<\/td>\nSouthwest<\/td>\n$1 885 000 000<\/td>\n<\/tr>\n
7<\/td>\nLufthansa<\/td>\n$1 632 765 608<\/td>\n<\/tr>\n
8<\/td>\neasyJet<\/td>\n$1 457 215 349<\/td>\n<\/tr>\n
9<\/td>\nQantas Airways<\/td>\n$1 387 084 868<\/td>\n<\/tr>\n
10<\/td>\nKorean Air<\/td>\n$919 239 157<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
55<\/td>\nSouth African Airways<\/td>\n$44 976 053<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n<\/div>\n

Expressed as a percentage of total revenue, Spirit Airlines has the biggest take through\u00a0ancillary sales – 38.7% of the group’s total revenue.<\/p>\n

South African Airways only makes up 1.7% of total revenue in the same way.<\/p>\n

Top 10 airlines, ancillary revenue as % of total revenue<\/strong><\/p>\n

\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
#<\/th>\nAirline<\/th>\n% of total revenue<\/th>\n<\/tr>\n
1<\/td>\nSpirit<\/td>\n38.7%<\/td>\n<\/tr>\n
2<\/td>\nWizz Air<\/td>\n33.7%<\/td>\n<\/tr>\n
3<\/td>\nAllegiant<\/td>\n32.4%<\/td>\n<\/tr>\n
4<\/td>\nJet2.com<\/td>\n28.5%<\/td>\n<\/tr>\n
5<\/td>\nRyanair<\/td>\n24.6%<\/td>\n<\/tr>\n
6<\/td>\nTigerair<\/td>\n21.8%<\/td>\n<\/tr>\n
7<\/td>\nJetstar<\/td>\n20.8%<\/td>\n<\/tr>\n
8<\/td>\nFlybe<\/td>\n20.7%<\/td>\n<\/tr>\n
9<\/td>\nAirAsia<\/td>\n20.0%<\/td>\n<\/tr>\n
10<\/td>\nVolaris<\/td>\n19.5%<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
54<\/td>\nSouth African Airways<\/td>\n1.7%<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n<\/div>\n

SAA a loss-making mess<\/h3>\n

In the first five months of the current financial year, SAA has made\u00a0a loss – following years of troubled revenues amid declining fare prices and rising costs.<\/p>\n

According to CFO Wolf Meyer, competition in 2014 also hit the group, with forecast costs looking to increase by 76% in 2015 to R561 million.<\/p>\n

None of South Africa’s other airlines disclose\u00a0ancillary revenue, according to the CarTrawler report. SAA’s finances also\u00a0include those of low-cost airline, Mango.<\/p>\n

The country has seen a number of new low-cost airlines enter the market, looking to grab some of the airfare pie.<\/p>\n

This includes the latest entrant Fly Blue Crane, which launched in September. Tanzania-based low-cost airline Fastjet also has a presence in the country, along with\u00a0FlySafair – which launched in 2014.<\/p>\n

SAA is expected to reveal its financial results for the year ended 31 March 2015 in early October.<\/p>\n

More on flying in SA<\/h3>\n

Get ready for new airline baggage rules in SA<\/strong><\/a><\/p>\n

Airlines seek to tap into customer data<\/strong><\/a><\/p>\n

Kulula.com says no to in-flight Wi-Fi<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Loss-making SAA could be missing out on an additional revenue streams which global airlines are milking for as much as 39% of their total revenue.<\/p>\n","protected":false},"author":10,"featured_media":60317,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[10493,26,1675],"class_list":["post-98575","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-trending","tag-airlines","tag-headline","tag-saa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/98575","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=98575"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/98575\/revisions"}],"predecessor-version":[{"id":98599,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/98575\/revisions\/98599"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/60317"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=98575"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=98575"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=98575"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}