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The billion-dollar business behind your airline luggage fees

January 26, 2026

The Times Sunday – London

These extras, which include things like seat selection, priority boarding and baggage, are what airlines call “ancillary revenue” and they are making carriers a packet.

In November the American aviation consultancy IdeaWorksCompany forecast that airlines globally generated $157 billion (£116 billion) in ancillary revenue in 2025, up from $148.4 billion the year before and $67.4 billion in 2016, thanks to an increase in the number of passengers and the rise in economy fares among the premium carriers that pay for the seat only.

United Airlines’ 2025 Results Soar Past Expectations

January 20, 2026

Barron’s

As for President Donald Trump’s proposed 10% cap on credit card rates, from which airlines generate billions in revenue from co-branded credit cards, they may not materialize.

Jay Sorensen, founder and CEO of IdeaWorksCompany, a consulting firm that analyzes ancillary revenue such as airlines’ loyalty marketing, doesn’t expect the proposed 10% cap will be able to charge past the thicket of lobbyists in Congress.

A 10% rate cap would be “cataclysmic for co-branding,” Sorensen told Barron’s. “It would place the economics of the bank issuers in disarray, and this would have a profound impact on their ability to fund the airline programs.”

A New Use for Airline Miles: Gliding Past the Velvet Rope

January 5, 2026

New York Times

Loyalty has turned out to be lucrative. Revenue from these programs provides a major source of profit for airlines, which sell their miles to banks. In 2024, American and Delta each received about $7 billion from frequent-flier programs, according to an analysis of financial filings by Jay Sorensen, who runs IdeaWorksCompany, an airline consulting firm.

With the stakes so high, airlines, hotels, online travel agencies and banks are all vying to differentiate themselves. “Travelers are being wooed on all fronts,” Mr. Sorensen said in a statement. “The competition is creating better rewards, more lounges and new travel booking options, but it’s also reshaping the balance of power in the travel industry.”

Global air travel costs ‘cut by 40% in nine years’ as ancillary revenues soar

November 19, 2025

Travel Weekly

Optional add-ons offered to sustain lower base fares have helped cut the total cost of air travel by roughly 40% since 2016, according to new research.

Ancillary revenues from passengers paying extra for items such as baggage, seat selection and onboard food are projected to generate $157 billion this year, up from $148.4 billion in 2024 and “dramatically higher” than $67.4 billion almost a decade ago.

IdeaWorksCompany, a global consultancy on airline ancillary revenue, attributed the figure more than doubling due to steady passenger growth and the widespread adoption of basic economy fares by carriers around the world.

When bargain airfare is no bargain: airline fees hit all-time high

September 28, 2025

Boston Globe

In 2024, airlines collected a record $148 billion in fees. Commonly referred to as ancillary fees, these revenue-generating extra charges come from fees for seat selection, priority boarding, food and drink, luggage, or dedicated overhead space, and even money airlines make from selling frequent flyer miles. The previous record for ancillary fees was $109.5 billion in 2019.

“You get what you pay for, is an ancient pearl of wisdom for both consumers and airline managers,” said report author Jay Sorensen, president of IdeaWorksCompany. “The a la carte choices presented by the ancillary revenue movement have encouraged travelers to upgrade to more comfort and convenience.”

Air Canada trails global peers in fee revenue, but Aeroplan poised to boost it

September 20, 2025

Toronto Star

All those checked bags, seating upgrades and onboard snacks you pay for on Air Canada flights are starting to add up for the company. While the country’s biggest airline lags behind other global carriers in revenue from passenger fees, it is poised to catch up after its recent purchase of the Aeroplan rewards program, a new report says. Air Canada took in US$1.45 billion in so-called ancillary revenue last year, or about US$28.54 per passenger, according to the report Tuesday from airline consulting firm IdeaWorksCompany.

Airlines set ancillary records, lean into new revenue streams

September 10, 2025

PohcusWire

Total global ancillary revenue for airlines broke records in 2024, surpassing $148 billion, and carriers continue to grow through the addition of these revenue streams.

IdeaWorksCompany published these findings in its 2025 edition of the “Yearbook of Ancillary Revenue,” which revealed traditional airlines were “under pressure with more traffic but lower fares” in 2024. However, these airlines also saw a 5.3% passenger ancillary revenue increase that offset losses from discounted fares.

The report analyzed ancillary revenue activity and results from 61 airlines in 2024. When compared with the 58 airlines included in its 2023 carrier results, IdeaWorksCompany cited a 2.5% increase in total ancillary revenue per passenger and a 3.8% decrease in all other revenue.

Airlines Want a Piece of Every Purchase You Make

September 6, 2025

New York Times

The airlines share little publicly about their loyalty programs, but American and Delta each received about $7 billion from frequent-flier programs last year and United about $6 billion, according to an analysis of financial filings by Jay Sorensen, who runs IdeaWorksCompany, a consulting firm that works for airlines and other aviation businesses.

Those programs are supported in part by the millions of people who use airline credit cards and then earn airline points for spending. The banks that issue those cards buy those points from the airlines in bulk, typically spending many billions of dollars every year.

“What really changed the dynamics of these programs is the arrival of credit cards,” Mr. Sorensen said.

Moneybags

September 1, 2025

Low Fare and Regional Airlines – LARA

Passengers are often confused by airlines’ baggage policies, but many simply game the system. Alan Dron investigates what low-fare airlines can do to protect a valuable ancillary revenue stream and considers an alternative that may well introduce another.

“We’ve identified a desperate need for solutions for the baggage problem at gates, so have developed a program that addresses that,” said Jay Sorensen, President of IdeaWorksCompany.

This is an excerpt from the August/September 2025 issue of the magazine.

Ten Life Lessons From The Airline Business

July 21, 2025

Forbes Magazine

It is said that the only thing to know about running an airline is this: “Fly the airplanes on time and answer the goddamn telephone.” Truthfully, there is probably a bit more to it.

Last week, longtime airline executive and consultant Jay Sorensen issued a report entitled “Fly High, Land Right: Ten Life Lessons for Success in Business.”

Sorensen went to work for Midwest Express in 1984. He left in 1996 as director of marketing, and became an airline consultant. He has consulted for about 30 carriers, big and small. Here are his tips.

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