LoadFactor is the industry insider resource for exclusive video content on airline marketing, passenger experience, payments, loyalty and ancillary revenue trends and innovations.
Airline Ancillary Revenue Defined
Airline ancillary revenue, formerly known as non-transportation revenue (NTR) is revenue derived from non-ticket sources, such as frequent flier currency sales, a la carte sub products, cross-sell commission-based products (partners), advertising and sponsorships, and to a certain extent, punitive transaction fees such as reservation change fees or frequent flier facility fees.
Airline Loyalty Defined
Loyalty programs are marketing schemes designed to encourage the customer to make frequent purchases and increase the average amount spent each time. Airline loyalty programs or frequent flier programs (FFPs) accomplish this by offering points, credits or miles in exchange for paid travel. FFP currency has become an attractive virtual currency since its early utilization in 1979 with Texas International Airlines and shortly after with American’s AAdvantage program in 1981. Consequently airlines have been able to leverage the perceived value of their currency by selling it to partners such as co-brand credit card banks generating the majority of ancillary revenue in the global airline industry to date.