Low-cost carrier Allegiant Air wants to grow its ancillary revenue further, and believes it can catch up with Spirit Airlines in this revenue segment.
Allegiant made $40.52 in ancillary revenue per passenger in 2013, compared with Spirit’s $53.84. “This is a gap we can close,” says Allegiant president Andrew Levy at the Boyd Group International Aviation Forecast Summit.
Levy points out that both Spirit and Allegiant charge for similar items, such as seat assignments, carry-on bags, call centre bookings and airport check-ins.
Spirit, however, charges more for such amenities, according to Levy’s presentation at the summit. For example, Spirit charges a $10 fee for airport check-ins while Allegiant charges $5.
Spirit itself has said it wants to grow ancillary revenue more, and says it foresees being able to push ancillary revenue to become half of its total revenues. Ancillary revenues accounted for just over 40% of Spirit’s total revenues in 2013.
Spirit chief executive Ben Baldanza says the airline plans to price optional products and services in a more “dynamic” manner, such as charging more for bags during peak travel season.