Mogul's right, it refers to the other fees and rev
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Posted On: 04/08/2017 9:27:17 PM
Mogul's right, it refers to the other fees and revenue they make besides tickets:
Actually, Spirit Airlines offers a $9 fare club for an annual fee of $59.95 as another revenue stream.
IMO, its a way to sell low cost tickets, by reducing the % of revenue coming from ticket sales by increasing the number of revenue streams, allows you to lower the profit margins per ticket to create a market advantage to get more passengers. Fun fact, amusement park ticket sales only account for about 50% of revenue. The rest comes from other revenue streams like food and merchandise. This would give them room to lower ticket sales or not increase ticket prices.
IMO
Quote:
In the airline industry, ancillary revenue is revenue from non-ticket sources, such as baggage fees and on-board food and services, and has become an important financial component for low-cost carriers (LCCs) in Europe, North America and other global regions.
Actually, Spirit Airlines offers a $9 fare club for an annual fee of $59.95 as another revenue stream.
IMO, its a way to sell low cost tickets, by reducing the % of revenue coming from ticket sales by increasing the number of revenue streams, allows you to lower the profit margins per ticket to create a market advantage to get more passengers. Fun fact, amusement park ticket sales only account for about 50% of revenue. The rest comes from other revenue streams like food and merchandise. This would give them room to lower ticket sales or not increase ticket prices.
IMO
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