Ryanair sees reserved seating driving ancillaries growth

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Ryanair is citing its move to introduce reserved seating as one of the key factors behind its ancillary revenues increasing a fifth in the third quarter.

The Irish budget carrier's ancillary revenues rose nearly a quarter to around €13 ($18) per passenger during the three months ending December 2012, outstripping a 3% growth in passengers over the same period.

"The big ones that jumped out well above passenger traffic were travel insurance, which we have changed our proposition on, and that has done very well. And more particularly, the reserved seating has been...well ahead of our expectations," explained the carrier's deputy chief executive Michael Cawley at a results press conference in London today.

The Irish carrier began testing reserved seating - under which passengers can pay to book a specific seat - in May. By November it announced plans to roll the concept out across its network.

"Our apprehension was that it would cannobilise priority boarding. It didn't, we think largely because a lot of those reserved seats are not available for passengers with children because they are emergency seats," says Cawley. "Lots of our passengers who bought priority boarding were doing so in order to sit together and they continue do so. It's been as strong as ever and reserved seating has been a completely new stream.

"We have not in any way exploited the limits of it," he adds, pointing to the limited marketing of the service it did ahead of the launch because of its apprehensions over priority boarding. "We are now much more confident on why people are buying it. So we will promote it quite strongly this summer. We think there a further year of growth in it. [But] over the longer term, it's safe to say ancillaries will only grow in line with passenger growth."